Health Canada is clearing the path for more formalized research into the medical uses of marijuana, says analyst Rahul Sarugaser of Paradigm Capital, a move that can only benefit Canada’s cannabis companies looking to take first-mover advantage in the worldwide market for medical cannabis.
Last week, Health Canada announced that it plans to maintain its current medical marijuana rules known as the Access to Cannabis for Medical Purposes Regulations (ACMPR) once legalized recreational marijuana becomes a reality next month. The government says that once enacted the new Cannabis Act will allow for further and, according to many in the industry and medical community, much needed research into marijuana’s potential medical applications.
“Measures under the Cannabis Act aim to facilitate research with the goal of improving our knowledge of the risks and benefits of cannabis,” reads the statement, which says that legalization will “provide for a new research license and permit research activities under cultivation and processing licenses.”
The Canadian Medical Association has argued that once legalization for recreational use becomes a reality, there should be little onus on the medical community to prescribe marijuana, adding that there is a dearth of research on its effectiveness and a lack of knowledge surrounding dosing, leading to many physicians stating that they’re uncomfortable with prescribing pot.
“The medical profession, as a whole, has really struggled with the whole concept of medical cannabis. There’s definitely some physicians who feel comfortable in that area but most don’t,” said Dr. Jeff Blackmer, vice-president of medical professionalism for the Canadian Medical Association to CBC News.
Yet Health Canada’s reaffirmation of ACMPR is likely to create strong economic incentive for companies to pursue clinical programs related to medical cannabis, says Sarugaser.
“Companies that pursue robust evidence for the clinical use of cannabis will distinguish themselves not only in clinical and medical applications of cannabis, but also in forthcoming adult-use/recreational cannabis markets,” says Sarugaser in a research update to clients on Monday. “With evidence from gold-standard clinical trials comes physician adoption and with physician adoption comes Pharma buy-in: the gateway to a >$2 trillion global Pharma market.”
“We continue to see companies such as Canopy Growth, GW Pharmaceuticals, Tilray Inc., CannTrust Holdings and even $200 million Tetra BioPharma Inc. who have ongoing clinical trials establishing themselves as leaders, not just in Canada, but on the cannabis industry’s burgeoning global stage,” says Sarugaser.