Health Canada charging huge markup on pot

Health Canada charging huge markup on pot

Documents show price is 15 times cost, but still lower than street
Apr 15, 2007 04:22 PM
Dean Beeby
Canadian Press
OTTAWA – The federal government charges patients 15 times more for certified medical marijuana than it pays to buy the weed in bulk from its official supplier, newly released documents show.

Critics say it's unconscionable to charge that high a markup to some of the country's sickest citizens, who have little income and are often cut off from their medical marijuana supply when they can't pay their government dope bills.

Records obtained under the Access to Information Act show that Health Canada pays $328.75 for each kilogram of bulk medical marijuana produced by Prairie Plant Systems Inc.

The company currently has a $10.3-million contract with Health Canada, which expires at the end of September, to grow standardized medical marijuana in an abandoned mine shaft in Flin Flon, Man.

Health Canada, in turn, sells the marijuana to a small group of authorized users for $150 – plus GST – for each 30-gram bag of ground-up flowering tops, with a strength of up to 14 per cent THC, the main active ingredient. That works out to $5,000 for each kilogram, or a markup of more than 1,500 per cent.

"It's impossible for a person on disability," said Ron Lawrence, 38, a burn victim in Windsor, Ont., who needs medical marijuana to control severe pain. "The sickest people are the ones that need it the most . . . they're the ones who don't work."

Adds Scott McCluskey, 48, in Westbank, B.C., who suffers spinal-cord pain that is eased by marijuana: "They're selling it for criminal street prices. . . . I don't think anybody, especially seriously ill people . . . should have to pay this type of money for medicine."

Health Canada has become a reluctant marijuana supplier, forced into the role by a series of court decisions that have accepted scientific research indicating cannabis can relieve pain when other medications fail. The courts have also said patients should not be forced into the black market to purchase their medicine.

Currently, 1,742 patients are authorized by Health Canada to possess dried marijuana as a medication. Of these, 1,040 are licensed to grow their own, and another 167 people are licensed to grow marijuana for the exclusive use of licensed patients.

But patients can also order marijuana through Health Canada's official supplier, Prairie Plant Systems, which typically delivers the product by Purolater courier.

Currently, 149 patients are officially in arrears – almost a third of the 514 patients who order government-certified dope – collectively owing Health Canada $143,611 in outstanding payments. Many have been cut off from their supplies, though Health Canada was not able to indicate the number.

"At a time when medical cannabis users all too often have to choose between buying groceries and their medicine, it is unconscionable that Health Canada . . . should be marking up this product 1,500 per cent," said Philippe Lucas of Victoria-based Canadians for Safe Access, which promotes ready access to medical marijuana.

A spokesman for the department, Jason Bouzanis, said the quoted price of $328.75 a kilogram for bulk marijuana does not include other Health Canada costs.

"The price for individuals authorized to possess marijuana for medical purposes is based on the actual cost of production and an estimate of costs associated with the distribution of the product," he said, "These costs are subject to change."

Contract records show Health Canada also pays the supplier a packaging fee of $9.06 for each 30-gram package, to cover labour and materials, as well as courier fees that are dependent on shipping volumes.

Although patients currently can grow it themselves or have someone else grow it for them, Health Canada plans to phase out these production licences sometime after 2007. That would force patients to order from Prairie Plant Systems, or take their chances with street dealers or so-called compassion clubs, which are technically illegal.

Street prices for marijuana are about $10 a gram for small quantities, or about twice Health Canada's price, though bulk street purchases with few middlemen can match or better the government price. Compassion clubs charge as low as $5 a gram, the same price as government dope.

Because medical marijuana is not a recognized drug, with its own drug identification number, insurance companies and government drug programs do not reimburse patients for costs, as they do for other pain medication.

Many patients say they are unhappy with the quality of the Prairie Plant System product.

"It's garbage," said Tom MacMullen, 43, of Prospect Bay, N.S., who uses marijuana for leg and back pain. "It's just so awful-tasting."

MacMullen has twice been cut off from his government supply, and currently owes $517 in arrears. With a disability pension of $653 a month and two children, he has few resources to buy dope and now relies on the charity of friends.

Bouzanis said Health Canada is tightening its rules beginning May 1, so that those who are 30 days or more in arrears can receive one more shipment before they are cut off. Previously, patients were given a 180-day grace period.

Meanwhile, the Victoria-based Vancouver Island Compassion Society is planning a constitutional challenge to the federal medical cannabis program, set to be heard in the British Columbia Supreme Court May 9-18.