Pot activist hopes to be first licensed producer after changes in law

TORONTO -- Marijuana activist Sam Mellace hopes to be the first licensed medical marijuana producer in Canada after spending the past 10 years running his "pretty much" legal operation.

The Abbotsford, B.C., resident has been producing marijuana since 2002 for himself and three other medical users in accordance with current laws.

But starting April 1, 2014, authorized users will not be able to grow their own pot -- the only way they will be able to get their product will be from licensed producers.

Mellace intends to submit his application to Health Canada on Monday, hoping to get the first licence for his company New Age Medical Solutions, but he's up against stiff competition.

For the past 13 years Prairie Plant Systems Inc. has been the only company that has been producing legal marijuana and marijuana seeds on contract to Health Canada. The company submitted its application earlier this month.

"Up to this point we've been the only ones working with the rules," says the company's CEO Brent Zettl.

He says this has led to "unfair competition" from amateur operations because they don't have any requirements about quality control.

"They can do whatever they want," he says, but now everyone will be on the same page.

Mellace says his system is advanced as well.

At Mellace's compound, with security cameras and dogs, he says he profiles the plants and checks them regularly.

"Our main objective is to help as many people as we can and give them the best product possible," he says.

But he admits he hasn't always operated strictly to the letter of the law.

Mellace, who uses medically prescribed marijuana due to chronic pain from a bad car accident about 10 years ago, doesn't like to smoke marijuana. Instead, he turns the crops he grows into a kind of butter in a process skirting the law. He uses the butter in cookies and even spaghetti sauce. He has also made a cream from marijuana for arthritis.

"We follow, pretty much, the rule of law," he says but admits to occasionally processing more than the legally allowed amount when making his butter.

"I would say it's a grey area," he says.

Jeannine Ritchot, Health Canada's director of medical marijuana regulatory reform, says that the new rules have been put into place to answer concerns from municipalities, as well as fire and law enforcement officials about public health and public safety.

"The purpose of that is to make sure that consumers are having access to quality-controlled marijuana," she says.

Currently the ministry's marijuana is supplied to authorized users by mail and she says the government has seen this as the safest way to provide it.

"There's been virtually no episodes of diversion as a result of this system," she says.

The new rules, announced in June, create a system of supply and distribution by licensed producers regulated by the government ministry. These producers will be subject to security requirements, inspections and good production practices.

The new system will run alongside the old one until April 1, 2014. Under the old system, people prescribed with medical marijuana were able to grow their own plants and buy seeds and marijuana from Health Canada. Starting in April of next year, authorized people will only be able to get medical marijuana from private licensed producers.

Health Canada has said in a statement that it will be increasing their price -- currently set at $5 per gram -- to match the price of "the first established licensed producer."

"Our interest is creating a viable competitive market place," Ritchot said.

Zettl believes this price change will reflect the initial cost of shipping.

"If this becomes an issue they're going to be factoring this into the consideration price wise," he says.

According to the most recent statistics released Dec. 31 by Health Canada, 28,115 people are authorized to possess dried marijuana in Canada. Of those, 18,063 have licenses to produce their own marijuana for personal use while 5,283 indicated they will get marijuana or seeds from Health Canada.

That means that once the new rules come into full effect, nearly 30,000 people will have to get their pot through the mail from a licensed producer.

Zettl welcomes the idea of having competition "on a level playing field."

For Mellace the race is on.