On October 17, 2018, the Cannabis Act opened the opportunity for individuals or companies to apply for a Licence to sell cannabis online. Federal legislation allows the Online Sale of Cannabis for Medical Purposes. As of September 2020, there were over 377,000 registered Medical clients with federally licenced sellers in Canada.
A licence for the Online Sale of Cannabis for Medical Purposes allows the Licenced Holder to sell cannabis products directly to registered clients for medical purposes. Online Sale Licenced Holders may sell cannabis online, in written order, or over the telephone.
Application requirements for the Sale of Cannabis for Medical Purposes vary depending on whether they opt to take possession of cannabis at their facility. Operations involving the possession of cannabis will face more stringent requirements concerning security and storage. These additional requirements will entail guidelines detailing the cleaning and sanitation procedures for security storage areas, monitoring the storage area, and building security measures.
Authorized Sellers must obtain cannabis products from approved federally Licenced Processors. Registered clients must be authorized to use cannabis by a licenced practitioner. Cannabis products must be delivered to the clients via courier or securely through the mail.
A licence for the Sale of Cannabis for Medical Purposes would also provide authorization to perform other related activities, including:
Intra-Industry Sale to Other
Federal Licenced Holders
Health Canada is responsible for licence approvals, suspensions, restrictions, renewals, amendments, and rejections.
As of 2020, the cost for medical cannabis was $7.05 per gram in Ontario instead of the average wholesale price of $4.20 per gram (OCS), representing a significant opportunity for licence holders to benefit from increased margins. The Licenced Holder may purchase tested and pre-packaged cannabis goods for resale to the medical market. This process will significantly reduce overhead costs and allow the operator to focus on e-commerce development.
“The total cannabis market in Canada is forecasted to generate $7.17 billion in revenue in 2019, with medical cannabis sales expected to account for up to $1.79 billion” (Deloitte). Contrary to initial hypotheses, the legalization of recreational cannabis has increased the number of medical cannabis users. Individuals are now more likely to engage in talks with their health care providers regarding the benefits of medical cannabis and available insurance coverage.
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