Freely Enterprising The System

"There are kickbacks. Let's be blunt -- that's what they are."
"Regardless of whether the physician thinks they're independent, they're no longer independent."
Bryn Williams-Jones, bioethics professor University of Montreal 

"There's rent and there's staffing and payroll and insurance, and all the other things that go into running the business."
"There needs to be a way to have a sustainable business ... and it doesn't appear the governments are providing adequate funding."
Barry Fishman, CEO, Vivo Canada, chain clinics

"There is still a doctor who has to make an assessment of the patient."
"He has to demonstrate you have an actual need for the medicine."
Jordan Sinclair, Vice-President, Canopy Growth cannabis firm

Many Canadians still seem to want a health professional’s help getting marijuana treatment, and the medical cannabis system remains popular. Getty Images

Access to marijuana has been liberalized freely. Last October cannabis legalization took effect. Users of recreational cannabis may now access their drug of preference, or preferential strain of that drug, to their heart's content. Admittedly, there are still logistics to be settled, but when everything is finally in order and entrepreneurs have been duly certified by all the provinces and territories enabling them to open their storefronts with sufficient merchandise to satisfy their clients' needs no constraints to access will exist.

Yet, despite the freedom to simply acquire their recreational cannabis when and where they feel like it, many consumers seem to want to have their need for marijuana validated by a medical certificate. And it is in that area where licensed producers of medical cannabis pay out millions to cannabis clinics countrywide in 'appreciation' when 'patients' register their marijuana prescriptions with the companies. Call that 'referral fees' or call the practise 'education grants'; in plain language they're kickbacks.

The practise of expressing such appreciation surfaced several years back as a sometime thing with a whiff of controversy, one that has since become the norm, a routine part of the business of entrepreneurial pot, twinning commerce and medicine with cannabis. "LP revenue provides the highest margin of all the company's revenue streams", according to a document filed with regulators by Sunniva Inc., which owns both Natural Health Services clinics and a pot producer.

A routine has been established that a producer pays a clinic fifteen to twenty percent of the cost of each dose of cannabis a patient buys over time when someone files their prescription with them. Health-policy and medical ethics experts claim these payments compromise health professionals' focus of placing a patient's interests first, the system in place compelling the health professional to recommend to the patient a specific company he is connected with in his capacity as clinical adviser.

As far as the operators are concerned, payments represent enabling funding of intensive counselling offered to patients. Without those payments funding the counselling services it would fall to the patients to pay for them. Merely having contracts with multiple producers shouldn't be construed as encouraging favouritism toward anyone, it is insisted, all of whom pay back a percentage of business conducted in an interlinked service to clients.

The growing facility of MedReleaf in Markham, Ont.. Nathan Denette/CP

Perhaps it can be best construed as serving clients who feel the need to receive marijuana 'authorizations' post-medical assessment. And the best interests of the clients are served in a seamless transaction beginning with the medical assessment leading to the prescription and the finalization of guiding the client toward a provider. To that end, these specialty clinics assess patients, issue authorizations for marijuana, and assist the patient to access the goods through registering their prescriptions with a certain producer who just happens to be one of those the facility contracts with.

If this pricks anyone's ethical conscience, it's just the way the industry has developed its protocol. In 2015 the then-CEO of a major British Columbia-based cannabis company complained about the morality of doctors and clinics demanding referral fees claiming the practise "taints the whole industry", and going so far as to withdraw from a trade group, in protest. That company is now under a different leadership.

Executives of other companies, however, feel the payments, now standard practise, have a practical purpose; to fund the care clinics provide where appointments can last up to an hour's duration. Vivo Cannabis mentions in one corporate filing that it receives "educational grants" from producers, stressing the while that patient educators are not knowledgeable about contracts with the companies, hence proffer objective recommendations.

According to Mr. Fishman of Vivo Cannabis, while clinics do get income from provincial fees paid to doctors, the most significant revenue relates to producer payments. And those payments can become substantial financial supports for the clinics. Of the $1.2 million in revenue brought in by the Canada House chain of cannabis clinics in a three-month period, a mere $100,000 represented profit not linked to producer fees.

Medical-patient referral payments represented roughly 50 percent of the $3.5 million in sales and marketing costs in another three-month period for pot producer MedReleaf, according to a recent report from parent company Aurora Cannabis which also owns the Canvas Rx chain of clinics and where another of its documents shows revenues jumping by $1.8 million in fiscal 2018 attributed to a surge in producer fees.

"You have this clear conflict of interest in place: the more you prescribe, the more you get", pointed out Marc-Andre Gagnon, a health-policy professor at Carleton University. "In principle, this is simply unacceptable."

For some clinics payments from licensed producers represent the bulk of their income.  Getty Images

Proceed With Caution...!

"Cannabis is illegal in most jurisdictions outside of Canada. The personal information of cannabis users is therefore very sensitive."
"Some countries may deny entry to individuals if they know they have purchased cannabis, even lawfully."
"Private organizations are required by law to develop policies and practices to meet their responsibilities under the [law]."
Daniel Therrien Privacy Commissioner, Canada

AP Photo/Richard Vogel

Doesn't matter one whit that a number of U.S. states have legalized the possession and use of cannabis. Federally, marijuana in all its manifestations is considered an outlawed drug and federal law brooks no excuses, holding anyone associated with possession of pot to be criminally liable to prosecution. Or, in the case of Canadians routinely expecting they can enter the U.S. as they once did  casually -- for business or pleasure prior to the October legalization of cannabis in Canada -- being stopped at the border if record-checking, or verbal admissions or searches turn up proof of 'drug criminality'.

Suddenly, regular cannabis users are denied entry from Canada into the U.S. Nothing casual about it, either; that denial can result in a life-time ban. As happened just recently to a Canadian investor intent on travelling to Las Vegas to a cannabis conference and to tour a new cannabis facility while there. His frank admission of his destination and the purpose of it was more than enough to earn him a lifetime entry ban, confirmed for his edification through consultation with an immigration lawyer.

Reasonably enough feeling that since California had legalized cannabis his trip there would be without complications. He might have been aware that 64% of Americans favour legalization, that ten states, plus Washington D.C., the very seat of U.S. government, had legalized recreational marijuana use, while 33 additional states legalized medical marijuana. But that Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington have all legalized recreational pot cuts no ice with the U.S. federal government.

Pot sellers and buyers have a need to fully understand their privacy rights and obligations. The first thing Privacy Commissioner Therrien suggests is paying with cash and not using plastic when buying products if the disposition of their personal information is a concern to users. And for many people being barred for life from entry to the United States is a serious concern. Although it seems nonsensical for a Canadian to travel to Vermont which has legalized cannabis, and to get stopped at the border and denied entry, it's federal law not state law that calls the shots for foreign entrants.

Blair Gable/Reuters

Personal information collection can be prevented by bypassing credit cards when buying pot from legal retain outlets; cash is obviously the way to go. An option that isn't available when buying online as a result of a paucity of provincial retail outlets. A privacy breach through Canada Post affecting an estimated 4,500 individuals last month was reported by the Ontario Cannabis Store. Someone used a Canada Post delivery tracking tool, extracting data of roughly two percent of customer orders.

And then there is the compulsion to respond when queried, either at the point of purchase or the point of entry to the United States. Privacy Commissioner Therrien advises purchasers to guard their privacy through the simple expedient of taking steps to not provide more personal information than practically required; stick to what is legally needed to verify qualifying age at point of purchase.

He would also like to remind pot shops that video surveillance should be used only if less privacy-intrusive measures can't be met. Should retailers decide to use video surveillance, then signage should be strategically posed and clearly visible to anyone in a client capacity before they enter the store for business purposes. Moreover, email addresses, not customer names for mailing lists or memberships should be collected by cannabis stores.

Canopy Growth

Tailoring New Marketing Opportunities

"I think this is a serious problem. There is definitely a need for doctors to learn how to appropriately prescribe medical marijuana."
"But that should not be paid for by the people who stand to profit from increased sales."
Dr. Joel Lexchin, health-policy expert, emergency doctor, Toronto

"Recreational cannabis is now more accessible and available than medical cannabis, increasing the risk that patients can and will self-medicate."
"Ultimately, we believe the best way to support patients looking to use this therapy is through education for health care practitioners."
Catherine Thomas, spokeswoman, Shoppers Drug Mart

"They are sales people."
"[Shoppers Drug Mart seminars are geared to teaching doctors appropriate application to patients and to] gain practical, hands-on tips [purportedly; while increasing sales potential is the obvious goal]."
Kimberly Elliot, former Shoppers Drug Mart sales representative

"It does seem like the same type of marketing used for pharmaceutical products."
"It is concerning."
Dr. Nav Persaud, family medicine professor, prescription-drug use, University of Toronto

Some doctors say they have no idea how to properly prescribe a product patients ingest through smoking. (Livia Manywounds/CBC)

With the legalization of cannabis that took place on October 17 in Canada, a vast proliferation of marketing strategies have arisen. The prospect of a population hungry for the use of marijuana and its byproducts has entrepreneurs, growers, sellers, advertisers glowing with the image of wealth dancing before their eyes. Provinces have discovered that despite a large number of grow operations functioning around the clock, product is in scarce supply; providers have been unable to meet demand.

And one of the first reasons for legalizing marijuana, to defeat the criminal element that markets cannabis among their other wares, appears to have misfired, with users becoming fed up with delays in deliveries and insufficient stock, returning to the security-of-supply their dealers represent. The pharmaceutical industry is elated at their own reading of the expanded opportunities open to them in this new, lucrative market. And it has renewed an old industry function of wooing doctors, favouring them with freebies in the persuasion of professional prescriptions.

The practice of company-sponsored seminars has been enlisted in a new campaign to persuade the medical profession that their suspicion and reluctance to prescribe cannabis is ill-informed, and the glowing promise of marijuana's potential to aid all that makes people ill must be promulgated and in the process persuasively enlist the cooperation of prescribing physicians. Specialist known as "key opinion leaders" (aka salespeople) have joined the fray.

Shoppers Drug Mart, a 1,300-store chain of pharmacies dominating the country's merchandising of prescription drugs, has planned a series of events around the country ostensibly to 'teach' prescribers all about cannabis. Shoppers is busy establishing itself as a major retailer of marijuana. They have arranged for "internationally renowned" speakers representing academic and health-care affiliates to speak convincingly to a practitioner-audience.

Canada has two separate cannabis markets— recreational and medical. (CBC)

No mention made, needless to say, that these speakers have ties compromising their medical neutrality, to marijuana-producing corporate interests and to private cannabis clinics. This is known as the corporatization of medicinal weed and is now extending itself to the sales potential -- clearly the sky is the limit -- of recreational weed the public is clamouring to obtain. Big Pharma once again, engaged in direct-to-physician marketing. Corrupt? Um, could be!

The sessions have a really neat title: "Medical cannabis: the future is now"; got that? Some of these sales seminars posing as medical information seminars have kicked off in Calgary and Vancouver, fronted by a "welcoming reception"; more are in the works for Toronto and Ottawa. The speakers, according to Shoppers, possess a wealth of vital knowledge, and are not engaged in touting cannabis brands whatever.

A Health Canada cannabis production licence in hand, Shoppers clearly plans to become the country's leading seller of marijuana, obtained through other companies producing it. The aim is to permit druggists to dispense medical cannabis by lobbying the federal government to agree with the proposal. Sales, without that dispensing capability by pharmacists employed by the chain are by telephone and online exclusively, with delivery made to customers' homes.

The speakers are paid a pharmaceutical industry average of $2,000 or more for each of their talks at seminars. As for the continuing medical education doctors are exposed to, there isn't much other than what Shoppers is offering. And doctors have been notoriously loathe to prescribe a drug they know little about, a drug in fact that little is known about, since there hasn't been very much research on its effects in the short- and long-term, much less details such as how much is too much, and which types are best prescribed...

There have been studies, however, finding evidence that such seminars encourage less-than-stellar prescribing, the seminars having the effect of persuading physicians in favour of the sponsor's products. Hello? What else is new! In fact drug companies are known to monitor prescription patterns before and following such talks and to respond to the results by dumping those doctors who haven't increased sales.

Speakers include a Vancouver internal medicine specialist, medical director of a private cannabis clinic, and on the advisory board of four cannabis companies. Another, a Toronto palliative-care physician paid earlier to give talks by three marijuana companies; another the director of pain research at a major Toronto hospital on the advisory boards of two cannabis corporation; a Winnipeg oncologist on the advisory board of another marijuana firm; and an American physician who heads his own cannabis consulting company.

"I think it's kind of unseemly", commented Dr. Tom Perry, clinical pharmacology expert at the  University of British Columbia. Quite an understatement.

Shoppers Drug Mart invited doctors to medical cannabis education sessions being held across Canada. (CBC)

The Best Produce Since Sliced Bread?

"Under the Cannabis Act (Bill C-45), companies are prohibited from mass advertising. The restrictions are in some cases more stringent than the rules for medical marijuana now."
"Endorsements and testimonials are prohibited for instance, as will [be] sponsorships involving people, events, entities, activities and facilities."
"Staging games, draws, lotteries and contests is also banned. That will mark a change for medical cannabis companies, which have sponsored everything from music festivals to fashion shows."
"Promotions that appeal to young people, depict people, characters or animals or associate cannabis with an emotion such as 'glamour, recreation, excitement, vitality, risk or daring' are out, too."
"The federal government has also proposed that cannabis be sold in single-colour packages dominated by health warnings and a THC symbol inside a red stop sign. Companies would be allowed a small logo or name."
Jacquie Miller, PostMedia

Global leaders in the marijuana industry are gathering in New Brunswick today to discuss how to market cannabis in a competitive legal marketplace. THE CANADIAN PRESS/Ron Ward

"Ottawa still doesn't know the true way of interpreting all the advertising, the PR, all those activities."
"We've had that conversation [endorsements and testimonials from celebrities to promote products] for weeks, and I refuse to get into that game. I want to sleep at night, and don't want to get into that [aggravation].
"First of all, I couldn't see the return on investment, they [celebrity endorsements] are very expensive. But more than that, I just didn't want to lose some of the stripes with Health Canada we've earned over the four years [the company has been in business supplying medical marijuana]."
Vic Neufeld, chief executive, Aphria Inc., cannabis grower, Leamington, Ontario

The federal government has finally revealed the date at which recreational cannabis will be legal in Canada, to be November 17. Marijuana companies already producing and distributing medical marijuana, an already legal enterprise, have been eagerly awaiting the announcement and have long since been gearing up their production and advertising techniques on line to make their advantage over competitors. And there are competitors galore, marijuana growers making profits they never before dreamed of, eager to continue their trend and enlarge on it.

The law will also permit cannabis users to grow up to four plants in their places of residence for their own use. The massive use of electricity and water in illegal grow-ups discovered in rental properties resulted in horrendous mould damage, insurance problems and unsaleable properties. In anticipation that rental properties and multi-unit residential buildings may now be turned into micro-grow-ops, the Canadian Federation of Apartment Associations has tried to persuade the government to ban growing cannabis in rentals.

An estimated four million Canadians of all ages, from 15 to those in the elderly category already use marijuana; teens acquiring their weed on the black market which legalization and regulation is meant to make inroads on, and the elderly looking for their supplies mostly for medical purposes through legal channels. With all marijuana becoming legal, growers are anticipating a huge upsurge in use through all age groups, viewing one of the most lucrative markets to come to fruition in memory, perhaps second only to alcohol, given tobacco's current low-use status.

Cannabis producers are champing at the bit, eager to see that their products have name recognition long before the great day of long-awaited legalization arrives. New recreational brands have been launched by a wide assortment of cannabis companies marketing to mainstream communities and doing their utmost to imbue the product with the status of supporting good health, wellness and enjoyment. Aphria Inc. has introduced its Solei brand, its website using mesmerizing soft-focus photographs of attractive people happily socializing, the slogan "Find your Light", prominent.

Health Canada failed to find the advertising in compliance with its very precise guidelines, including the legend "Whether for 'me' time or 'we' time, Solei is a natural way to unplug, embrace a slower pace or spark your sense of curiosity". The grow firm named varieties with moody emotional titles invoking visions of gracious ease, such as "Dream", "Unwind", "Soothe", "Balance", "Ignite", and "Gather". Let the good times advance, at long last! Attractive jars highlighting the new offerings make for a very impressive campaign. But is it legal?!

Evidently not, since it's all kind of disappeared after Health Canada nudged the company to recall its prohibitions on promoting narcotics write large in the Food and Drugs Act and the Narcotic Control Regulations. Now, should interested consumers wish to be involved in viewing encouragements extolling the virtues of the producer's incomparable product, they are advised to sign up on line for additional information. The company has no wish to injure its relationship with Health Canada so compliance was instant.

The Cannabis Act (Bill C-45) is quite specific in banning mass advertising. And nor are billboards, magazine, radio or prime-time television ads acceptable. "Informational" data is perfectly permissible, however, where "brand preference" promotions are allowed while sidestepping the irresistible of appealing to young people or make an association with "glamour, recreation, excitement, vitality, risk or daring". According to Health Canada, the focus should be on "factual, accurate information about a cannabis product, such as ingredients, THC levels and production methods".

MedReleaf was also contacted by Health Canada, given a cautionary reproof over its enthusiasm publicizing its San Rafael '71 brand "inspired by and designed to celebrate the spirit of classic cannabis culture". Health Canada had taken exception  to a photograph featured by MedReleaf showing marijuana. "Beer today, bong tomorrow", the company cheerfully promises, awaiting legalization, but in the meantime featuring a beer also named San Rafael '71, promoted as a pleasing counterpart relaxant for consumers while awaiting legal pot.

MedReleaf, Canada's Premier Cannabis Producer

Cannabis companies are being reminded they must look to responsible branding and marketing techniques should they wish to inform consumers about their products. Advocates for public health claim advertising is not particularly required to ensure that consumers will indulge in the legal market since those acquiring pot from dispensaries and dealers at the present time will invariably acquire their future purchases from government-approved legal stores as long as prices remain competitive with a variety of good quality products.