MEDICAL MARIJUANA DEAL 'POLITICALLY MOTIVATED'

A B.C. Firm Says The Contract Was Made To Put Federal Money Into A
Depressed Area

The award of a $5.75 million contract to grow medical marijuana was
politically motivated and designed to pour money into an area with a
high level of unemployment, according to a complaint filed against
the federal government by a British Columbia company.

The contract to produce research-grade cannabis for Health Canada was
awarded last December to Prairie Plant Systems, making the
Saskatoon-based company the first legally sanctioned marijuana
company in the country. The pot it produces will be used for clinical
trials into use in treating illness.

But a competing firm says the government added stringent financial
requirements to the tendering process to ensure it went to Prairie
Plant Systems.

Brian Taylor, CEO of the B.C.- based Cannabis Research Institute, has
filed a complaint with the Canadian International Trade Tribunal,
which rules on disputes over the tendering of federal government
contracts. In it, he claims that the award was "politically
motivated" by a concern for the high levels of unemployment in Flin
Flon, Man., where Prairie Plant Systems intends to locate its
marijuana farm.

The complaint alleges that the federal government "worked with this
company, before and during the bid process, to ensure that PPs was
able to comply with the mandatory financial requirements."

Taylor's company was one of the firms knocked out of the bidding
process after the government rewrote the contract specifications to
require a $1-million performance bond.

The complaint to the CITT contends that the bond requirement
discriminated against smaller companies unable to secure large
financing and is illegal under the NAFTA provisions that concern
government tendering.

Taylor, who is also leader of B.C.'s provincial Marijuana party, says
the bond requirement was added after Health Minister Allan Rock began
receiving unsolicited packages of pot from home-growers who had seen
media reports about the government's search for a supplier.

The CITT rejected Taylor's complaint last month, mostly over
technical and jurisdictional issues, but he has refiled his complaint
and asked the tribunal to reconsider. He has not yet received a
response. Neither Health Canada nor Public Works and Services Canada,
which tendered the contract, would comment on the case before the
CITT.