Cannabis still cannot be sold for non-medical use
Under new rules, people can now legally grow and take the drug for a range of medical purposes, or appoint someone to grow it for them.
The government has awarded a $3.5m (£1.6m) contract to a company to farm marjiuana in a disused copper mine. The first harvest is expected later this year.
Patients' groups have largely welcomed the legislation, which follows a year of permits being handed out on a case-by-case basis to terminally ill people.
Wider range
Under the new terms, those suffering from some chronic conditions - including epilepsy and degenerative muscle and bone illnesses - will also be able to use marijuana.
Commercial production and sale of marijuana, and non-medical use, will remain illegal.
However the Canadian Supreme Court has agreed to consider a case arguing that the criminalisation of marijuana is unconstitutional because the drug poses no significant health threat.
In May, the Ottawa Citizen newspaper reported that a national survey of Canadians found that almost half were in favour of the legalisation of marijuana.
Consent
Would-be medical users must have a prognosis of death within one year or symptoms associated with specific serious medical conditions.
They will also need their doctor and two experts to sign the necessary consent forms.
The Canadian Medical Association opposes the new law, saying that there has not been enough scientific research for doctors properly prescribe dosage.
They also say the effects of marijuana combined with patients' more traditional medicines are unknown, and warn that many people may ignore the rules altogether.
The Marijuana Party of Canada - a political party dedicated to legalising the drug - says that if the country took the path of the Netherlands and decriminalised marijuana, then there would be no need for the complex legislation.
'A reasonable system'
However, across the border in the United States, advocates of the use of marijuana for medical purposes have welcomed the new system.
"We're kind of envious of Canadians having the luxury of complaining about the minutiae of the program," said Chuck Thomas from the Washington-based Marijuana Policy Project.
"It looks like a reasonable system, " he added.
Eight US states have taken steps towards legalising the medical use of marijuana.
However, the Supreme Court in Washington ruled earlier this year that federal law would not recognise state medical exemptions, leaving people open to prosecution.