Canadian biosciences company Sunshine Earth Labs announced Thursday it has been licensed to produce and sell cocaine, reflecting the federal health agency's bid to improve safety conditions for the country's addicts.

The licensing deal comes after a radical policy shift to address an opioid overdose crisis that has killed thousands, by decriminalizing small amounts of cocaine, heroin and other hard drugs.

Ottawa granted a criminal code exemption in January to British Columbia for the three-year pilot project, with the aim of removing the stigma associated with drug use that keeps people from seeking help.

Advocates have also been pushing for safer supplies of drugs to be made available to addicts who face a risk of dying from toxic drug poisoning linked to illicit street drugs.

Sunshine Earth Labs said in a statement it received permission from Health Canada to "legally possess, produce, sell and distribute coca leaf and cocaine," as well as morphine, MDMA (ecstasy) and heroin.

Its announcement comes on the heels of a similar licensing arrangement offered in February to Adastra Labs, which had until now focused on crafting cannabis extracts.

Adastra's license also allows it to produce and sell psilocybin and psilocin -- hallucinogens more commonly known as magic mushrooms that produce effects similar to LSD.

"We will evaluate how the commercialization of this substance fits in with our business model at Adastra in an effort to position ourselves to support the demand for a safe supply of cocaine," chief executive Michael Forbes said.

British Columbia is only the second jurisdiction in North America to decriminalize hard drugs after the US state of Oregon did so in November 2020.

The Canadian province is the epicenter of a crisis that has seen more than 10,000 overdose deaths since it declared a public health emergency in 2016. That represents about six people dying each day from toxic drug poisoning out of a population of five million, topping Covid-19 deaths at the onset of the pandemic.

Nationwide the number of fatalities has surpassed 30,000.