REFILE-Fate of Canada's "marijuana mine" in limbo

(Refiles to correct spelling to Systems from System in corporate name in paragraph 2. Also corrects spelling of chief executive's name to Zettl from Zetti throughout)

VANCOUVER, British Columbia, July 22 (Reuters) - An abandoned mine in northern Canada may lose its role as the country's only government-sanctioned marijuana farm.

Production at the mine -- deep under the tundra at Flin Flon, Manitoba -- had to be moved because the facility was not big enough and a deal to expand it had not been worked out, operator Prairie Plant Systems said on Wednesday.

The mine had been producing legal marijuana for nearly a decade since Canada began allowing patients legal access to marijuana for medical reasons such as controlling pain.

The switch to another location prompted media reports that the operation had gone up in smoke, but Prairie Plant's Chief Executive Brent Zettl said that was premature.

Zettl still hopes to strike a deal with mine owner HudBay Minerals Inc (HBM.TO) to expand marijuana operations within the mine, and said a final decision will not be made until the end of the month.

"It may be or it may not be (closed forever)," Zettl said.

The company, which raises plants for pharmaceutical uses, has other operations in the Trout Lake mine. Its contract to supply pot to Health Canada for sale to authorized medical users runs for another 2-1/2 years.

Some marijuana activists have panned the quality of pot from the Flin Flon facility, saying many medical users simply grow their own or buy from sources other than the government.

Authorized medical marijuana users are allowed to legally grow their own pot.

While medical marijuana's use is controversial, some research has show has shown the drug to be effective in alleviating symptoms of debilitating diseases such as cancer and multiple sclerosis. (Reporting by Allan Dowd, editing by Peter Galloway)