Before you start applying for a cannabis licence: Cultivation, processing and sale for medical purposes licence

This page provides the information you should consider before applying for a licence.

1.0 Determine your licence type

You should determine which cannabis licences you want to apply for before continuing. You should base your choice of licence on what you want to do with cannabis and how you want to sell cannabis. Your licence type will determine the information you'll have to submit during the licence application process.

There are certain combinations of licences that aren't permitted at the same site.

2.0 Familiarize yourself with the legislation

Familiarize yourself with the legislation listed below to see how they apply to your application.

• Cannabis Act and its regulations, including the Cannabis Regulations
• Excise Act, 2001
• Legislation in your province or territory
• Your municipality's or local government's laws, by-laws, policies

Important: Learn the definitions in subsection 2(1) of the Cannabis Act (the Act) and subsection 1(1) of the Cannabis Regulations (the Regulations). They'll be used in these pages as well as all other documents for cannabis licence holders.

Depending on your licence type, you will need to apply for a cannabis licence from the Canada Revenue Agency (CRA). You should submit the CRA licence application at the same time as Health Canada's cannabis licence application. For general questions, email cannabis@cra-arc.gc.ca.

These laws could also apply to you:

• Fertilizers Act
• Food and Drugs Act
• Pest Control Products Act
• Safe Food for Canadians Act
• Tobacco and Vaping Products Act
• Canada Consumer Product Safety Act

3.0 Self-identify as an Indigenous affiliated applicant

Indigenous affiliation can include:

• any person or persons of First Nation, Inuit or Métis descent
• any community, organization or business associated with a First Nation, Inuit or Métis government, organization or community

Self-identification is optional.

There are many scenarios where you could self-identify as Indigenous affiliated. For example:

• your responsible person or other key personnel is Indigenous (First Nation, Métis or Inuit)
• you have Indigenous investors
• you have an Indigenous employment strategy
• you have a partnership agreement with an Indigenous government outlining the involvement and direct benefit to the local community

Health Canada offers the Indigenous Navigator Service to guide Indigenous affiliated applicants through the licensing process, and once they've become a licence holder.

Indigenous affiliated applicants are able to ask for a 2-stage review that lets you start applying without a fully built site. In this case, Health Canada will review your licence application on 2 separate occasions. The first in-depth review happens before your site is fully built. When this review is finished, we'll send you a notification and a request to submit your site evidence package. You'll need to send your site evidence package after building your site. Your application will then undergo a second in-depth review.

There is a section to identify your application as Indigenous affiliated in the Cannabis Tracking and Licensing System (CTLS). Once this section is filled out in the CTLS, you'll be able to choose a review process. The Navigator service will reach out to you for an introductory teleconference after you've submitted your licence application.

If you'd like help before submitting your licence application, or if you have any questions about applying as an Indigenous affiliated applicant, email navigator-navigateur@hc-sc.gc.ca.

4.0 Know your fees

You'll have to pay a licence application-screening fee for each new application. The fees for micro-cultivation, nursery and micro-processing licences are lower than the fees for other types of licence.

You'll also have to pay security clearance application fees for each security clearance application. The fees are non-refundable and payment doesn't guarantee that a licence will be issued, or that the security clearances will be granted.

Once you become a licence holder, you'll also need to pay an annual regulatory fee for each site. A sale for medical purposes licence holder is exempt from the annual regulatory fee if they only sell cannabis to registered medical patients during that year.

5.0 Send notices to local authorities

Important: If you're only applying for a sale for medical purposes without possession of cannabis licence, this section doesn't apply to you.

Send a written notice to the senior official of the local authorities of the area of your proposed site.

• Local police force or the Royal Canadian Mounted Police detachment (RCMP)
• Local fire authority
• Local government (municipal government such as city, municipality)

Mayor, chief of police, chief of the fire department are examples of senior officials.

You may use the Notices to local authorities template (PDF format). The notice needs to contain:

• your applicant name
• the date on which you expect to submit your licence application
• the licences (class and subclass) you're applying for
• the cannabis activities that you expect to conduct under your licences
• your proposed site's address where you'll conduct the activities
• the address of each building within your site, if applicable
• the name of your responsible person or alternate responsible person
• the contact information, phone or email, of your responsible person or alternate responsible person

Collect the contact information from each of the local authorities:

• date when you sent the notice to the local authority
• name of the local authority
• senior official it will be sent to, including their:
  • name
  • title
  • phone number
  • email
  • address

  You'll need to submit a copy of these notices and additional information about each of the authorities you contacted in the licence application process.

  6.0 Prepare your site

  You need to show that your site is fully built and meets all the requirements when you submit your licence application. This includes submitting a site evidence package with your licence application showing you have an operational and functional site. This doesn't apply to Indigenous affiliated applicants requesting a 2-stage review.

  Use the Physical security measures guide for cannabis and the Good production practices guide for cannabis. They'll have examples of principles and practices that you can use to show compliance with those requirements for your fully built site.

  Important: Before preparing your site, you should check to see if your municipality's by-laws allow you to operate a site for doing cannabis-related activities. You're also responsible for complying with all the applicable laws:

  • provincial or territorial laws (such as environmental laws)
  • municipal or local government laws, by-laws, policies (such as zoning and building permits, electrical and fire safety, nuisance control for odour, noise and light)

  6.1 Costs

  6.1.1 Business supports

  If you are looking for financial support for your cannabis operations, you can use the Business Benefits Finder. It brings together business supports from all levels of government. By answering a few questions, you'll get a list of the supports that fit your needs. This can include:

  • advice
  • funding
  • tax credits
  • wage subsidies

  6.1.2 Start-up costs

  Start-up costs for a licensed site will vary depending on your specific business model and infrastructure. Health Canada gives you the cannabis licence requirements, but won't give any advice about your business model or infrastructure beyond this.

  You can get a licence for a modest-sized site and scale up later. You can do this by including only a portion of your building on your initial licence application, and add new operations areas, including grow areas, storage areas or new buildings to your licensed site later. Areas not included on your initial licence application don't have to meet Part 4: Physical security measures and Part 5: Good production practices of the Cannabis Regulations. However, you can only do activities with cannabis in areas that meet all applicable physical security and good production practices requirements.

  For example, your initial licence can have the outside walls of your building as your site perimeter, but there can be areas inside that don't meet all applicable physical security and good production practices requirements. You can also define a fence as your site perimeter, with buildings inside that aren't on your licence.

  When you'd like to scale up and use areas not included on your initial licence application, you'll have to make sure they meet the physical security and good production practices requirements. You may also need to change your site perimeter to include these new areas. The submission and approval requirements vary depending on the type of change. You'll need to notify Health Canada of some types of site plan changes or get approval for others.

  Micro-cultivation, nursery and micro-processing licence holders are also able to scale up their operations as long as the applicable limits aren't exceeded.

  6.2 Site details

  The following section describes the things you should consider when preparing your site details for your proposed site.

  A site is defined as an area that's used exclusively by the licence holder that consists of at least 1 building or 1 part of a building.

  Important: If you'll be conducting Health Canada-regulated cannabis activities in First Nations, Inuit or Métis communities, email navigator-navigateur@hc-sc.gc.ca.

  6.2.1 Perimeter of site

  You need to define the perimeter for your site. Only the licence holder can do activities on the site. If someone other than the licence holder uses any areas, rooms or buildings, they need to be outside of the proposed perimeter of your site.

  6.2.2 Licences are site specific

  If you're planning to do licensed activities at more than 1 site, submit a separate licence application for each site.

  6.2.3 Multiple licence holders at 1 location

  There isn't a limit to the number of licence holders on a single piece of land or in a building. More than 1 licence holder is allowed if each licence holder is within a separate site or defined site perimeter. If you have multiple licence holders at 1 location, you'll need to have a way to keep the activities separated between each site. For example, you'll need to:

  • have a unique civic or mailing address for each licensed site for keeping shipping, receiving and mail delivery separated
  • keep separate record-keeping documents

  If there are multiple licence holders at 1 location, Health Canada will assess the risks associated with the increased amount of cannabis at the location. This can happen during the application process or after licensing, based on your current or future proximity to other licence holders. If the co-location of licences increases risks, we may add or revise conditions on your licence, or require more physical security measures for the site.

  There may also be local municipal by-laws that limit the number of licensed sites within their jurisdiction.

  Figure 1 shows how 3 separate licence holders are located in 1 building. Each licence holder has their own site perimeter that does not overlap with the other licence holders.

  

  6.2.4 Personal or designated production of cannabis for medical purposes

  Commercial activities with cannabis and personal or designated production are allowed to take place at the same civic address, but in most cases personal or designated production can't take place within the commercial licence holder's site perimeter. This is because in most cases, the commercial licence holder (typically an organization) is not the same person as the holder of the personal or registration certificate or the designated person named in the registration certificate.

  Figure 2 shows how personal or designated production activities can be on the same land or building as the commercial licence holder, but only when these activities take place outside the commercial licence holder's site perimeter.

  

  In rare circumstances, if the licence holder (as an individual) is the same person as the holder of the personal registration certificate or is a designated person named in the registration certificate, it may be possible to do both activities within the licence holder's site perimeter. To do this, you need to:

  • clearly prove that you're complying with the Act and the Regulations
  • clearly distinguish between activities conducted under the licences and those done under your personal registration certificate. For example, you'll need to:
    • have a unique mailing address defined by the local government or municipality for the licensed site versus the address found on the registration certificate to keep shipping, receiving and mail delivery separated
    • ensure physical segregation of cannabis activities conducted under the licences and those done under your personal registration certificate
    • ensure there is no unauthorized movement of cannabis between the licence and the personal registration certificate
    • keep record keeping documents for the licence separate from any documentation associated with the personal registration certificate

    6.2.5 Dwelling (residence)

    You're allowed to have a dwelling (residence) on the same property as your site. In most cases, dwellings are located outside the site perimeter. If your dwelling (residence) is within your licensed site, you can only do cannabis related activities within your site perimeter. You can't have any cannabis related activities happening in your dwelling (residence), including sale.

    6.2.6 For cultivation licences with only outdoor grow areas

    You need to have at least 1 indoor area for doing sales activities with cannabis. This indoor area needs to be defined as 1 of 2 options:

    • Sales Area (with possession). You'll also be allowed to possess cannabis in the indoor area. Your indoor area needs to meet the applicable physical security measures and good production practices.
    • Sales Area (without possession). You won't be allowed to possess cannabis in the indoor area. Your indoor area doesn't need to meet the applicable physical security measures and good production practices. For example, this could include offices or washrooms.

    6.2.7 Storage areas and cannabis waste destruction

    Important: If you're applying for a sale for medical purposes without possession of cannabis licence, this section doesn't apply to you.

    6.2.7.1 Storage areas

    You should have enough storage areas to handle your intended activities and amount of cannabis that will be at the site (except grow areas). You'll need to have storage for:

    • viable cannabis seeds
    • any part of a cannabis plant, including the phytocannabinoids produced by, or found in the cannabis plant, processed or not (such as cannabis buds and leaves, and industrial hemp)
    • any substance or mixture of substances that contains or has on it any part of a cannabis plant (such as lotions containing cannabis)
    • any substance that is identical to any phytocannabinoids produced by, or found in a cannabis plant regardless of how you obtained the substance (such as THC oil and isolates made synthetically or through chemical extraction)

    You should consider the following factors when deciding how much storage space you'll need, for example:

    • the quantity of cannabis you'll be storing
    • the types of cannabis you'll be storing
    • how long cannabis will be stored at your site
    • whether you'll be storing cannabis waste overnight

    If you plan to only grow cannabis outdoors and not have a storage area, you'll need to plan for the cannabis to be transported immediately after it's harvested.

    The following items aren't considered cannabis and don't need to be stored in the storage area:

    • non-viable seeds
    • roots or any part of the root
    • mature stalks, without any leaf, flower, seed or branch
    • fibres derived from a mature stalk, without any leaf, flower, seed or branch

    Cannabis waste is still considered cannabis. This includes cannabis buds, leaves and branches collected from cultivating, propagating or harvesting activities. If you're not destroying cannabis waste on the same day as it's produced, you'll have to store it in a storage area overnight. You'll need to prevent it from contaminating other cannabis and ingredients stored in the same storage area at the same time. The Good production practices guide for cannabis shows how to meet good production practices requirements for storage.

    6.2.7.2 Cannabis waste destruction

    You're not required to use a specific disposal method for cannabis. Your destruction method will have to meet subsection 43(1) of the Regulations. This includes making sure people won't be exposed to cannabis smoke or vapour during destruction. An acceptable method can be shredding cannabis and mixing it with organic waste or soil before disposal. The destruction can be performed on site or at another location.

    You need to destroy cannabis in the presence of at least 2 qualified people. At least 1 witness needs to hold a security clearance, and the other needs to be an employee of the licence holder.

    Licence holders with limited employees at their site can meet the requirement by:

    • having someone with a cannabis security clearance from another licensed site witness the destruction
    • employing a person for the purposes of witnessing destruction only

    A qualified person can witness the on-site destruction of cannabis virtually, using a camera or another device. You'll need to retain a copy of the video and include it in the destruction records you're required to maintain under the Regulations.

    6.3 Good production practices

    This section provides some good production practices (the practices) for cultivation, processing, and sale for medical purposes with possession of cannabis licences. For more information on the practices' requirements, refer to the Good production practices guide for cannabis.

    Note: Good production practices requirements are not the same manufacturing standard as Good Manufacturing Practices under the Food and Drug Regulations. Good manufacturing practices are for manufacturing products of pharmaceutical grade quality and have different requirements.

    6.3.1 Construction material for your building

    There are no specific materials required for the walls of operations areas, including grow areas, and storage areas. You can use any material as long as you can show that they comply with the requirements, and it doesn't affect the quality of the cannabis. For example, the walls need to be smooth with no cracks or holes, and allow for proper cleaning.

    Construction materials may include painted or sealed drywall (such as gypsum board, gyprock, sheetrock), polyvinyl chloride (PVC) wall panels, and painted or sealed concrete.

    Untreated or exposed wood and drywall doesn't meet the requirements. You should seal materials such as wood, drywall, cement block and other porous materials. However, drywall sealed with paint can meet the requirements if it's smooth and washable.

    6.3.2 For processing licences: Incompatible activities

    If you're producing, packaging or labelling food products at your licensed site, you should make sure your licensed cannabis activities aren't in the same building. For example, if you're processing coffee beans at your site, you should do it in another building that doesn't have any cannabis activities.

    6.3.3 For processing licences: Potable water

    Any water, steam or ice that comes in contact with cannabis extracts, edibles and topicals, or any of its ingredients, needs to be potable water. If you can't use a potable water source, you have to make sure the water isn't a contamination risk. You can do this by testing water samples at a pre-determined frequency to show that they meet the potable water standards.

    6.4 Physical security

    This section provides some considerations related to the physical security requirements for cultivation, processing, and sale for medical purposes with possession of cannabis licences.

    6.4.1 Physical security requirements for licences

    The physical security requirements are different between some licences. You'll need to show how your site meets these requirements when you're submitting information later in the licence application process.

    Important: If you're applying for a micro-cultivation, nursery or micro-processing licence together with:

    • a sale for medical purposes with possession of cannabis licence, you need to meet the physical security requirements for both licences, and will have to submit your physical security information in your site evidence package to show this
    • a sale for medical purposes without possession of cannabis licence, you don't need to meet the extra physical security measures

    The following table shows the physical security requirements for the different licences.

    • Designed to prevent unauthorized access
    • Visual monitoring
    • Intrusion detection
    • Physical barrier to prevent unauthorized access
    • Access restricted to only people whose presence is required
    • Record of every person entering or exiting the storage area
    • Visual monitoring devices
    • Intrusion detection system
    • Physical barrier to prevent unauthorized access
    • Access restricted to only people whose presence is required
    • Visual monitoring devices
    • Intrusion detection system
    • Physical barrier to prevent unauthorized access
    • Access restricted to only people whose presence is required
    • Visual monitoring devices
    • Intrusion detection system

    7.0 Identify people

    There are specific people to identify in the CTLS during the application process. This may include the following roles:

    • Your key site personnel
      • Responsible person
      • Head of security
      • Master grower
      • Quality assurance person
      • Consent to communicate
      • Reporter
      • Responsible for finance
      • Associated individuals requiring a security clearance

      Refer to the linked sections for details on these roles and their responsibilities.

      Important: Health Canada can only issue a licence after granting all linked security clearances. People who need a security clearance should submit their application no more than 1 month before you submit your licence application. Identified people should avoid submitting their security application too far in advance, as it can become outdated and cause delays in processing.

      Important: For all licences for cultivation, processing and sale for medical purposes with possession of cannabis: A person who holds a security clearance needs to be present at the site when other people are in an operations area (including indoor and outdoor grow areas) or a storage area.

      7.1 Key site personnel

      The key site personnel required depends on the type of licence. The people identified for the specific roles need to be qualified to meet all the regulatory responsibilities. Each person needs to create an account in the CTLS and will need to apply for a security clearance, if they don't have one already. You can identify alternates, but they also need to have a CTLS account and apply for a security clearance, if they don't have one already.

      Note: Someone can hold, at the same time, 1 or more roles, for 1 or more licences, at 1 or more sites. In this case, the employee can use the same CTLS account and the same security clearance application.
      You'll need to make sure they can fulfill their duties by considering:

      • their hours of work at each site
      • if they're in a primary or an alternate role
      • if they're working at more than 1 site, the distance between sites
      • if they're working at more than 1 site, how they can do the work at all sites

      The responsibilities of the key site personnel include, but aren't limited to the following.

      7.1.1 Responsible person: Required for all licences

      • Has the authority to bind the licence holder
      • Is responsible for the activities conducted by the licence holder
      • Knows the sections of the Cannabis Act and the Cannabis Regulations that apply to the licence holder
      • Is the official point of contact with Health Canada and through the CTLS
      • Is responsible for submitting the licence application in the CTLS

      Applicant or licence holder can designate 1 qualified alternate.

      7.1.2 Head of security: Required for all licences

      • Ensures that the physical security measures comply with Part 4 of the Regulations
      • Is responsible for the organizational security plan

      Applicant or licence holder can designate 1 qualified alternate.

      7.1.3 Master grower: Required for micro-cultivation, nursery and standard cultivation licences

      • Is responsible for the cultivation, propagation and harvesting of cannabis
      • Knows the sections of the Act and the Regulations that apply to their activities

      Applicant or licence holder can designate 1 qualified alternate.

      7.1.4 Quality assurance person (QAP): Required for micro-processing and standard processing licences

      • Approves every lot or batch of cannabis before it's made available for sale
      • Has training, experience and technical knowledge about good production practices and cannabis product requirements for the activities conducted, applicable to the type of cannabis (for example, edible cannabis)
      • Investigates every complaint received about the quality of the cannabis and, if necessary, takes measures to mitigate any risk
      • Investigates immediately if they suspect cannabis or anything that will be used as an ingredient of being a risk of injury to human health
      • Investigates immediately if the applicable requirements of Part 5 of the Regulations or Part 6 of the Regulations aren't being met and takes measures to mitigate any risk
      • Approves the methods and procedures related to good production practices
      • Approves the Preventive control plan for activities conducted with cannabis extract or edible cannabis
      • May assign some quality assurance duties to a person who has the relevant knowledge, training and experience. However, the QAP remains responsible for the quality of the cannabis produced and for investigating complaints related to the quality of cannabis.

      Applicant or licence holder can designate up to 2 qualified alternates.

      Important: If you designate alternates, only 1 person can act in the role at any given time. For example, your first and second alternate can't be acting as QAP at the same time. Refer to the section 5.2 of the Good production practices guide for cannabis for more information about assigning quality assurance duties to another person.

      If the QAP works remotely or part-time, they may assign quality assurance duties to others on-site to address risks, such as a quality assurance team. However, the QAP remains responsible for the quality of the cannabis produced on site and investigating complaints.

      7.2 People with direct control

      People with direct control are in a position to directly influence, or have say in, the company's management and operations. Each person needs to create an account in the CTLS and will need to apply for a security clearance, if they don't have one already.

      Important: Anyone with direct control that doesn't fall into the categories below will need to be identified as an associated individual requiring a security clearance.

      You need to follow the information below to identify people with direct control when you prepare your application information.

      • If the applicant is an individual, identify:
        • the applicant or licence holder
        • the directors, officers or partners of:
          • the applicant or licence holder
          • the parent (owning) company, if applicable

          The people with direct control listed above will need to be added to:

          • the corporate profile, as applicable
          • the organization chart in your organizational security plan, as applicable

          7.3 Associated individuals

          There may be other people with direct control over the applicant or the licence holder. They'll need to be identified as associated individuals (people requiring security clearances). You may also choose to identify other associated individuals in the CTLS during the licence application process. These roles are optional. Each person added needs to create an account in the CTLS and may need to apply for a security clearance, if applicable.

          The responsibilities of the associated individuals are described below.

          7.3.1 Consent to communicate

          • People you allow to communicate with Health Canada about your application and licence. For example, it can be given to a lawyer, a consultant, or another person associated with the application other than the responsible person
          • They don't need a security clearance

          7.3.2 Reporter

          • They submit the Cannabis tracking system monthly reports for the licence holder in the CTLS
          • They need a security clearance

          7.3.3 Responsible for finance

          • They submit the statements of cannabis revenue for the licence holder in the CTLS
          • They need a security clearance

          7.3.4 Associated individuals requiring security clearance

          You'll need to identify additional people as associated individuals requiring security clearances. This includes anyone with direct control over the applicant or the licence holder, but who aren't:

          • your (or parent company) directors
          • your (or parent company) officers
          • your (or parent company) partners
          • your key site personnel

          For example, these people may be:

          • key investors with direct control over activities
          • people with significant influence or decision making ability on (can include, but isn't limited to managers or supervisors):
            • day-to-day operations
            • strategic business decisions
            • movement of significant amount of money or cannabis

            They need a security clearance.

            7.4 Key investors

            To determine if you need to report on your key investors, you need to determine if your equities securities are listed on a published market. A published market is a market inside or outside Canada where equity securities are traded, if the prices of those securities are regularly published. Most cannabis businesses don't have equity securities listed on a published market, and will need to report on their key investors.

            Not listed on a published market

            • If your equity security aren't listed on a published market, you'll need to submit a Key investor report with your licence application
            • As an applicant, you're not required to keep records on your key investors. However, you should get familiar with what your records need to include since this will help you complete your Key investor report during your application

            Listed on a published market

            • If your equity security are listed on a published market, you'll need to submit a Key investor attestation with your licence application

            Important: Key investors with direct control need to create an account in the CTLS and will need to apply for a security clearance, if they don't have one already.

            Refer to Cannabis key investors for more information on:

            • what is a key investor
            • record keeping
            • reporting

            8.0 For micro-cultivation, nursery and micro-processing licences: Limits

            Micro-cultivation, nursery and micro-processing licence holders have to consider limits on their authorized activities. This includes grow surface area limits and possession of cannabis limit. You'll have to show how you'll meet these requirements during your licence application.

            • limits on authorized activities
            • calculating grow surface areas and the possession limit of cannabis
            • scaling up to a standard cultivation or standard processing licence

            9.0 Prepare your information

            This section will describe the information you need to prepare for your licence application. Depending on the cannabis licences you're applying for, you'll need to prepare different information.

            • micro-cultivation licence
            • nursery licence
            • micro-processing licence
            • standard cultivation licence
            • standard processing licence
            • sale for medical purposes with possession of cannabis licence
            • sale for medical purposes without possession of cannabis licence

            10.0 Template

            You may use the Notices to local authorities template (PDF format) in completing your licence application.