There are two types of facility licences that can be obtained from Health Canada that permit the cultivation (production) of cannabis, namely a Micro Cultivation Licence and a Standard Cultivation Licence.
In deciding which licence is appropriate, the difference comes down to the size of the canopy space. Canopy space is the amount of square footage within the facility devoted to the vegetation and flowering of cannabis plants, and which does not include supporting rooms such as processing, administration and shipping/receiving etc. A facility which has 200 m2 (i.e., 2152 ft2) or less of canopy space would fall within the Micro Cultivation Licence, whereas facilities with a larger canopy space would require a Standard Cultivation Licence.
The Standard Cultivation Licence cannot co-exist at the same address with a Micro Cultivation Licence. However, a facility with a Standard Cultivation Licence can also stack other licences at the same address to allow for other activities – including these licences: Standard Processor Licence, Analytical Testing Licence, R&D Licence, and Nursery Licence. (Note that under the previous Access to Cannabis for Medical Purposes Regulations (ACMPR) the Licensed Producer type of licence covered both production and online sales, whereas under the new Cannabis Regulations the Standard Cultivation Licence only covers cultivation and not medical sales.)
In comparison with a Micro Cultivation Licence, the Standard Cultivation Licence does require visual monitoring/recording of certain premises within the facility. This is within the rationale that a Standard Cultivation Licence facility would have significantly more cannabis present on time (higher security risk). The Standard licence allows a company to possess and produce cannabis (dried, fresh, plants, genetics including seeds). Note that Health Canada does not dictate the growing method for cannabis; a variety of different methods can be chosen (e.g., aeroponics, hydroponics, traditional soil/pots), nor does Health Canada dictate the lighting equipment or nutrients provided for production.
With a Standard Cultivation Licence, a company is permitted to sell wholesale to either a provincial distribution channel (fresh/live plants/seeds) or dried flower/oil to a company with a Processor Licence (Micro or Standard). If the Standard Cultivator also wishes to sell online to Canadians for medical purposes, they must also apply for a Medical Sales Licence which can be stacked onto the Standard Cultivation Licence. However, the Standard Cultivator cannot manufacture cannabis oil or edibles, which requires (or will require) a Processor Licence in addition.
With the Cannabis Act coming into force on October 17, 2018, Health Canada will not permit Standard Cultivators to grow either indoors (greenhouse, warehouse) or outdoor (farming). With indoor production, either greenhouse or “warehouse” the general requirement is to follow Good Production Practices (GPP) standards, which are largely borrowed from a number of different standards including Good Agricultural Practices (GAP). A higher standard of production can also be adopted to allow the facility to export to other international markets, namely Good Manufacturing Practices (GMP) which are closer to pharmaceutical standards and which eliminates risks in producing contaminated products. For both production standards, analytical testing is required for microbial and chemical contamination (note that a licensed producer can do their own analytical testing in-house, but pesticide testing must be done via a third party facility that holds an Analytical Testing Licence). The producer must also establish appropriate Standard Operating Procedures (SOP’s) for their operations (e.g., recall, record keeping, sanitation, pest management).
The application which CCI prepares requires a substantial collaboration across different disciplines in order to present a package to Health Canada that speaks to professionalism and competency. The role of CCI in the application process is to provide our clients with a foundation of best practices for them to adopt for their operations, including cultivation and quality assurance. As part of the approval process, Health Canada is also reviewing an applicant’s business plan and financial model. CCI assists in the facility (floor plan) design, provides an organizational security plan, summarizes the site details, provides support for notification to local authorities, provides support with the CTLS online portal/communication, provides clarification on required security clearances, security training, required Standard Operating Procedures (SOP’s) and submission/follow-up communication with Health Canada during the life cycle of the application… Our Recruitment Division will also support the applicant in the recruitment/hiring of the Head Grower and Head of Security. Through our Education Division, CCI is also able to help bring our clients’ employees up to a higher skill set in both production and quality assurance.
Note that only a fully built-out facility will be eligible for a licence, and Health Canada does not offer any “ready to build” (or similar) authorizations ahead of construction; the applicant will need to build out the facility before/during the application is under review.
After the initial licence is achieved, it should be noted that Health Canada will inspect the facility on a regular (usually monthly) basis to ensure compliance in all areas covered within the Cannabis Regulations. CCI is often recruited to provide operational readiness programs and training programs to ensure the facility is functioning without error or non-compliance.
A notable change in the Canadian regulatory system for 2018 is that “black market” genetics (i.e., plants and plant seeds) that are illegal will now be allowed to be brought into a newly licensed facility. The plants or plant materials must be brought into the facility on the first day of licensing, as a one-time influx of genetics. As this was not permitted under the previous regulations, this is seen by many to be a huge opportunity to welcome illegal growers into the new legal market. Note that this is not an allowance for existing licensed producers; it will only be permitted as a one-time allowance for new applicants.
Cannabis Compliance Inc has best-in-class experts with practical experience from commercial horticulture (including LP operations), pharmaceutical/GMP, recruitment and education to give our clients the premiere advantage in coming to market quickly while providing the strongest foundation for staying compliant.