Making the decision to enter the Canadian cannabis industry can be extremely daunting. Although the Government of Canada has made a number of different guidance documents readily available for any cannabis industry hopeful to review, oftentimes deciding how to proceed can still prove to be difficult. If you are looking to commercially cultivate cannabis in Canada, the first step is understanding the different licence types that are available to you as well as the different restrictions or requirements that are associated with each one of them. Once you are able to understand the various options that are available to you, you will be able to make a much more informed decision before diving into the application preparation process.
Deciding you would like to commercially produce cannabis is the easy part. Determining which licence you would like to apply for can be a little trickier. For instance, there are a number of different factors to consider when choosing the type of licence you want. But, before we get into the specifics, it would be important to note what different types of cultivation class licences issued by Health Canada are available. As per subsection 8(3) of the Cannabis Regulations, there are three established subclasses of licence for cultivation. These subclasses are as follows:
Now that you are aware of the different subclasses of licence for cultivation, we will address what each of these licence subclasses permits you to do should you successfully submit a licence application to become a federally licensed producer under the Cannabis Act.
If you are looking to cultivate cannabis, you are going to need to submit a licence application to Health Canada for a micro or standard cultivation licence. The two licence types are almost the exact same when it comes to authorized activities. For example, as per section 11 of the Cannabis Regulations, a holder of a licence for micro cultivation or standard cultivation is authorized to possess cannabis, to obtain dried cannabis, fresh cannabis, cannabis plants or seeds by means of cultivating, propagating and harvesting cannabis, and to sell cannabis. After reading this, you may ask yourself, “If the authorized activities are the same, why have two different subclasses of licence?”. The answer? Total permitted canopy space.
At the standard level, licence holders are permitted to cultivate cannabis on a large scale. Their canopy space can be as big or as small as they choose. On the other hand, at the micro level, licence holders are restricted to a canopy space that is less than or equal to 200 square metres or approximately 2,152 square feet. With differences in canopy space also comes differences in physical security requirements. Because standard licence holders are able to choose how big or small their canopy space is, they are subject to more stringent physical security requirements when it comes to visual monitoring, intrusion detection and access control. On the other hand, micro licence holders are not required to have visual monitoring or intrusion detection systems in place however most licence holders choose to implement these systems as a business decision. When it comes to access control at the micro level, you are technically only required to have access control on your secure storage room where you will be storing your cannabis once it has been harvested and processed (e.g., trimmed, dried, cured).
Let’s say you aren’t too keen on growing cannabis for its flower but instead want to focus on growing starter materials such as plants and/or seeds. If this is the type of commercial cannabis production you are interested in then the nursery licence type is the one for you. Unlike the standard and micro cultivation licence types, with a nursery licence you are only allowed to obtain cannabis plants or seeds by means of cultivating, propagating and harvesting cannabis. With this licence type, you are not permitted to grow cannabis flower, the dense, trichome-rich buds produced by female cannabis plants. All flower produced by a nursery licence holder for the purpose of producing seeds must be destroyed within 30 days of harvesting them. Furthermore, you are not permitted to possess more than five kilograms of flowering heads at any given time. Similar to the micro cultivation subclass of licence, nursery licences also have limitations in terms of their canopy space. For a nursery, you are limited to a total surface area of 50 square metres or approximately 538 square feet.
If you are looking to commercially produce cannabis, knowing what licence you’d like to apply for is just the first step. Licence applications can be time complex and tedious. Our experts at dicentra Cannabis Consulting can provide you with the guidance, knowledge and understanding you need in order to successfully navigate the licence application preparation and submission processes. Contact us today to speak to one of our industry professionals to see how we can help you.