Important changes to applications for federal cannabis licences

14 May 2019

Health Canada has introduced new eligibility requirements, effective immediately, for three classes of cannabis licences: cultivation, processing and sale for medical purposes.

New applicants for a federal cannabis licence are now required to have a fully built site that meets the requirements of the Cannabis Regulations at the time of application, in addition to satisfying other application criteria. Specifically, applicants must submit a site evidence package that contains visual evidence to demonstrate both the completion and functionality of their facility. It is only after receipt of this package that Health Canada will conduct its initial, 30-day screening of the application. For more information, please refer to Health Canada's new guidance on the licence application process, good production practices and physical security measures.

For existing applicants that have not yet received a confirmation of readiness letter, Health Canada will complete a preliminary review of the application and determine whether it has any critical concerns with the applicant's proposed activities. If there are no concerns, Health Canada will wait for the applicant to establish a site that meets the regulatory requirements and then conduct a more detailed review on a priority basis (based on the original application date). Only applications that have already received a confirmation of readiness letter will be unaffected.

Health Canada's position seems to be that these changes will reduce wait times. If this comes true, it would improve the application process, which, at this time, is painfully slow.

Notwithstanding the potential upside, these changes pose significant financial challenges for new applicants, including those angling to enter the market with new cannabis extract, topical and edible products come October. It could also perpetuate existing supply issues if viewed as a deterrent to new, would-be cultivators.

As an additional complexity, Health Canada's proposed regulatory amendments, if unchanged, would prohibit the manufacturing of edibles in the same facility as conventional food. This effectively means that companies intending to manufacture edible cannabis products will be required to demonstrate that they have what is essentially a food manufacturing facility ready before submitting an application for a processing licence. Despite the capital investment into the facility, it would likely have to remain dormant throughout the licence application process. At this time, even with these changes, we have no sense of what the actual timeline would be from the point of facility set-up to obtaining a licence.

This article was prepared with the assistance of Megan Peterman (legal intern).


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