Area of Law: Cannabis Law
Answer # 2466
Who is licensed to cultivate and produce cannabis for legal sale?
Region: Ontario Answer # 2466Health Canada is responsible for licensing commercial cannabis growers and overseeing the distribution of cannabis to suppliers. Licensed producers (LPs) of cannabis can grow and package both medicinal and recreational cannabis for sale to the public, however, they do not sell directly to the public. Along with a Health Canada licence, those intending to cultivate, produce and package cannabis products must also have a Canada Revenue Agency (CRA) Excise tax licence.
Who needs a Health Canada licence?
In all provinces and territories, under the federal Cannabis Regulations, you must obtain a licence from Health Canada if you wish to:
- cultivate (grow) cannabis for sale (on a large or small scale, or for starting materials, such as seeds and plants)
- make or produce cannabis products (on a large or small scale)
- sell cannabis for medical purposes
- conduct analytical testing of cannabis
- conduct research with cannabis
Types of Health Canada licences
1) Cultivation licences:
(a) Standard Cultivation Licence:
- for large-scale growers of cannabis
- any variety of cannabis can be grown
- can produce seeds, cannabis plants, fresh and dried cannabis
(b) Micro-Cultivation Licence:
- for small-scale growers of cannabis
- any variety of cannabis can be grown
- can produce seeds, cannabis plants, fresh and dried cannabis
(c) Nursery Licence
- for growers of starting materials
- any variety of cannabis can be grown
- can produce seeds and seedlings
(d) Industrial Hemp Licence
- can grow approved varieties of industrial hemp (containing 0.3% THC or less)
- can sell the whole plant
2) Processing licences
You also require a processing licence if you want to process cannabis and sell it to other licensed cultivators or processors, federal sale license holders, Provincial and territorial authorized sellers, or Authorized researchers.
(a) Standard Processing Licence
- for production of large-scale cannabis products (e.g., cannabis oil)
- for production of packaging and labelling products for sale to the public
(b) Micro-processing Licence
- for production of small-scale cannabis products
- for production of packaging and labelling products for sale to the public
3) Licence for sale for medical purposes
Requirements for obtaining a Health Canada licence
The Federal Cannabis Act and it’s Regulations set out the requirements for obtaining the above licences. While the requirements may differ depending on the type of licence applied for, all applicants must do the following:
- become familiar with the relevant laws (Federal, Provincial, Territorial, Municipal, and Indigenous government);
- determine what type of licence to apply for;
- create an account in the Cannabis Tracking and Licensing System (CTLS);
- have individuals associated with the application create CTLS accounts;
- create a corporate profile; and
- create and submit application (may be submitted online).
Site evidence submission and security clearance
Applicants must also have a fully built site that meets all the requirements of the Cannabis Regulations at the time of their application. Health Canada will require a site evidence submission to demonstrate the completion and functionality of their facility before an application can be considered. The RCMP will also conduct extensive security checks on all the people who require security clearances before a licence is issued.
Who requires a security clearance?
Under the Cannabis Act, the following people must pass a security clearance to obtain a licence to cultivate, process or sell:
- Directors and Officers of a corporation
- Partners in a partnership
- Individuals who are applying for a licence
- Master grower and any alternate applying for a licence to cultivate only
- Quality Assurance Person (QAP or any qualified alternates applying for a licence to process only)
Once your application has successfully passed the initial screening, Health Canada will complete an in-depth assessment to determine if a licence will be issued. ance with the Cannabis Act and Regulations licences are only issued after.
Canada Revenue Agency Excise tax licence
Requirements to obtain an Excise licence include:
- personnel security clearances;
- cannot be the subject of receivership of their debts;
- a valid business address in Canada;
- providing a list of all premises that will be cultivating, producing and/or packaging cannabis products
- sufficient financial resources to conduct their business in a responsible manner; and
- each individual involved must be 18 years of age or older.
Requirements after licences are obtained
After both a Health Canada licence and a CRA Excise licence are obtained, cultivators, producers and packagers of cannabis products must complete the following three steps:
- Purchase and apply cannabis excise stamps to their products (if they package cannabis products).
- Calculate the duty on their sales.
- File their return and remit excise duty to the CRA.
For more information on cannabis and tax refer to How are cannabis sales taxed?
Keeping your CRA licence
CRA can suspend or cancel a licence for a number of reasons, including if the licence holder:
- becomes bankrupt;
- stops cultivating, producing or packaging cannabis products;
- fails to notify the CRA of any changes to licensing information as required by law; or
- the licence was issued on the basis of false or misleading information or falsified documents
A CRA cannabis licence is valid for a maximum of 2 years. It is not automatically renewed. You must apply for a licence renewal no later than 30 days before the expiration date of your current licence.
More information
For more information on the Excise licence and to view the complete list of requirements, visit canada.ca.
For more information on the types of cannabis licences and requirements, view the Government of Canada’s Cannabis Licensing Application Guide: Cultivation, processing and sale for medical purposes licence.
For help
To erase your criminal record for simple cannabis possession or any other criminal charges, call toll-free 1-888-808-3628 or learn more at Pardon Partners. It’s easier than you think.
If you have been charged with a criminal offence, it is important to hire an experienced criminal defence lawyer as soon as possible. Contact our preferred criminal defence expert, Calvin Barry Criminal Lawyers for a free consultation at 1-866-961-4963 .
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