FAQ

At Professional Cannabis Consulting Inc. we strive to help businesses and individuals break into and succeed in the legal Canadian cannabis industry. Please see below the answers to some of our most frequently asked questions from clients and individuals that we get almost daily.  If you do not see the answer to your question below, please feel free to contact us.

What are the different types of cannabis cultivation licences?

There are two types of licenses for cannabis cultivation.

  • Standard Cultivation
  • Micro Cultivation

Standard Cultivation allows for unlimited amount of canopy space for cultivation.

Micro Cultivation allows for a maximum of 200 meters (squared) of canopy space for cultivation.

Both licences allow the following activities with cannabis

  • Possess cannabis (fresh or dried),
  • Possess seeds or plants for cultivating propagating, and harvesting.
  • Carry out activities such as drying, milling, trimming, etc.
  • Obtain cannabis for the purpose of testing or altering the physical or chemical properties.
  • Sell and distribute, fresh or dried cannabis, cannabis plants or seeds to other licence holders, this includes processors, cultivators, researchers, analytical testers, cannabis drug licence holders. There is however an exception that dried fresh cannabis cannot be sold to the holder of a nursery licence.
  • Sell and distribute fresh cannabis plants or seeds to a licensed nursery.
  • Distribute and sell fresh cannabis products such as seeds or plants to an individual who is a licence holder authorized to sell cannabis for medical or recreational under a provincial or territorial Act.
  • Deliver cannabis products such as seeds or plants to the purchaser at the request of a licence holder that is authorized to sell cannabis for medical purposes or to a person authorized to sell cannabis under a provincial or territorial Act
What are the different processing licences?

There are two types of licenses for cannabis cultivation.

  • Standard Processing
  • Micro Processing

Standard Processing allows for unlimited amount of processing per year.
Micro Cultivation allows for a maximum of 600kg of processing per year.

Here is a breakdown of what activities are allowed for both licences holders.

  • Possess cannabis.
  • Produce cannabis using methods other than propagating, cultivating, or harvesting
  • Micro-processing license does not allow cannabis synthesis.
  • Sell and distribute, fresh or dried cannabis, cannabis plants or seeds to other licence holders, this includes processors, researchers, analytical testers, cannabis drug licence holders.
  • Distribute and sell fresh or dried cannabis, seeds, plants or cannabis cultivated for the purposes of testing that is necessary to determine the chemical characterization of cannabis, such as a reference standard to licensed micro or standard cultivators.
  • Sell and distribute cannabis plants or seeds or cannabis produced for the purposes of testing, such as reference standard testing to licensed nursery.
  • Distribute and sell fresh cannabis products such as seeds or plants to an individual who is a licence holder authorized to sell cannabis for medical or recreational under a provincial or territorial Act.
  • Deliver cannabis products such as seeds or plants to the purchaser at the request of a licence holder that is authorized to sell cannabis for medical purposes or to a person authorized to sell cannabis under a provincial or territorial Act
  • Processing licences authorize holders to produce oils, which are not permitted under cultivation licences.

The micro-processing maximum quantity does not apply to a licence holder that also holds a micro-cultivation licence for the same facility if the cannabis comes exclusively from that facility.

What is a sales licence?

A sales licence is a licence to sell cannabis for medical purposes to those who already have a medical license. Note the requirements for the application for a sale for medical purposes licence with possession of cannabis differ from those that do not have possession.

Here is a breakdown of what the licence will allow the holder to perform

  • Possess cannabis and cannabis related products
  • Only allowed to sell cannabis products in packaging in which they were sold or distributed to them in.
  • Distribute or sell cannabis products to individuals who have a medical cannabis license, except for a cultivator.
  • Distribute or sell cannabis products such as plants, seeds or dried flower to standard or micro-cultivator license holders.
  • Sell or distribute cannabis plants or seeds to a licensed nursery.

Distribute or sell cannabis products to hospital employee except for plants and or seeds.

What is a nursery licence?

A nursery cultivation licences allows to produce cannabis plants and seeds in a facility with no more than 50 meters squared of growing canopy space and is not including fresh or dried cannabis or cannabis oil storage.

Here is a breakdown of what the licence will allow the holder to perform

  • Possess a maximum of 5kg of cannabis flower harvested from plants.
  • More than 5kg of cannabis flower, must be destroyed except for cannabis seeds within the first 30 days of harvesting.
  • Obtain cannabis plants or plant seeds by cultivating, propagating, and harvesting.
  • Obtain cannabis for the purpose of testing or altering the physical or chemical properties.
  • Deliver cannabis products such as plants or seeds to a purchaser at the request of a licence holder that is authorized to sell cannabis for medical purposes or to a person authorized to sell cannabis under a provincial or territorial Act.
  • Distribute or sell cannabis plants or seeds to other licence holders (cultivators, processors, researchers, analytical testers, cannabis drug licence holders).
  • Sell and distribute cannabis products that are plants or seeds to a licence holder that is authorized to sell cannabis for medical purposes or to a person authorized to sell cannabis under a provincial or territorial Act.
Who are the individuals in an organization that need to be cleared for security purposes?

All individuals within a cannabis production facility should be properly cleared for security reasons. Below are the titles and positions along with which type of licence is required.

  • Director – All licence classes are required if the applicant is a corporation or a cooperative.
  • Partners – For all licence classes if the applicant is a partnership.
  • Officers – For all licence classes if the applicant is a corporation or a cooperative.
  • License holder – For all licence classes where licensed holder is an individual.
  • Responsible person – For all licence classes. This position is sometimes referred to the individual who is the licence holder.
  • Head of Laboratory – For analytical testing only.
  • Head of Security – For cultivation, processing or sale for medical purposes licence only.
  • Master Grower – For cultivation license only.
  • Quality Assurance Person (QAP) – For processing only.
What are the qualifications for the Quality Assurance Person (QAP)?

The QAP typically handles adverse reaction reports and recalls. The applicant should submit the resume of the individual(s) and any other relevant information such as a letter of reference or a copy of the appropriate diploma, degree, certificate or transcript.

There should also be a proposed schedule of work and a summary of the roles and responsibilities of the QAP and its alternate, if applicable, to demonstrate how the QAP will be able to complete all the activities required to maintain compliance.

Details necessary for the qualifications of the individual and any specified alternative QAP, indicating that they had the training, experience and technical expertise linked to all demands in the Cannabis Regulations including:

  • Complaint management.
  • Sample retention and collection.
  • SOP development and approval.
  • Testing for chemical and microbial contaminants.
  • Testing for solvent residues in cannabis oil.
  • Pest control management including testing of pesticides.
  • Good production practises in facilities including equipment and sanitation.
  • Approving product quality before release for sale.
  • Storage and shipment of substances quality control.
  • Validation and analytical testing of testing methods.
  • Testing cannabis capsules for disintegration/dissolution if applicable.
  • Test cannabinoid content including THC, THCA, CBD and CBDA, as applicable.
What are the analytical testing processes to be conducted on cannabis?
  • Cannabinoid content including THC (delta-9-tetrahydrocannabinol, THCA (tetrahydrocannabinolic acid), CBD (cannabidiol) and CBDA (cannabidiolic acid)
  • Microbial including contaminants such as bacteria, molds, yeast, and aflatoxins. It is important to note that while sterility appears as its own item within testing it is typically included in the context of microbial testing.
  • Chemical testing for contaminants such as foreign matter and heavy metals.
  • Seed viability testing.
  • Pesticides on plant matter.
  • Solvent residue in cannabis oil (if applicable).
  • Dissolution / disintegration of capsules containing cannabis.
  • Sterility and cleanliness of product.
  • Stability and expiration date of products.
What notices are given to local authorities?

Applicants for licenses to grow, process and sell for medical purposes (with cannabis possession) must submit a copy of the written notification to local authorities situated in the region of the suggested site as part of their implementation before submitting a request in the CTLS.

Notices should be individually dated with the name and address of the senior local authority officials to whom it was addressed. The senior local authority officials include the following:

  • Local government
  • Royal Canadian Mounted Police (RCMP) or local police force that is responsible for policing services to the area.
  • Local fire authority

All notices must include the following content:

  • Expected date on which the applicant will submit the application to Health Canada
  • Name of the applicant
  • The site address and address of each construction/building on site (if appropriate) where the applicant expects cannabis-related operations to be carried out.
  • The license class and/or subclass being sought and the list of operations which will be anticipated to be carried out under that license.
What is the approval process?

There are a number of steps Health Canada undertakes to review and issue the license as outlined below once an application is submitted in the CTLS. It is essential to note that the Minister may request submission of additional information relating to the information contained in the application pursuant to 62(5) of the Cannabis Act, which is necessary for the Minister to consider the application request..

Application screening: The request and attached records are evaluated for completeness, readability and the capacity to be further evaluated during screening. There is a 30-day service standard for Health Canada to complete the request screening.

Review and security clearance: Once the request is passed the screening phase and applications for security clearance are processed, the request will undergo a thorough evaluation to confirm compliance with the specifications. Health Canada will operate on requests for clearance of safety with the RCMP.

Pre-licensing and approval process: Once the thorough evaluation of the submitted application is completed by Health Canada, Health Canada will provide the applicant with a readiness email confirmation. This email will prompt the applicant to show information that there is a functioning facility / building at the address of the site.

The applicant will be required to provide documentation with a site evidence package including, but not limited to, detailed video walkthroughs of both the site’s interior and exterior, and site and building plans including descriptions and photographs clearly detailing the completion of the facility.

It should be noted that following the evaluation of this information, Health Canada inspectors may consider an on-site pre-license inspection needed before further licensing choices are made. If an inspection is necessary, the inspection team will email the applicant to plan the prelicence If a pre-license inspection on-site is not needed, the issuance of the license will be based on the thoroughness of the data discovered in the site evidence package.

Issuance of licence: Once all documents, including the findings and observations from a pre-license inspection, have been reviewed and, if needed, all safety clearances have been given, an original license is awarded for approved operations. A hard copy of the license will be mailed to the identified mailing address as well as an accompanying issuance letter detailing any circumstances around the license granted.

Additionally, letters will be sent to all security-cleared key personnel regarding the status of their security clearances for that site, under that application. Health Canada will then hold a teleconference with the new license owner(s) after the license has been issued to discuss the license, including any conditions.

Can I cultivate outdoor as well?

Yes, cultivation may be conducted both indoors and outdoors.

Do I need an address before submitting an application with Health Canada?

Before the submission of your application to Health Canada, a site address is required on your application. It should be noted however that you do not need a physical building right away to start your application.

Can a micro producer apply for an export/import licence?

Yes, a micro producer can apply for an export/import licence. The regulations on import and export work within the framework of Canada’s global drug treaty commitments. As such, they are not a vehicle to supply overseas markets with cannabis where recreational use is legal.

Any licensed party choosing to submit a request for an import or export license should expect stringent demands, including but not restricted to:

  • Whether the request complies with the appropriate MMPR or NCR provisions.
  • For export permits, whether the country of final destination has issued an import permit.
  • Risks to security and public safety including the risks of diversion.
  • Canada’s obligations under international treaties
What does security clearance entail?

To approve your application, a Security Clearance Application must be submitted for each person requesting a security clearance. The applicant must submit a “Security Clearance Fingerprint Third Party Consent to Release Personal Information Form” as part of the criminal record check process.

This must be made available to the local police force, the RCMP, or a RCMP accredited personal fingerprinting agency. The form authorizes the RCMP to release to Health Canada the results of criminal record checking and fingerprint verification.

Once fingerprinting is completed a document control number (DCN) is given on the form, which is used as the identifier for the record check.

Depending on your file, the process with the local police force, the RCMP, or a private fingerprinting agency accredited by the RCMP may take 3 days to 180 days.

Does the building need to be a standalone?

If you are linked to other entities, no additional safety parameters will be required to approve the site.

How long is the cannabis licence from CRA valid for?

Your license will be valid for up to 2 years. Your license will not be renewed automatically. You must apply for a license renewal no later than 30 days before your present license expires to renew your license. During the period you are licensed, you must continue to fulfill the license criteria.

Can pesticides be used?

Unless the pesticide is approved for use on cannabis under the Pest Control Products Act or otherwise approved for use under that Act, cannabis must not be treated with a pest control product.

Who should apply for a CRA cannabis license?

Under the Excise Act, 2001 you must apply for a cannabis licence if you are:

  • Packaging cannabis products (packaging)
  • Producing cannabis products (producing)
  • Growing cannabis products (cultivating)

You must apply for a CRA cannabis licence even if you have a Health Canada licence for both non-medical (recreational) and medical purposes. A distinct application form is needed for individuals who will be packaging cannabis products to register for the cannabis stamping system.

Cannabis excise stamps will be supplied as individual dry (non-adhesive) stamps wrapped in packages of 500. For the period April 1, 2018 to September 30, 2019, the unit cost of cannabis excise stamps is C$ 0.00714.

How long does it take to become licensed?

The processing times for applications vary and depend on several factors, including:

  • The complexity of the application.
  • The completeness of the application
  • Thoroughness of information provided.
  • Timeliness of applicant responses for additional information and readiness to move through the process.
  • Whether there are any risks to public health, security or safety with the application.

Depending on your security clearance the application process can take anywhere from 6 months to more than a year to complete.

Depending on the complexity of the applicant’s file the security screening timeline of key personnel can also vary.

It is the applicant’s duty to ensure that the data given in their application is comprehensive and precise and clearly shows that they comply with all the Cannabis Act conditions. Refusal may be due to insufficient or inaccurate information.

What are Health Canada’s cost recovery fees?

The four fees being proposed are:

  • Application Screening Fee
    Standard licences = $3,277
    Micro and Nursery class licences = $1,638 (50% of standard)
  • Security Screening Fee
    Fee per screening: $1,654
    • Import/Export Permit Fee
    Import/export Permit Fee: $610
  • Annual Regulatory Fee

Standard licence holders are subject to a recovery rate of 2.3%* of their gross revenue per licence or $23,000 in cases where a licence holder earns annual revenue less than $1M

Micro class licences including nursery licences are subject to a fee set at 1% of gross revenue up to $1M, or $2,500. For gross revenues above $1 million, they would pay 2.3%*

Please note that the Annual Regulatory Fee would not apply to those that cultivate, process and sell cannabis exclusively for medical purposes.

The rate of 2.3% may need to be adjusted upward depending on the final decision to apply the fee based on forecasted or previous year’s actual revenue or a combination of the two.

What are the eligibility conditions for a CRA cannabis licence?
  • Everyone involved must be at least 18 years of age or older.
  • Have a valid business address in Canada.
  • Provide a business plan that includes an operational plan, financial plan, a business industry overview, and a sales and marketing plan.
  • Provide security to cover one month of cannabis duty liability with a minimum of $5,000 and a maximum of $5 million dollars.
  • Over the previous five years, you have not failed to comply with any Act of Parliament (other than the 2001 Excise Act) or of a provincial or territorial legislature dealing with alcohol or tobacco taxation or control, or any laws under it.
  • You are not the subject of a receivership of your debts.
  • In the past 5 years you have not acted to defraud her Majesty.
  • Provide a full list of all premises that will be producing, cultivating and packaging cannabis products.
  • Have enough economic resources to carry out your company responsibly.
  • Under the proposed Cannabis Act hold a valid issued licence/permit from Health Canada.
How do I calculate the duty on cannabis?

For those who have a cannabis licence and packags cannabis products, they must pay applicable duties.

For cannabis products that are imported, the importer or owner or other person who is liable under the Customs Act is the person who must pay the duty. A cannabis licensee does not have to pay the duty at the time of importation.

For more information on how to calculate excise tax please visit the following link: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/excise-duties-levies/collecting-cannabis.html