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Marijuana Business in Canada - The Industry of Cannabis

Micro and Standard Cannabis Licenses: Proposed Cannabis Licensing

Licenses, Permits and Authorizations - Micro Proposal Overview

A system of licences, permits, and authorizations intended to:

  • allow a range of different activities with cannabis;
  • enable a diverse, competitive legal industry comprised of both large and small players in regions across the country;
  • reduce the risk that organized crime will infiltrate the legal industry; and
  • provide for legal cannabis products that meet high quality standards.

Proposed is a system of different types of authorizations based on the activity being undertaken (e.g. cultivation, processing, or sale for medical purposes), and in some cases, the scale of the activity (i.e. “micro” and “standard” scale).

Also proposed is that the regulations would establish rules and requirements for the different categories of authorized activities that would be proportional to the public health and safety risks posed by each category of activity.

Thresholds for Cannabis Micro-Cultivation and Micro-Processing Licenses

Proposed: the regulations would establish micro-cultivation and micro-processing licences to facilitate the participation of small-scale producers in the legal cannabis industry.

A threshold would distinguish micro-scale licensees from standard-scale cultivators and processors.

The two most popular options for the basis of a definition were the number of plants and growing area. In terms of total size, opinions on the number of plants that could be grown by a micro-cultivator ranged from less than 50 to over 1000 plants. For growing area, opinions ranged from 9 square metres (100 square feet) to 1,858 square metres (20,000 square feet).

It was generally acknowledged that a micro-processor should be large enough to be capable of processing the production of a single micro-cultivator.

The objective of the micro-scale licences is to facilitate the participation of small-scale growers and processors in the legal cannabis industry. In order to be effective, these licence categories must be able to support a viable small business.

Establishing a threshold that is too low could jeopardize the sustainability of such businesses, making such ventures uneconomical and potentially create an incentive to produce cannabis outside of the regulated framework.

At the same time, the thresholds, and what they mean in terms of expected facility size, number of employees and the quantity of cannabis stored on site, should be low enough to align with the proposed physical security requirements for micro-scale licences.

Finally, it is equally important that the thresholds be established in such a manner that there is an opportunity for small businesses to enter the regulated industry at a scale that does not create too great a burden on federal compliance and enforcement resources (e.g. inspections of licensed production facilities).

Based on the government’s objectives, the feedback received, and drawing from the experience of U.S. states that have established similar categories of licences for smaller producers, it will be proposed that the final regulations define micro-scale licences as follows:

Micro-processing licence would authorize the processing of no more than 600 kilograms of dried cannabis (or equivalent) per year, or the entire output of a single micro-cultivation licence.

Micro-cultivation licence would authorize the cultivation of a plant canopy area of no more than 200 square metres (approximately 2,150 square feet). For a sense of scale and what 200 square metres represents, see the hockey rink diagram below.

Diagram: Size of a 200 square metre plant canopy area relative to a standard North American sized hockey rink

 

 

Contact us to find out more or if you are interested in starting a cannabis business in Canada.

 

 

 

 

 

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