Marijuana Growers Install Required (and Expensive) Vaults for Security, Now The Rule is Scrapped

Article by Mark Rendell, Financial Post

Marijuana growers install required (and expensive) vaults for security, now the rule is scrapped Health Canada inspections found no evidence marijuana was being diverted from licensed producers into the black market. A cannabis vault used to store marijuana. Health Canada says the vaults are no longer a requirement. Glenn Lowson for National Post

Over the past six months, Damian Kettlewell’s small Vancouver-based medical marijuana company, BlissCo, has spent more than $100,000 buying, installing and retrofitting an old HSBC cash-transfer-station vault — complete with a 7,500-lb. door — in order to satisfy Health Canada’s strict security requirements for growing cannabis.

On Thursday night, he found out he didn’t need it.

“We’re one of dozens of applicants in a similar situation,” said Kettlewell, after learning that Health Canada was scrapping the expensive security requirement after determining that the old rules, “do not align with the existing evidence of risks to public health and safety.”

The move comes after nearly 1,000 Health Canada inspections over four years found no evidence that marijuana was being diverted from licensed producers into the black market.

Along with ending the vault requirement, Health Canada also decided to eliminate a rule requiring 24-hour video surveillance inside all growing and harvesting rooms.

The changes are being applauded across the industry for significantly lowering the cost of entry for would-be producers. But they do illustrate the risk of a rapidly changing sector.

People “need to skate where the puck is going,” said Dan Sutton, CEO of Tantalus Labs, a Maple Ridge, B.C-based licensed producer. “If you’re building a cannabis cultivation facility for what the (Access to Cannabis for Medical Purposes Regulations) looked like two years ago, you are not going to be able to effectively adapt to a changing regulatory environment that is inevitably going to iterate over time.”

Tantalus built its vault with refrigeration capacity, said Sutton, so it will still be useful for storing products. “The bank door is perhaps the one caveat to all of this. We do have a $15,000 bank vault door that is now a lot less relevant than it was yesterday.”

Sheldon Croome, president and CEO of Atlas Growers Ltd., an LP-applicant near Edmonton with a new $100,000 vault, said that having a vault on site remains a good idea, even if it’s not a requirement.

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