Applicants seeking to obtain a Health Canada licence to cultivate and process cannabis and those seeking to sell cannabis in the medical market, will now have to show that they have a fully built cultivation site ready to go before they even begin the application process, Health Canada announced Wednesday.
It is a sweeping change from the present system, where applicants looking to become licensed cannabis producers had to merely secure a site before starting the application process. In many cases, a pre-approval letter from Health Canada stating that an application was in the queue would enable an applicant to begin raising funds from investors in the sector to fully build out a site.
“You did not even need a shovel in the ground to begin the application process, which can sometimes take years. Now you have to raise tens of millions and convince investors that you will get a Health Canada licence, when you have no physical proof of it,” said Trina Fraser, Partner at Brazeau Seller Law who advises cannabis companies on the licensing process.
To date, there are still hundreds of applications — either by existing producers looking to expand their cultivation sites, or new entrants to the cannabis space looking to obtain an initial cultivation licence — that Health Canada is processing.
In its statement, the department said it is implementing these adjustments to “better allocate” departmental resources. “A significant amount of resources are being used to review applications from entities that are not ready to begin operations, contributing to wait times for more mature applications and an inefficient allocation of resources,” Health Canada said.