Thinking of starting a cannabis business? Not sure where to start or what’s required? Cannabis License Exerts can help! We’ve put together a list of our Top 10 tips on how to successfully obtain a cannabis license so you can get your business up and running.
1. Familiarize yourself with the relevant legislation around cannabis.
When it comes to cannabis, there is MUCH to learn. To operate a successful cannabis business, it’s important that you are knowledgeable on the relevant federal, provincial and municipal legislation around cannabis. By familiarizing yourself with legislation, you will gain an understanding of activities that are permitted and those that are not, as well as your responsibilities as a license holder. Success comes with compliance, so this is a great place to get things started.
2. Carefully chose which license is right for your business.
There are several different federal cannabis licenses that are available, depending on the activities you would like to conduct with cannabis.
Those looking to Cultivate cannabis are required to hold one of the following licenses:
- Standard Cultivation license (permits cultivation in an unlimited-sized grow space).
- Micro-Cultivation license (allows for cultivation in a grow space of up to 2,152 square feet).
- Nursery License (permits the cultivation of cannabis genetics such as clones and seeds, within a maximum 540 square feet).
Those looking to Package cannabis products and Manufacture cannabis-based products (cannabis extracts, edibles, topicals, etc.) are required to hold one of the following licenses:
- Standard Processing license (handling of over 600 kg of dried flower [or the equivalent] per year).
- Micro-Processing license (handling of up to 600 kg of dried flower [or the equivalent] per year).
Those looking to sell packaged cannabis products to Medical Patients will require a Sale for Medical Purposes license. This licence can be sought with possession of cannabis or without possession of cannabis.
A Research license will permit all kinds of cannabis-related studies, from advancements toward better growing and processing techniques, to improving upon cannabis-based products, and more.
An Analytical Testing license will permit the testing of cannabis products. Testing can include chemical and microbial contaminants, cannabinoid content, pesticides, dissolution/disintegration, solvents, sterility, stability, etc.
3. Consider what kind of site you need for your proposed activities.
Your site should reflect the type of license you are seeking and the activities you would like to conduct. Those seeking Standard licenses will need a larger site with buildings and rooms that will accommodate the activities taking place. Micro licenses generally don’t require as much space as they are limited in the amount of canopy space and the amount of cannabis which can be processed.
If you are looking to process cannabis or conduct research with cannabis at a site where commercial food products are produced, you will need a separate building on your site to do so, as these activities are not permitted in the same building where commercial foods products are produced, packaged and labelled.
If outdoor grow is an option, you’ll want a site where there is a large plot of land available where plants already grow well. Ideally, the land should be protected from the elements, and be in an area that is easy to water, and has good drainage. You may also want to consider privacy and security – you may want to conceal your site from neighbors /the public and potential thieves. In this case, tall fences and large shrubs or trees are your best deterrent. It’s important to consider all of these factors when you’re deciding on a site for your cannabis business.
4. Before you secure a site, ensure it is zoned correctly and then secure any necessary building permits.
Under Health Canada’s new licensing regime, applicants are required to have a site that is fully built out, prior to submitting a licence application. Therefore, it is your responsibility to comply with all applicable provincial or territorial laws (e.g. environmental laws) as well as municipal by-laws (e.g. zoning and building permits). Before securing a site location and starting any kind of construction, it is important that you contact the local municipality where your site is located, and determine if the site is zoned correctly for the proposed use. For example, commercial-scale cannabis cultivation is a form of agriculture. Most zoning by-law definitions of agriculture would include cannabis, unless the cultivation of this particular crop has been carved out of the permitted use category. Thus, it’s important to contact the local planning department at the earliest stage in order to determine whether, and where, such a use may be permitted. Your ultimate goal is to obtain an official Zoning Certificate from the applicable municipality.
Once your site has been secured, the next step will be to secure building permits. Licensed producers are required to obey municipal zoning by-laws and a Chief Building Official will refuse to issue a building permit for any proposed construction or new development that does not comply with the provisions of a zoning by-law. While it is possible to apply to a local municipality to amend or seek a minor variance to a zoning by-law as it applies to a particular property, the process can be costly and there is no guarantee of success. Because of this, we advise prospective cannabis businesses to seek out locations where cannabis production facilities are explicitly denoted as a permitted use in the applicable zoning by-law and official plan. This way, you can be more confident that your business will receive municipal and public support.
5. Prepare a business plan.
A good business plan is highly detailed and essential for your cannabis business to succeed. Not only will it help you plan out the lengthy process of establishing a cannabis business, it will also help you focus on the specific steps to reach your short- and long-term goals and objectives. You’ll also need a well written business plan if you’re looking to raise funds from investors and lenders. Investors and banks will only risk their time and money if they’re confident your business will be successful and profitable. A basic description of your business idea is not enough. Your business plan should be clear, easy to read, detailed and informative. It should cover strategies for achieving your objectives, as well as financial details like predicted profits and income streams and potential pitfalls in your plan. We strongly advise that you contact a professional to ensure your business plan is well written, structured and effective.
6. Find the right contractors for your business.
A simple construction project can become a very frustrating experience if the right contractors for the job are not chosen. Your contractors should have a solid track record of integrity. It’s important that you’re able to maintain a close relationship with them through the proposal, planning and construction stages. You should consider working with contractors who have experience working within the cannabis industry specifically, and are familiar with the requirements that relate to your project.
You should establish a budget for your project and find out if your contractors are able to work within this. Keep in mind, a seemingly low price up front will do you no good if you’re constantly hit with change orders to get what you really wanted, resulting in a project that balloons way over your budget. Also, you should take some time to ask any questions on your mind, including how well the contractor does in getting projects completed on time. Before starting any of your construction work, we advise you to speak with multiple contractors you may be considering and get written proposals from each of them. When you compare bids, make sure each one includes the same materials and the same tasks, so you’re comparing apples to apples.
7. Get your site GPP ready.
Having a fully built site means your location must be compliant with physical security requirements, as well as Good Production Practices (GPP). GPP helps ensure that cannabis is produced consistently and that all activities conducted by licence holders with cannabis meet quality standards appropriate for the intended use of the cannabis. Examples of a GPP ready site include (but are not limited to):
- Floors, ceilings, and walls of all GPP/production areas should be hard and non-porous, chemically resistant to degradation from disinfectant chemicals, non-absorbent, free of cracks and crevices, sealed, durable/non-shedding and cleanable.
- The building or part of the building used for production, packaging, labelling and storage of cannabis is equipped with an adequate ventilation system that is capable of maintaining the air quality within it (HVAC system). The HVAC system must eliminate any airborne contaminates in the form of mould, yeast, bacteria, pests, or pollen, and prevent the escape of odours from the building.
- An effective pest control program must be in place to prevent the entry of pests to any part of the building (e.g. glue boards and fly lights placed around the non-production areas of the facility), to detect and eliminate pests and to prevent the contamination of cannabis.
- Production equipment must be designed, constructed, installed, and maintained to facilitate cleaning, sanitizing, and inspection of the equipment and surrounding areas.
Making sure your site is fully compliant with GPP and physical security requirements will mean fewer questions from Health Canada during the review of your application.
This could potentially save you weeks of time so your business can be up and running sooner rather than later.
8. Build a strong team of trained and qualified employees.
A team of trained and qualified employees is essential for a business to be successful. The Cannabis Regulations require licence holders to retain the services of certain personnel such as a Head of Security, a Master Grower, a Quality Assurance Person or a Head of Laboratory. Qualified employees are key to a business running smoothly and efficiently. However, finding (and keeping) the right employees can certainly be a challenge. When conducting your search, make sure your potential new hires have the necessary education and previous work experience, and are adequately trained to fulfill their roles. Employees must be equipped with the knowledge necessary to perform their jobs efficiently and effectively. You should also hold regular training sessions for your long-term employees to reinforce job expectations, as well as whenever you introduce new products, procedures or responsibilities.
9. Hold a third-party pre-assessment or mock audit of your site.
Once your site is fully built and ready to go, a third-party pre-assessment or mock audit can be very helpful to test the preparedness of your site and employees before the actual audit by Health Canada. In a third-party pre-assessment or mock audit, an external company would come in and evaluate your site to specific standards and provide a formal report listing any deficiencies found during the assessment, and guidance on how to fix them. The purpose of bringing in an external company is to provide an unbiased perspective on your current practices. The ultimate benefit of a third-party audit is for you to gain an understanding of where your team stands in terms of compliance, and to provide the management team (and shareholders) the confidence that a licence can be obtained. We also recommend that internal assessments (self-audits) are conducted on a regular basis for routine maintenance.
10. Work with an expert to submit your application. Thats us!
Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs and much more. Our team is equipped with professionals who have extensive experience in the Cannabis, Pharmaceutical, Natural Health Product, Food and Medical Device industries.
We leverage years of cannabis quality assurance, operational and cultivation knowledge with real-life hands-on experience. Our team has the experience of submitting over 125 cannabis license applications under ACMPR and the Cannabis Act, with No Refusals to date. This speaks to our team’s dedication and due diligence to help our clients succeed. Through trust, transparency and respect, our team will work with you to achieve your goals of getting your cannabis business licensed and legalized.
There you have it – our Top 10 tips on how to successfully obtain your cannabis licence. Contact us today for a free consultation, and let us help you get started on the path to securing your licence!
