How to Sell Medical Cannabis vs. Recreational Cannabis

Under the Cannabis Act and Cannabis Regulations, businesses (small and large) are able to sell cannabis both recreationally and to medical patients in Canada. However, there are different licences required to perform these two different activities. In this article, we’ll discuss the two licences, and what they allow your business to do.

Recreational Cannabis Sales –  the Processing Licence

Under the Cannabis Act and Cannabis Regulations, a processing licence is required to manufacture and package cannabis-based products such as edibles, topicals and extracts. Currently, there are two variations of the processing licence, being standard processing and micro-processing.

The micro-processing licence is generally reserved for smaller manufacturers, as it only permits up to 600 kg of dried flower (or the equivalent) to be handled each year. This option is ideal for businesses that do not intend on expanding their market reach in the near future.

Keep in mind, micro-processors who also have a micro-cultivation licence are permitted to process more than their yearly 600 kg cap, given that they are processing the cannabis cultivated from their own site.

The standard processing licence functions much like the micro-processing licence, but there is no limit on the amount of cannabis product your business can handle each year. You can manufacture, sell, and distribute an unlimited amount of cannabis with this licence.

Both standard and micro-processing licences allow for the sale and distribution of cannabis products to other licence holders, or to provincial and territorial retailers (i.e. recreational cannabis sales).

What Happens After Receiving Your Processing Licence?

Before you can begin selling recreational cannabis, there are two things you need to do after you receive your initial processing licence:

1. Sales Amendment – When a processing licence is issued by Health Canada, it will initially have conditions placed upon it which will limit the activities that may be conducted, such as selling and distributing to provincially and territorially authorized retailers and the sale for medical purposes to medical licence holders. Therefore, the next step will be to apply for an amendment of the licence to get the conditions removed so that your processing business will be authorized to sell cannabis products (such as dried cannabis and/or fresh cannabis, cannabis topicals, cannabis extracts or cannabis edibles) to provincially and territorially authorized retailers and/or holders of a licence for sale for medical purposes. An inspection by Health Canada may also be required before you receive your amended processing licence with said conditions removed.

• Notice of New Cannabis Product (NNCP) – Each time a new product is developed, a notification must be provided to Health Canada at least 60 calendar days before making that new product available for sale (as is required by section 244 of the Cannabis Regulations). Based on the class(es) of cannabis being developed, certain documentation will need to be submitted for the specified number of representative lots/batches of cannabis products (i.e. packaged and labelled for sale to a consumer at the retail level).

This is ultimately how your recreational cannabis products will end up on retail store shelves.

Medical Sales – Sale for Medical Purposes Licence

Those looking to sell packaged cannabis products to medical patients will require a Sale for Medical Purposes license. This licence can be sought with either possession of cannabis or without possession of cannabis.

A Sale for Medical Purposes licence with possession enables your business to store packaged cannabis products on site for sale to medical cannabis patients. Individuals who are authorized by a health care professional can then register with your business to buy cannabis products, which you can ship from your site to the end client.

On the other hand, while a Sale for Medical Purposes licence without possession enables your business to sell medical cannabis to registered medical cannabis clients, the cannabis cannot be physically stored at your site. Rather, when a registered patient places an order with your business, the product will be shipped directly from the licensed producer to your client.

Hopefully the information above has helped to clarify how your business can sell recreational cannabis and medical cannabis.

Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.

How we can help you

At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate licence for your operations. As the Canadian cannabis industry develops, more and more licensed producers will be needed to meet the demands of consumers.

Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plans (PCPs) and more.

Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.