What You Need to Know About Medicinal Mushrooms, Psilocybin and Health Canada’s Regulations

DENVER, CO - MAY 19: Mazatec psilocybin mushrooms ready for harvest in their growing tubs May 19, 2019 in Denver, Colorado. (Photo by Joe Amon/MediaNews Group/The Denver Post via Getty Images)

Medicinal mushrooms, otherwise known as “magic mushrooms” is the term that is used to describe mushrooms that contain natural, active ingredients (hallucinogens), such as Psilocybin and Psilocin. In Canada, Psilocybin (chemical name: 3–[2–(dimethylamino)ethyl]–4–phosphoryloxyindole) and Psilocin (chemical name: 3–[2–(dimethylamino)ethyl]–4–hydroxyindole) are controlled under Schedule III of the Controlled Drugs and Substances Act (CDSA). This means that activities such as sale, possession, production, etc. of these substances are prohibited unless authorized under Part J of the Food and Drug Regulations.

Psilocybin is currently being studied for its potential to treat various conditions such as anxiety, depression, obsessive compulsive disorder and problematic drug use. It is important to note that studies involving the use of Psilocybin require administration of the purified active ingredient in clinically supervised settings. As of right now, there are no approved therapeutic products containing Psilocybin in Canada.

To legally possess and conduct activities with controlled substances in Canada, companies and research organizations must first obtain a controlled substances Dealer’s Licence (or a Section 56 exemption for researchers (physicians, veterinarians and other researchers affiliated to universities and private industry) requiring a controlled substance for research purposes which include in vitro utilization, administration to animals and/or human clinical trials). This licence authorizes the company or the organization to possess the controlled substances and to conduct activities specified by the licence (such as production, packaging, sale, sending, transportation, delivery, laboratory analysis, research & development, clinical studies, import/export or distribution under special access program only). Controlled substances can only be imported or exported if the shipment is authorized by a permit issued by Health Canada. Only a holder of a valid controlled substances Dealer’s Licence is eligible to apply for an import/export permit.

All Licensed Dealers are required to have a secure environ for the storage of the controlled substances indicated on their licence. The security level required for the secure environ is determined by the geographical location of the site specified in the licence as well as the type and total quantity of controlled substances to be stored on the premises at any given time. A licence can only be issued after all requirements of the CDSA and its associated regulations are met.

A Dealer’s Licence will only be issued once a complete licence application package has been reviewed by Health Canada’s Office of Controlled Substances (OCS), and an inspection of the facilities has been conducted to ensure compliance with the Directive and the CDSA and its associated regulations. The OCS commits to a service delivery standard of 270 calendar days for the issuance of a decision on an application for a new Dealer’s Licence for controlled substances, from the receipt of a complete application. However, the time period for processing an application is largely dependent upon the submission of complete and accurate information.

Applications for a Dealer’s Licence require submission of the following:

  • Dealer’s Licence application form
  • Corporate documentation
  • Physical Security documents (floor plan, security proposal, security template)
  • Identification of a Senior Person in Charge (SPIC)
  • Identification of a Qualified Person in Charge (QPIC) as well as any alternates (A/QPIC)
  • Documents in support of the QPIC – e.g. copy of degree, curriculum vitae, course transcripts, Canadian equivalency (if applicable)
  • Description of record keeping method
  • Criminal Record Check/Police Check for SPIC, QPIC and any A/QPICs
  • Fee payment (up to $5,288) if applicable, based on the substances to be listed on the licence

We hope this article has shed some light on medicinal mushrooms, psilocybin and the regulation of controlled substances in Canada. If your business is considering securing a Dealer’s Licence to work with a controlled substance, feel free to reach out to us today and let us help you get started on the path to success!

How we can help you

At Cannabis License Experts, we provide you with the guidance to plan your business, acquire funding, navigate the legal requirements, and acquire the appropriate licence for your operations. Cannabis License Experts can help you secure a Dealer’s Licence for sale, possession, production, research, clinical trials etc. involving substances such as psilocybin.

Cannabis License Experts offers support from day one of starting your business, including strategic planning, floor plan preparation, site audits, SOPs and more.

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



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