The delicious road to start your Cannabis Edibles Business

So, you’re thinking about diving into the world of cannabis edibles? Congratulations, you’re about to embark on a journey that combines creativity, culinary finesse, and a touch of regulatory know-how. Before you whip up those mouthwatering THC-infused brownies or CBD gummies, let’s take a friendly stroll through the key regulations and requirements that will help you get your cannabis edibles business off the ground.

Requirements for starting a cannabis edibles business:

The first thing to be aware of is the requirement for a separate building to manufacture edible cannabis products. If you already have a business that manufactures regular, non-cannabis food products (including beverages), then processing cannabis at the same site can only be done if production, packaging, labelling, and storage of cannabis products and production, packaging, and labelling of food products are conducted in separate buildings.

This requirement applies to all classes of cannabis (not just to edible cannabis). This precaution is put in place to help minimize the risks of cross-contamination of Canadian food products with cannabis, as processes will be completely separated and isolated. This includes separate personnel, equipment, production rooms, HVAC and air filtration.

The requirement for separate buildings ensures there are no mix-ups, mislabelling, or confusion among employees. While this requirement is a key strategy to mitigate against the food safety and public health concerns associated with multiproduct manufacturing facilities, it may be burdensome and could pose a barrier for your business if multiple buildings are required at your site. If you are not manufacturing regular, non-cannabis food products, and will solely have an edible cannabis business, then one building at your site will suffice.

What type of edibles license should we consider?

The next step is to consider the type of licence you’ll need to secure. A Processing licence is required to manufacture and package cannabis-based products such as edibles. Currently, Health Canada offers two variations of the Processing licence; 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.

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 Processing licences allow for the sale and distribution of cannabis products to other licence holders, or to provincial and territorial retailers.

Furthermore, if you would like to sell your packaged cannabis products directly to medical patients, you will need a Sale for Medical Purposes licence.

Quality Assurance Person (QAP) and Cannabis Regulations

An important part of securing a Processing licence is retaining the services of one individual to serve as a Quality Assurance Person (QAP) in your organization.

Such a person would need to have the training, experience and technical knowledge related to the requirements of Parts 5 and 6 of the Cannabis Regulations. Your QAP must have previous work experience in a quality control or quality assurance position at a site where regulated products are manufactured.

When screening resumes/CVs, you should look for an individual that has 5-10+ years of experience in these types of positions (head of quality assurance, quality control manager, director of quality, etc.). They should also have familiarity with regulated industries such as food, pharmaceuticals, natural health products or medical devices.

Another important point to consider is that your QAP should have applicable experience which relates to the product classes and activities under your cannabis licence. For example, if you are making edibles, you will need an individual who has experience with Food Safety and Preventive Control Plans.

Why your QAP should have good Preventive Control Plans (PCPs)

Speaking of Preventive Control Plans (PCPs), you’ll want to ensure you have a solid and well drafted plan in place for your edibles business. Under the Cannabis Regulations, anyone who holds a licence for processing (standard or micro) and conducts activities in relation to edible cannabis must prepare, retain, maintain and implement a written Preventive Control Plan for any activity they conduct with the cannabis, or anything that will be used as an ingredient in the production of the edible cannabis.

 A Preventive Control Plan is a written document that demonstrates how hazards to your cannabis product are identified, prevented, eliminated or reduced to an acceptable level. The content of your PCP depends on the activities you conduct at your site, and may include elements relating to packaging, labelling, grading, standards of identity, and food safety.

A PCP will allow you to identify and describe the biological, chemical and physical hazards associated with the cannabis product (edible), document how you intend to control those hazards, provide the information you used to develop your plan, and demonstrate through records that you have implemented your plan. PCPs require expertise in quality assurance. Therefore, your PCP must be reviewed and acknowledged by your Quality Assurance Person (QAP), who oversees the production processes and can monitor the safety of your product(s).

What else will you need for your edibles business?

Starting an edibles business involves careful planning and preparation to ensure success. Here are some key steps and considerations you need to keep in mind:

1. Business Plan:

   • Define your business concept, target market, and unique selling proposition (USP).
   • Conduct market research to understand the demand, competition, and trends in the edibles industry.
   • Outline your business structure (sole proprietorship, LLC, corporation, etc.).
   • Create a detailed financial plan including startup costs, operating expenses, and revenue projections.

2. Legal and Regulatory Compliance:

   • Research and comply with federal, state, and local regulations regarding food production, safety, labeling, and packaging.
   • Obtain the necessary licenses, permits, and certifications to operate legally.

3. Product Development:

   • Develop a variety of appealing and high-quality edible products.
   • Ensure consistency in taste, potency, and dosage.
   • Source high-quality ingredients and establish relationships with suppliers.

4. Kitchen and Production Space:

   • Set up a commercial kitchen or production facility that meets health and safety standards.
   • Purchase necessary equipment for cooking, baking, and packaging.

5. Branding and Packaging:

   • Create a strong and memorable brand identity, including a logo, packaging design, and product labels.
   • Ensure packaging is compliant with regulations and clearly displays necessary information (ingredients, nutritional facts, dosage, etc.).

6. Marketing and Sales:

   • Develop a marketing strategy to promote your products to your target audience.
   • Build an online presence through a website and social media channels.
   • Consider partnerships with dispensaries, retailers, or online platforms.

7. Distribution:

   • Decide on your distribution strategy – will you sell directly to consumers, through retailers, or both?
   • Set up a distribution network or partnerships if needed.

8. Staffing:

   • Hire and train skilled staff, including chefs, kitchen staff, and sales/marketing personnel.
   • Ensure that your team understands food safety and compliance procedures.

9. Financial Management:

   • Establish a solid accounting and record-keeping system.
   • Secure funding for startup costs and initial operations.
   • Monitor your finances closely and adjust your strategy as needed.

10. Quality Control and Testing:

    • Implement rigorous quality control measures to ensure consistent product quality and safety.
    • Test products for potency and ensure they meet legal limits.

11. Insurance:

    • Obtain the necessary business insurance coverage, including liability insurance and product liability insurance.

12. Sustainability:

    • Consider sustainable practices in your operations, such as sourcing eco-friendly packaging and minimizing waste.

Remember that starting an edibles business requires careful planning, dedication, and compliance with various regulations. It’s advisable to consult legal and business professionals who are experienced in the edibles industry to ensure you navigate the complexities successfully.

So there you have it! The items mentioned above are key to running a successful and compliant cannabis edibles business. 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.