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Under the new Cannabis Act, companies who manufacture cannabis-based products will be required to hold one of two licenses: Micro Processing or Standard Processing. While the first is best for smaller outfits, the latter is ideal for large and growing companies.

With edibles, extracts and topicals cannabis product that will become  legal in Canada on October 17, 2019, it’s very exciting that the Act’s passage will soon give consumers access to all varieties of merchandise derived from the plant. For companies that already work within this field, or those interested in breaking into it, there is one major distinction to keep in mind while applying for a Processing License: quantity. Whereas a Standard Processing License puts no limit on how much cannabis the holder can process, a Micro Processing License only allows for the handling of up to 600 kg of dried flower (or the equivalent) per year. While the second option may seem limiting to some, it is great for businesses that plan to stay on the smaller side.

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License Overview

Who is a Processing License for?

This license is ideal for anyone who desires to work with cannabis and its derivatives, such as oil, wax, hash, butter, and other extracts. The Cannabis Act and Regulations have undoubtedly opened up a lot of possibilities for established businesses – such as those in the food and beverage, wellness, and personal care sectors – to expand into the legal cannabis market. A Processing License would allow for exactly that, with large companies requiring the Standard, and smaller outfits better suited to the Micro version. Micro Cultivation License holders might also consider growing their operations by applying for a Micro Processing License.

What can you do with a Processing License?

Standard Processing License holders are permitted to possess an unlimited quantity of cannabis, and produce it by any means other than propagating, cultivating, or harvesting. A Micro Processing License allows for the handling of up to 600 kg dried flower annually, with the same rules for cannabis production as a Standard License and the addition of synthesis being unauthorized. Both licenses give permission for the sale and distribution of cannabis (dried, fresh, plants and seeds) to those who hold a Processing, Analytical Testing, Research, or Cannabis Drug License, as well as Micro and Standard Cultivators. They also allow for the sale of cannabis plants and seeds to licensed nurseries, the delivery of cannabis products to license holders that sell cannabis for medical purposes, and delivery to those authorized to sell cannabis under a provincial or territorial Act.

What isn’t covered under a Processing License?

Both Standard and Micro Processing Licenses permit the holder grow, retain, sell and distribute cannabis – but only within the guidelines that the license’s terms provide for (given above). These licenses do not authorize the holder to give the general public any kind of access to the cannabis, or cannabis materials, that they work with, and the cultivation of cannabis is not allowed.

Cannabis Processing License Requirements

  1. The license holder needs to have an individual in their employment who can act as their “responsible person”. This person is considered accountable for the license holder’s actions and should have an adequate understanding of how the Cannabis Act and Regulations apply to the holder. Should they have to, this person also has the authority to bind the license holder. They are required to have a security clearance.
  2. Personnel must include a Head of Security who is responsible for ensuring that physical security measures comply with part 4 of the Cannabis Regulations, as well as the enactment of an organizational security plan. One qualified alternate may be designated, and both must have a security clearance.
  3. Processing licenses require that holders employ a Quality Assurance Person. This person is required to have good experience and knowledge regarding proper production practices as laid out by the Regulations, and is responsible for assuring the quality of cannabis ready for sale, as well as for investigating and responding to any complaints made about the quality of the cannabis. Two alternates may be designated, but they must be identified and approved in advance by Health Canada. All are required to have security clearances.
  4. The holder’s facility must have any on-site storage and operations areas surrounded by a physical barrier in order to safeguard against unauthorized access. It should be possible to demonstrate how the barrier’s construction, as well as the required access controls on the exit and entry points, are able to achieve this goal. Access to all storage areas must be restricted to authorized personnel only.

Additional Standard Processing Requirements

  1. Access controls are required around operations areas, and a record must be made of everyone who comes and goes from storage areas.
  2. The site perimeter, operations areas, and storage areas are required to be monitored by visual recording devices at all times to detect and record any unauthorized attempts, successful or unsuccessful, to access the site. Entry and exit points on grow areas must be visually monitored as well.
  3. The site perimeter, operations areas, and storage areas must have an intrusion detection system operating 24/7 to discover any unauthorized attempts to access the site or tamper with the system. It must also be possible to detect unauthorized movement within operations and storage areas.
  4. The intrusion detection system is required to be monitored at all times, and the license holder is responsible for determining what measures are appropriate in response to any incidents. In cases of an incident, the holder must retain a document that contains the date and time of the occurrence, how it was responded to, and the date and time of when that response took place.

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