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Cannabis Processing License

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Those looking to conduct finished product packaging of dried flower or manufacture and package cannabis-based products (e.g. edibles, extracts, topicals) are required to hold a Processing license. Currently under the Cannabis Regulations, there are two variations of the Processing licence; Standard Processing and Micro-Processing.

Variations of the Processing License

The Micro-Processing Licence

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 the 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

Prerequisites For License

Regardless of which licence you choose, Standard or Micro-Processing, a prerequisite to being licensed is that a production-ready facility must be built prior to submitting a licence application to Health Canada. This requirement was announced in May 2019 and replaced the former two-step review process, which included an extensive assessment of a paper application with feedback from Health Canada, followed by submission of a site evidence package for review. The site evidence package used to be one of the final steps in proving a facility was operationally ready – but now, it is one of the first.

Deciding Between Standard Processing and Micro-Processing

When deciding between Standard Processing and Micro-Processing, it’s also important to consider the future of your cannabis business. If you know there is potential for growth and expansion, it may be wise to secure a Standard Processing Licence and proceed with operations in a phased approach, rather than pursuing a Micro-Processing licence and then having to upgrade later to a Standard Processing licence.

Expanding in a phased manner could definitely save some time and effort in the future, because the amendment that will need to be submitted to Health Canada will be a simpler application than changing licence subclasses.

License Overview

Who is A Processing License For?

  • A Processing license is ideal for anyone looking to work with cannabis and its derivatives, such as oil, wax, hash, butter, and other extracts.
  • The Cannabis Act and Regulations have opened up many possibilities for established businesses – such as those in the food and beverage, wellness, and personal care sectors – to expand into the legal cannabis market, as the production of edible cannabis and topical cannabis products is now legal.
  • A Processing License would allow for exactly that, with large companies requiring the Standard Processing license, and smaller outfits better suited to the Micro-Processing license.
  • Micro-Cultivation License holders might also consider growing their operations by applying for a Micro-Processing License, to be able to conduct finished product packaging of their dried flower and expand into the edibles, extracts and topicals industry.

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 (or the equivalent) annually, with the same rules for cannabis production as a Standard Processing License.

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 to produce, retain, sell and distribute cannabis – but only within the guidelines that the license’s terms provide for (described 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. Furthermore, cultivation is not permitted with a Processing licence. For that, you would require a Cultivation (Standard, Micro, Nursery) license.

    Cannabis Processing License Requirements

    • The holder of a Processing license must hold a security clearance. In addition, key personnel required under the Processing license (e.g. Responsible Person, Head of Security, Quality Assurance Person), as well as any directors, officers and key investors, are also required to hold a security clearance.
    • The license holder must retain the services of one individual as the Responsible Person, who has the authority to bind the holder. The Responsible Person will be accountable for the license holder’s activities and should have an adequate understanding of how the Cannabis Act and Regulations apply to the licence holder. They are also required to hold a security clearance. The license holder may designate one qualified alternate Responsible Person (who is also required to hold a security clearance).
    • The license holder must retain the services of one individual as the Head of Security who is responsible for ensuring that the applicable physical security measures set out in Part 4 of the Cannabis Regulations are complied with and that implements the organizational security plan of the licence holder. One qualified alternate Head of Security may be designated. The Head of Security, and any alternate, must hold a security clearance.
    • Processing license holders are required to retain the services of one individual as a Quality Assurance Person (QAP) who has the training, experience and technical knowledge related to the requirements of Part 5 (Good Production Practices) and Part 6 of the Cannabis Regulations. The QAP is responsible for assuring the quality of the cannabis product before it is made available for sale, and investigating every complaint received in respect of the quality of the cannabis, as well as taking any necessary corrective and preventative measures. The QAP is also responsible for the implementation and maintenance of the overall Quality Management System (QMS). The license holder is permitted to designate 2 alternates, but they must be identified and approved in advance by Health Canada. The QAP and any alternates are required to hold a security clearance.
    • The license 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.

    Cannabis Processing License Requirements

    • The holder of a Processing license must hold a security clearance. In addition, key personnel required under the Processing license (e.g. Responsible Person, Head of Security, Quality Assurance Person), as well as any directors, officers and key investors, are also required to hold a security clearance.
    • The license holder must retain the services of one individual as the Responsible Person, who has the authority to bind the holder. The Responsible Person will be accountable for the license holder’s activities and should have an adequate understanding of how the Cannabis Act and Regulations apply to the licence holder. They are also required to hold a security clearance. The license holder may designate one qualified alternate Responsible Person (who is also required to hold a security clearance).
    • The license holder must retain the services of one individual as the Head of Security who is responsible for ensuring that the applicable physical security measures set out in Part 4 of the Cannabis Regulations are complied with and that implements the organizational security plan of the licence holder. One qualified alternate Head of Security may be designated. The Head of Security, and any alternate, must hold a security clearance.
    • Processing license holders are required to retain the services of one individual as a Quality Assurance Person (QAP) who has the training, experience and technical knowledge related to the requirements of Part 5 (Good Production Practices) and Part 6 of the Cannabis Regulations. The QAP is responsible for assuring the quality of the cannabis product before it is made available for sale, and investigating every complaint received in respect of the quality of the cannabis, as well as taking any necessary corrective and preventative measures. The QAP is also responsible for the implementation and maintenance of the overall Quality Management System (QMS). The license holder is permitted to designate 2 alternates, but they must be identified and approved in advance by Health Canada. The QAP and any alternates are required to hold a security clearance.
    • The license 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

    • Access controls are required around operations areas, and a record must be made of everyone who exits and enters from storage areas.
    • 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.
    • 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.
    • 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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