Cannabis Processing License

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.

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 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.

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.

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.