Before you start applying for a cannabis licence: Cultivation, processing and sale for medical purposes licence

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This page provides the information you should consider before applying for a licence.

1.0 Determine your licence type

You should determine which cannabis licences you want to apply for before continuing. You should base your choice of licence on what you want to do with cannabis and how you want to sell cannabis. Your licence type will determine the information you'll have to submit during the licence application process.

There are certain combinations of licences that aren't permitted at the same site.

2.0 Familiarize yourself with the legislation

Familiarize yourself with the legislation listed below to see how they apply to your application.

Important: Learn the definitions in subsection 2(1) of the Cannabis Act and subsection 1(1) of the Cannabis Regulations. They'll be used in these pages as well as all other documents for cannabis licence holders.

Depending on your licence type, you will need to apply for a cannabis licence from the Canada Revenue Agency (CRA). You should submit the CRA licence application at the same time as Health Canada's cannabis licence application. For general questions, email cannabis@cra-arc.gc.ca.

These laws could also apply to you:

3.0 Self-identify as an Indigenous affiliated applicant

Indigenous affiliation can include:

Self-identification is optional.

Health Canada offers the Indigenous Navigator Service to guide Indigenous affiliated applicants through the licensing process, and once they've become a licence holder.

Indigenous affiliated applicants are able to ask for a 2-stage review that lets you start applying without a fully built site. In this case, Health Canada will review your licence application on 2 separate occasions. The first in-depth review happens before your site is fully built. When this review is finished, we'll send you a notification and a request to submit your site evidence package. You'll need to send your site evidence package after building your site. Your application will then undergo a second in-depth review.

There is a section to identify your application as Indigenous affiliated in the Cannabis Tracking and Licensing System (CTLS). Once this section is filled out in the CTLS, you'll be able to choose a review process. The Navigator service will reach out to you for an introductory teleconference after you've submitted your licence application.

If you'd like help before submitting your licence application, or if you have any questions about applying as an Indigenous affiliated applicant, email navigator-navigateur@hc-sc.gc.ca.

4.0 Know your fees

You'll have to pay a licence application-screening fee for each new application. The fees for micro-cultivation, nursery and micro-processing licences are lower than the fees for other types of licence.

You'll also have to pay security clearance application fees for each security clearance application. The fees are non-refundable and payment doesn't guarantee that a licence will be issued, or that the security clearances will be granted.

Once you become a licence holder, you'll also need to pay an annual regulatory fee for each site. A sale for medical purposes licence holder is exempt from the annual regulatory fee if they only sell cannabis to registered medical patients during that year.

For information about your fees, refer to the Cannabis fees order guide.

5.0 Send notices to local authorities

Important: If you're only applying for a sale for medical purposes without possession of cannabis licence, this section doesn't apply to you.

Send a written notice to the senior official of the local authorities of the area of your proposed site. Your responsible person needs to sign the notices.

Mayor, chief of police, chief of the fire department are examples of senior officials.

You may use the Notices to local authorities template. The notice needs to contain:

Collect the contact information from each of the local authorities:

You'll need to submit a copy of these notices and additional information about each of the authorities you contacted in the licence application process.

6.0 Prepare your site

You need to show that your site is fully built and meets all the requirements when you submit your licence application. This includes submitting a site evidence package with your licence application showing you have an operational and functional site. This doesn't apply to Indigenous affiliated applicants requesting a 2-stage review.

Use the Physical security measures guide for cannabis and the Good production practices guide for cannabis. They'll have examples of principles and practices that you can use to show compliance with those requirements for your fully built site.

Important: Before preparing your site, you should check to see if your municipality's by-laws allow you to operate a site for doing cannabis-related activities. You're also responsible for complying with all the applicable laws:

  • provincial or territorial laws (such as environmental laws)
  • municipal or local government laws, by-laws, policies (such as zoning and building permits, electrical and fire safety, nuisance control for odour, noise and light)

6.1 Costs

6.1.1 Business supports

If you are looking for financial support for your cannabis operations, you can use the Business Benefits Finder. It brings together business supports from all levels of government. By answering a few questions, you'll get a list of the supports that fit your needs. This can include:

6.1.2 Start-up costs

Start-up costs for a licensed site will vary depending on your specific business model and infrastructure. Health Canada gives you the cannabis licence requirements, but won't give any advice about your business model or infrastructure beyond this.

You can get a licence for a modest-sized site and scale up later. You can do this by including only a portion of your building on your initial licence application, and add new operations areas, including grow areas, storage areas or new buildings to your licensed site later. Areas not included on your initial licence application don't have to meet the physical security requirements and good production practices requirements. However, you can only do activities with cannabis in areas authorized on your licence.

For example, your initial licence can have the outside walls of your building as your site perimeter, but there can be areas inside that aren't on your licence. You can also define a fence as your site perimeter, with buildings inside that aren't on your licence.

When you'd like to scale up and include these areas on your licence, you'll have to make sure they meet the physical security requirements and good production practices. You may also need to change your site perimeter to include these new areas. The submission and approval requirements vary depending on the type of change. You'll need to notify Health Canada of some types of site plan changes or get approval for others. For more information, refer to Manage your cannabis licence.

Micro-cultivation, nursery and micro-processing licence holders are also able to scale up their operations as long as the applicable limits aren't exceeded. For more information, refer to Micro-cultivation, nursery and micro-processing licences.

6.2 Site details

The following section describes the things you should consider when preparing your site details for your proposed site.

A site is defined as an area that's used exclusively by the licence holder that consists of at least 1 building or 1 part of a building.

6.2.1 Site perimeter

You need to define the site perimeter for your site. Only the licence holder can do activities on the site. If someone other than the licence holder uses any areas, rooms or buildings, they need to be outside of the proposed site perimeter.

6.2.2 Licences are site specific

If you're planning to do licensed activities at more than 1 site, submit a separate licence application for each site.

6.2.3 Multiple licence holders at 1 location

There isn't a limit to the number of licence holders on a single piece of land or in a building. More than 1 licence holder is allowed if each licence holder is within a separate site or defined site perimeter. If you have multiple licence holders at 1 location, you'll need to have a way to keep the activities separated between each site. For example, you'll need to:

If there are multiple licence holders at 1 location, Health Canada will assess the risks associated with the increased amount of cannabis at the location. This can happen during the application process or after licensing, based on your current or future proximity to other licence holders. If the co-location of licences increases risks, we may add or revise conditions on your licence, or require more physical security measures for the site.

There may also be local municipal by-laws that limit the number of licensed sites within their jurisdiction.

Figure 1 shows how 3 separate licence holders are located in 1 building. Each licence holder has their own site perimeter that does not overlap with the other licence holders.

Figure 1: Multiple licence holders at 1 location
Figure 1. Text version below.
Figure 1 - Text version

The building has 3 separate spaces for each licence holder inside. Each licence holder has a defined site perimeter within the building that does not overlap with each other.

6.2.4 Personal or designated production of cannabis for medical purposes

Commercial activities with cannabis and personal or designated production are allowed to take place at the same civic address, but in most cases personal or designated production cannot take place within the commercial licence holder's site perimeter. This is because in most cases, the commercial licence holder (typically an organization) is not the same person as the holder of the personal or registration certificate or the designated person named in the registration certificate.

Figure 2 shows how personal or designated production activities can be on the same land or building as the commercial licence holder, but only when these activities take place outside the commercial licence holder's site perimeter.

Figure 2: Different holders between the commercial cannabis licence and the personal or designated production
Figure 2. Text version below.
Figure 2 - Text version

An indoor building has 2 separate sections inside. One section is for the licence holder, while the other is the personal or designated grow area. There is a separate building that has a personal or designated grow area inside. The 2 personal or designated grow areas are outside of the commercial licence holder's site perimeter.

In rare circumstances, if the licence holder (as an individual) is the same person as the holder of the personal registration certificate or is a designated person named in the registration certificate, it may be possible to do both activities within the licence holder's site perimeter. To do this, you need to:

6.2.5 Dwelling (residence)

You're allowed to have a dwelling (residence) on the same property as your site. In most cases, dwellings are located outside the site perimeter. If your dwelling (residence) is within your licensed site, you can only do cannabis related activities within your site perimeter. You can't have any cannabis related activities happening in your dwelling (residence), including sale.

6.2.6 For cultivation licences with only outdoor grow areas

You need to have at least 1 indoor area for doing sales activities with cannabis. This indoor area needs to be defined as 1 of 2 options:

6.2.7 Storage areas and cannabis waste destruction

Important: If you're applying for a sale for medical purposes without possession of cannabis licence, this section doesn't apply to you.

6.2.7.1 Storage areas

You should have enough storage areas to handle your intended activities and amount of cannabis that will be at the site (except grow areas). You'll need to have storage for:

You should consider the following factors when deciding how much storage space you'll need, for example:

If you plan to only grow cannabis outdoors and not have a storage area, you'll need to plan for the cannabis to be transported immediately after it's harvested.

The following items aren't considered cannabis and don't need to be stored in the storage area:

Cannabis waste is still considered cannabis. This includes cannabis buds, leaves and branches collected from cultivating, propagating or harvesting activities. If you're not destroying cannabis waste on the same day as it's produced, you'll have to store it in a storage area overnight. You'll need to prevent it from contaminating other cannabis and ingredients stored in the same storage area at the same time. The Good production practices guide for cannabis shows how to meet good production practices requirements for storage.

6.2.7.2 Cannabis waste destruction

You're not required to use a specific disposal method for cannabis. Your destruction method will have to meet subsection 43(1) of the Cannabis Regulations. This includes making sure people won't be exposed to cannabis smoke or vapour during destruction. An acceptable method can be shredding cannabis and mixing it with organic waste or soil before disposal. The destruction can be performed on site or at another location.

You need to destroy cannabis in the presence of at least 2 qualified people. At least 1 witness needs to hold a security clearance, and the other needs to be an employee of the licence holder.

Licence holders with limited employees at their site can meet the requirement by:

6.3 Good production practices

This section provides some good production practices (GPP) for cultivation, processing, and sale for medical purposes with possession of cannabis licences. For more information on the GPP requirements, refer to the Good production practices guide for cannabis.

Note: Good production practices requirements are not the same manufacturing standard as Good Manufacturing Practices (GMP) under the Food and Drug Regulations. GMP are for manufacturing products of pharmaceutical grade quality and have different requirements.

6.3.1 Construction material for your building

There are no specific materials required for the walls of operations areas, including grow areas, and storage areas. You can use any material as long as you can show that they comply with GPP, and it doesn't affect the quality of the cannabis. For example, the walls need to be smooth with no cracks or holes, and allow for proper cleaning.

Construction materials may include painted or sealed drywall (such as gypsum board, gyprock, sheetrock), polyvinyl chloride (PVC) wall panels, and painted or sealed concrete.

Untreated or exposed wood and drywall doesn't meet GPP. You should seal materials such as wood, drywall, cement block and other porous materials. However, drywall sealed with paint can meet the GPP if it's smooth and washable.

6.3.2 For processing licences: Incompatible activities

If you're producing, packaging or labelling food products at your licensed site, you should make sure your licensed cannabis activities aren't in the same building. For example, if you're processing coffee beans at your site, you should do it in another building that doesn't have any cannabis activities.

6.3.3 For processing licences: Potable water

Any water, steam or ice that comes in contact with cannabis extracts, edibles and topicals, or any of its ingredients, needs to be potable water. If you can't use a potable water source, you have to make sure the water isn't a contamination risk. You can do this by testing water samples at a pre-determined frequency to show that they meet the potable water standards. For more examples on how you can show compliance, refer to the Good production practices guide for cannabis.

6.4 Physical security

This section provides some considerations related to the physical security requirements for cultivation, processing, and sale for medical purposes with possession of cannabis licences. For more information on the physical security requirements, refer to the Physical security measures guide for cannabis.

6.4.1 Physical security requirements for licences

The physical security requirements are different between some licences. You'll need to show how your site meets these requirements when you're submitting information later in the licence application process.

Important: If you're applying for a micro-cultivation, nursery or micro-processing licence together with:

  • a sale for medical purposes with possession of cannabis licence, you need to meet the physical security requirements for both licences, and will have to submit your physical security information in your site evidence package to show this
  • a sale for medical purposes without possession of cannabis licence, you don't need to meet the extra physical security measures

The following table shows the physical security requirements for the different licences.

Table 1: Physical security requirements comparison between licences
  Micro-cultivation, nursery and micro-processing licences Standard cultivation, standard processing, sale for medical purposes with possession of cannabis licences
Site perimeter and physical barrier
  • Perimeter designed to prevent unauthorized access
Required Required
  • Visual monitoring devices
  • Intrusion detection system
Not required Required
Storage areas
  • Physical barrier to prevent unauthorized access
  • Access restricted to only people whose presence is required
Required Required
  • Record of every person entering or exiting the storage area
  • Visual monitoring devices
  • Intrusion detection system
Not required Required
Areas where storage areas are located in
  • Physical barrier to prevent unauthorized access
  • Access restricted to only people whose presence is required
  • Visual monitoring devices
  • Intrusion detection system
Not required Required
Operations areas
  • Physical barrier to prevent unauthorized access
  • Access restricted to only people whose presence is required
  • Visual monitoring devices
  • Intrusion detection system
Not required Required

7.0 Identify people

There are specific people to identify in the CTLS during the application process. This may include the following roles:

Refer to the linked sections for details on these roles and their responsibilities.

Important: Health Canada can only issue a licence after granting all linked security clearances. People who need a security clearance should submit their application no more than 1 month before you submit your licence application. Identified people should avoid submitting their security application too far in advance, as it can become outdated and cause delays in processing.

Important: For all licences for cultivation, processing and sale for medical purposes with possession of cannabis: A person who holds a security clearance needs to be present at the site when other people are in an operations area (including indoor and outdoor grow areas) or a storage area.

7.1 Key site personnel

The key site personnel required depends on the type of licence. The people identified for the specific roles need to be qualified to meet all the regulatory responsibilities. Each person needs to create an account in the CTLS and will need to apply for a security clearance, if they don't have one already. You can identify alternates, but they also need to have a CTLS account and apply for a security clearance, if they don't have one already.

Note: Someone can hold, at the same time, 1 or more roles, for 1 or more licences, at 1 or more sites. In this case, the employee can use the same CTLS account and the same security clearance application.
You'll need to make sure they can fulfill their duties by considering:

  • their hours of work at each site
  • if they're in a primary or an alternate role
  • if they're working at more than 1 site, the distance between sites
  • if they're working at more than 1 site, how they can do the work at all sites

The responsibilities of the key site personnel include, but aren't limited to the following.

7.1.1 Responsible person: Required for all licences

Applicant or licence holder can designate 1 qualified alternate.

7.1.2 Head of security: Required for all licences

Applicant or licence holder can designate 1 qualified alternate.

7.1.3 Master grower: Required for micro-cultivation, nursery and standard cultivation licences

Applicant or licence holder can designate 1 qualified alternate.

7.1.4 Quality assurance person (QAP): Required for micro-processing and standard processing licences

Applicant or licence holder can designate up to 2 qualified alternates.

Important: If you designate alternates, only 1 person can act in the role at any given time. For example, your first and second alternate can't be acting as QAP at the same time. Refer to the section 5.2 of the Good production practices guide for cannabis for more information about assigning quality assurance duties to another person.

7.2 People with direct control

People with direct control are in a position to directly influence, or have say in, the company's management and operations. Each person needs to create an account in the CTLS and will need to apply for a security clearance, if they don't have one already.

Important: Anyone with direct control that doesn't fall into the categories below will need to be identified as an associated individual requiring a security clearance.

You need to follow the information below to identify people with direct control when you prepare your application information.

The people with direct control listed above will need to be added to:

7.3 Associated individuals

There may be other people with direct control over the applicant or the licence holder. They'll need to be identified as associated individuals (people requiring security clearances). You may also choose to identify other associated individuals in the CTLS during the licence application process. These roles are optional. Each person added needs to create an account in the CTLS and may need to apply for a security clearance, if applicable.

The responsibilities of the associated individuals are described below.

7.3.1 Consent to communicate

7.3.2 Reporter

7.3.3 Responsible for finance

7.3.4 Associated individuals requiring security clearance

You'll need to identify additional people as associated individuals requiring security clearances. This includes anyone with direct control over the applicant or the licence holder, but who aren't:

For example, these people may be:

They need a security clearance.

7.4 Key investors

To determine if you need to report on your key investors, you need to determine if your equities securities are listed on a published market. A published market is a market inside or outside Canada where equity securities are traded, if the prices of those securities are regularly published. Most cannabis businesses don't have equity securities listed on a published market, and will need to report on their key investors.

Not listed on a published market

Listed on a published market

Important: Key investors with direct control need to create an account in the CTLS and will need to apply for a security clearance, if they don’t have one already.

For more information on key investors, record keeping and reporting, refer to Cannabis key investors.

8.0 For micro-cultivation, nursery and micro-processing licences: Limits

Micro-cultivation, nursery and micro-processing licence holders have to consider limits on their authorized activities. This includes grow surface area limits and possession of cannabis limit. You'll have to show how you'll meet these requirements during your licence application.

Refer to Micro-cultivation, nursery and micro-processing licences for more information about:

9.0 Prepare your information

This section will describe the information you need to prepare for your licence application. Depending on the cannabis licences you're applying for, you'll need to prepare different information.

Refer to Prepare your information: cultivation, processing and sale for medical purposes with possession for:

Refer to the Prepare your information: Sale for medical purposes without possession of cannabis licences for:

10.0 Template

You may use the Notices to local authorities template in completing your licence application.

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