Inspections - What to Expect - Information Package

For Licensed Producers and Licensed Producer Applicants of Cannabis for Medical Purposes

The purpose of this information package is to increase awareness regarding the laws and regulations pertaining to cannabis for medical purposes and to assist licensed producers and applicants preparing for an inspection by Health Canada.

Inspections are conducted to assess and monitor compliance with the Access to Cannabis for Medical Purposes Regulations (ACMPR), as well as Controlled Drugs and Substances Act (CDSA) regulation and the Food and Drugs Act (FDA), as they apply to cannabis for medical purposes.

Health Canada recognizes that safety and quality standards can only be achieved through the involvement of government, industry, health care practitioners, and clients. Health Canada is committed to providing licensed producers with information and guidance, in order to assist them in meeting the requirements of the ACMPR, and to ensure that cannabis for medical purposes is handled effectively and remains within legal distribution channels.

This package contains the following:

• a fact sheet entitled Inspections of Licensed Producers outlining the mandate and the activities of Health Canada, including inspections;
• Frequently Asked Questions about inspections;
• an inspection checklist for licensed producers; and
• an opportunity to tell us what you think about the information package.

In addition, we recommend that you review Health Canada's guidance and policy documents regarding cannabis for medical purposes.

Licensed producers who have questions may contact Health Canada toll-free at 1-866-337-7705, or by email at CMC@hc-sc.gc.ca.

Inspections of Licensed Producers

The Office of Medical Cannabis within the Cannabis Legalization and Regulation Branch of Health Canada

The Office of Medical Cannabis (OMC) ensures that cannabis for medical purposes is produced, sold, and distributed in accordance with the ACMPR. This involves developing regulations and policies, as well as implementing operational programs that support access to and the control of cannabis for medical purposes.

The Controlled Substances Program within the Regulatory Operations and Regions Branch of Health Canada

The regional Controlled Substances Program (CSP) is the compliance and enforcement arm of the OMC; the CSP conducts compliance and monitoring activities to enforce the CDSA, and the ACMPR.

This inspection program is also responsible for proactively assessing and monitoring the compliance of licensed producers under the ACMPR. Inspectors verify that all applicable laws are being respected by licensed producers. It is important that licensed producers read and understand all relevant legislation, and it is their responsibility to fulfill their obligations.

An inspector may, at any reasonable time and with the assistance of the licensed producer, inspect a site to verify compliance with the FDA and the regulations to the CDSA, including the ACMPR. Inspectors also conduct on-site inspections to confirm the information submitted in support of an application for a licence, amendment, or renewal of a licence.

Frequently Asked Questions - Cannabis for Medical Purposes Inspections

1. Why are licensed producers being inspected?

As members of a regulated industry, all licensed producers are subject to inspections by Health Canada to verify compliance with the Controlled Drugs and Substances Act (CDSA) and its regulations, as well as the Food and Drugs Act (FDA) and its regulations. Health Canada can inspect the operations of a licensed producer at any reasonable time to confirm that the applicable legislative and regulatory requirements are being met.

2. Are inspections part of the licensing application process?

Yes. Health Canada will continue to inspect all facilities as cultivation begins and before a licence to sell products to the public is issued. Health Canada will schedule this first inspection after it has determined an application meets the regulatory requirements and it has issued the licence to cultivate and once the producer is ready to initiate production in its facility. This approach will help provide successful applicants with a decision on their application as soon as possible while ensuring that all facilities are inspected as cultivation begins.

3. Do inspections occur for all licensed producers?

Yes, all licensed producers are inspected. Once licensed, a producer's site(s) is subject to compliance and enforcement measures including regular inspections by Health Canada. Inspectors will assess compliance with the ACMPR, the CDSA and its regulations, and the FDA by conducting unannounced on-site inspections, and other compliance and enforcement measures.

4. What can be expected during inspections?

The following list provides examples of areas an inspector may focus on during an inspection. It should be noted that this list is not exhaustive, and is not presented in any order of priority. For further information, please visit the Compliance and Enforcement web page.

An inspection may include:

• verification of the physical security requirements for the site;
• confirmation that the activities being conducted by the licensed producer correspond to those indicated on the licensed producer's licence;
• verification of the site's coordinates, and identification of key personnel;
• identification of the legal source from which the licensed producer obtains their starting materials;
• demonstration of safekeeping of substances during transportation;
• verification of compliance with the ACMPR in setting a maximum quantity of dried marijuana sold to registered clients;
• confirmation that standard operating procedures (SOPs) as required by the ACMPR have been established;
• verification that the licensed producer is meeting the requirements of Good Production Practices (GPP), including use of pest control products;
• verification of destruction procedures (on-site, off-site);
• verification of record keeping procedures; and
• verification of reporting methods for loss or theft, adverse reactions, dried marijuana and cannabis oil recalls, and changes of key personnel.

5. Are there different types of inspections?

Yes, there are four types of inspections:

• Introductory Inspection: Conducted to verify that the licensed producer is meeting the requirements of the ACMPR including, but not limited to, the physical security requirements for the site, record-keeping practices and Good Production Practices (GPP) and to confirm that the activities being conducted by the licensed producer correspond to those indicated on their licence. Please note that a targeted inspection may take place at any time.
• Pre-Sales Inspection: Conducted prior to the issuance of a sales licence to verify that the licensed producer is meeting the requirements of the ACMPR including, but not limited to, GPP, packaging, labelling, shipping, and record keeping prior to the issuance of a licence for the activity of sale or provision. Please note that a targeted inspection may take place at any time.
• Targeted inspection: Conducted to verify compliance with particular areas of the ACMPR.
• Annual inspection: Conducted to monitor and verify compliance with all the requirements of the ACMPR, CDSA and FDA.

Licensed producers are reminded to renew their licence a minimum of three months before the licence is set to expire. A licensed producer cannot conduct activities involving cannabis without a valid licence.

6. What type of client information will an inspector review?

It is important for licensed producers to keep accurate information on any individual submitting a registration application. The registration process established by a licensed producer may be reviewed during an inspection.

For example, if a client is registered by a licensed producer, and the healthcare practitioner who signed the medical document has subsequently lost cannabis prescribing privileges, in accordance with paragraph 139(1)(e) of the ACMPR, all orders must be cancelled from the day that the licensed producer receives the notification from Health Canada. The licensed producer may not continue to ship dried or fresh marijuana and cannabis oil to any clients who submitted a medical document signed by the healthcare practitioner. The client must find a new healthcare practitioner, and initiate a new registration process by submitting a new medical document. Only when the new registration is accepted, will the licensed producer be allowed to sell or provide dried or fresh marijuana and cannabis oil to the client. During an inspection, this process will be assessed to ensure that the licensed producer is meeting the requirements of the ACMPR.

7. Are shipping records reviewed during an inspection?

Yes. Licensed producers are required to comply with section 93 - shipping and section 146 - thirty-day limit provisions of the ACMPR. During an inspection, the inspector may verify that all shipments comply with the following criteria:

• No individual shipment may exceed the equivalent of 150 grams of dried marijuana (or the equivalent for fresh marijuana or cannabis oil); and
• The maximum quantity of dried or fresh marijuana or cannabis oil that licensed producers may ship to a client in a 30-day period must not exceed the equivalent of 30 times the daily quantity of dried marijuana (expressed in grams) specified in the client's medical document.

Licensed producers may ship more frequently than once a month as long as each shipment is not more than 150 grams and the total amount shipped within a 30-day period is not more than 30 times the daily quantity specified in the client's medical document (or the equivalent in products).

8. What records may be reviewed during an inspection?

As per Division 5 of the ACMPR, sections 152-171, licensed producers are required to retain records, documents, and information in a manner that will enable an inspector to confirm and verify the information contained in the documents. The records must be available at the site prior to the completion of the inspection.

Examples of records that must be kept include:

• notices to Authorities and Health Canada (licence and security clearance);
• security measures: visual recordings and other security-related records;
• Good Production Practices records: production, packaging and labelling, sanitation program, Standard Operating Procedure (SOPs), list of all brands produced;
• Quality Assurance (QA): qualifications of QA person, complaints and actions taken, testing results;
• production records for each batch of marijuana propagated, sowed, harvested or dried, the date on which each activity took place, and the total net weight of the substance;
• production records for each batch of cannabis oil produced, the date on which the activity took place, and the total net weight of the substance;
• destruction records: date of destruction, name of the substance, net weight, location, destruction method, names and qualifications of the witnesses with signed statements and the name of the person who accompanied the cannabis;
• quarterly inventory records of the net weight of: seeds, harvested marijuana for which the drying process has and has not been completed, marijuana that is destined for destruction, packaged marijuana, and cannabis other than marijuana (name and weight for each substance);
• recall and adverse reactions: control system, case reports, information required to be submitted to Health Canada and annual reports;
• registration: application, amendment refusal and cancellation (documents sent and received), healthcare practitioner verification, client's unique identifier (manner and date it was communicated, copies); and
• processing records, verbal orders, transaction records (name, address, date, indication and brand name), and returns.

Most records required under the ACMPR must be kept for a period of two years after the date the record was created. Other records, such as serious adverse reaction case reports must be kept for a period of 25 years after the day the records were created. Licensed producers should refer to sections 78 and 169(3) of the ACMPR for information regarding adverse reaction reporting.

9. Is inventory inspected?

Yes. Licensed producers are responsible for maintaining an accurate inventory count (plants, dried and fresh marijuana, seeds and cannabis oil), and as per section 166 of the ACMPR, must retain a quarterly inventory report. During an inspection, a physical inventory count may be obtained, and any inconsistencies will be reviewed. Pursuant to section 29 of the ACMPR, the licensed producer must report any theft of cannabis, any unusual waste, or disappearance of cannabis that cannot be explained on the basis of normally accepted business activities as follows:

• report the occurrence to a member of a police force within 24 hours after becoming aware of the loss or theft; and
• submit a written report to Health Canada within 10 days after becoming aware of the occurrence.

For a copy of the loss or theft report form, please visit Controlled Substances & Precursor Chemicals - Loss, Theft and Forgery.

The report should be sent by email to the address below:

National Compliance and Enforcement Section
Office of Medical Cannabis
Health Canada Address Locator: 0300A
Ottawa, ON K1A 0K9
Email: CMC@hc-sc.gc.ca

Additionally, licensed producers have reporting requirements under the ACMPR. Further information can be found under the Licensed Producers' Reporting Requirements.

10. Will complaints received regarding dried or fresh marijuana or cannabis oil be reviewed during inspection?

Complaints received by a licensed producer regarding dried or fresh marijuana or cannabis oil may be reviewed during an inspection.

In cases of serious adverse reactions (defined as a noxious and unintended response to dried marijuana that requires in-patient hospitalization or a prolongation of existing hospitalization, that causes congenital malformation, that results in persistent or significant disability or incapacity, that is life threatening or that results in death), a report must be submitted to Health Canada within 15 days. Licensed producers can send reports to:

Mail: Canada Vigilance Program
Products Safety and Effectiveness Information Bureau
Marketed Health Products Directorate
Health Products and Food Branch
Health Canada Address Locator: 0701E
Ottawa, ON K1A 0K9

E-mail: CanadaVigilance@hc-sc.gc.ca
Telephone: 613-957-0337
Facsimile: 613-957-0335

Licensed producers must prepare an annual summary report that contains a concise and critical analysis of all adverse reactions involving dried or fresh marijuana and cannabis oil. Pursuant to subsection 169(3), licensed producers must retain all serious adverse reaction case reports and all annual summary reports for a period of 25 years. These records may be reviewed during an inspection.

11. What happens if the licensed producer does not meet the requirements of the CDSA and its regulations, including the ACMPR and the NCR, or the FDA?

If during an inspection a licensed producer is unable to demonstrate that the legislative and regulatory requirements have been met, the inspector will inform the licensed producer. The inspector will document any discrepancies between what was observed during the inspection and the requirements stipulated in the regulations, including the ACMPR and NCR, licence conditions or application submissions; a discrepancy is referred to as an “observation”.

For each observation, the licensed producer must respond with a corrective action plan submitted in writing to Health Canada, and signed by an officer with authority to bind the company, preferably the Senior Person-In-Charge. The plan should address the issue, and prevents recurrence; a timeline for the completion of the action plan for each observation should also be included. Examples of corrective actions include revising procedures, applying for a licence amendment to include any unreported change, or enhancing security.

It should be noted that, where it is necessary to prevent injury to clients, prevent diversion of dried and fresh marijuana and cannabis oil from the legitimate supply chain, or it is suspected that records may have been falsified, immediate enforcement action such as the seizure of substances or the recall of dried and fresh marijuana and cannabis oil may be required under the FDA. This allows Health Canada to take quick and appropriate action, when a serious health risk is identified, such as ordering a mandatory recall of cannabis for medical purposes.

The severity and number of observations noted during an inspection will be used to assign a rating to the inspection. Inspection ratings are used to determine compliance and enforcement actions that may be taken by Health Canada, such as changes to inspection frequency and suspension or revocation of the licence.

Inspection Checklist for Licensed Producers

Documents such as, but not limited to following list may be requested by the inspector during an inspection:

• Standard operating procedures (relating to the production, packaging, labelling, and storage of dried and fresh marijuana and cannabis oil)
• Reports related to premises (e.g., intrusion detection system, security of site perimeter, security of areas where cannabis is kept, air filtration, sanitation program, alarm logs)
• Personnel records (e.g., organizational charts, security clearances, QA statement of qualifications, training records)
• Production records for each batch/lot of cannabis oil produced (e.g. quarterly inventory reports)
• Shipping records (e.g., labels, package inserts, tracking, quantity, security)
• Production records for each batch/lot of marijuana propagated, sowed, harvested or dried (e.g. quarterly inventory reports)
• Loss or theft reports (date of discovery, date reported to police force, date reported to Health Canada, description of incident, security measures, product information)
• Complaint records, and associated investigation and follow-up actions
• Client registration records
• Adverse Reactions documentation (e.g., list, case reports, annual reports)
• Equipment records (e.g., calibration, routine and preventative maintenance, temperature monitoring, alarm logs for the applicable equipment)
• Documents relating to Good Production Practices (e.g., packaging, labelling, detection and identification of microbial and chemical contaminants, analytical testing, storage, pest control products)
• Destruction records (e.g., date, location, method, name of substance, quantity, witnesses)
• Research and development records (description, quantity, activity of cannabis or product or compound made or assembled).

It should be noted that this list is not exhaustive, and is not provided in any order of priority; additional documents may be requested prior to and/or after the inspection. In addition, some of the above documents may not be applicable in all cases.

Tell us what you think

The Office of Medical Cannabis is committed to providing licensed producers with information and guidance related to achieving and maintaining compliance with the Controlled Drugs and Substances Act and its regulations, as well as the Food and Drugs Act and its regulations.

This information package is just one way we are working to demonstrate our commitment. Please tell us what you think to help us find new ways to provide relevant and useful information, and develop more effective tools.

Please email your feedback to CMC@hc-sc.gc.ca or Fax: (613) 941-6840.