Annual Compliance and Enforcement Report 2015-2016

Table of Contents

Executive Summary

This report outlines the compliance and enforcement activities conducted by the Office of Medical Cannabis (OMC) within Health Canada. The OMC develops and implements legislation, regulations, policies and operational programs to support reasonable access for those who require cannabis for medical purposes, and sets and implements the strategic direction, program priorities and policies.

As part of its mandate, the OMC is also responsible for promoting, monitoring and enforcing compliance with the Access to Cannabis for Medical Purposes Regulations (ACMPR), Controlled Drug Substances Act (CDSA) and the Food and Drugs Act (FDA).The objective of the compliance and enforcement program is to reduce the risks to public health, security and safety of Canadians, by reducing and preventing the risk of diversion and ensuring that cannabis for medical purposes meets the safety and quality standards of the ACMPR. The program is administered jointly by the OMC and the Controlled Substances Program (CSP) within the Regulatory Operations and Regions Branch (RORB) at Health Canada. The CSP is responsible for the delivery of a national inspection program designed to assess and monitor compliance with the ACMPR. The OMC and the CSP develop and maintain valuable relationships with commercial producers, health care professionals, law enforcement, and other stakeholders including industry associations and international organizations.

2015-2016 Key Statistics

  • 316 inspections
  • 7 inspections leading to significant compliance actions
  • 97% compliance rate for targeted inspections
  • 96% compliance rate for regular inspections
  • No recalls

2015-2016 Highlights


The former Marihuana for Medical Purposes Regulations (MMPR) created the conditions for a commercial industry that is responsible for the production and distribution of marijuana for medical purposes. Individuals with a medical need and the authorization of their health care practitioner can access quality-controlled dried marijuana that is produced under secure and sanitary conditions.

In June 2015, the Supreme Court of Canada delivered its decision in the R v. Smith case authorizing individuals under the former MMPR and those falling under the terms of a court injunction (e.g. Allard injunction) to possess marijuana derivatives for their own use. Consequently, Health Canada issued a Section 56 Class Exemption under the CDSA, allowing licensed producers to produce and sell cannabis oil, and fresh marijuana, in addition to dried marijuana. As a result, licensed producers who are authorized to produce and sell cannabis oil and/or fresh marijuana are issued a supplemental licence that allows them to conduct these activities, once they demonstrate compliance with all aspects of the former MMPR related to marijuana derivatives.

On August 24, 2016, theACMPR were brought into force in order to provide an immediate solution to address the Supreme Court of Canada’s decision in the Allard v. Canada case. The decision stipulated that requiring individuals to receive access to cannabis for medical purposes only from licensed producers violated section 7 of the Canadian Charter of Rights and Freedoms. Under the ACMPR, Health Canada is accepting applications from individuals who wish to register to produce a limited amount of cannabis for their own medical purposes or to designate someone to produce cannabis for them. Additionally, applications to become a licensed producer that were submitted under the former MMPR continue to be processed, along with new applications under the ACMPR.

Inspections of licensed producers and licensed producer applicants are managed through a comprehensive compliance and enforcement program to monitor the activities, products and sites. This program has evolved to conduct inspections to assess compliance with the ACMPR, CDSA and the FDA. Health Canada can inspect the operations of a licensed producer at any reasonable time to verify that the applicable legislative and regulatory requirements are being met.

Additionally, under Health Canada’s Regulatory Transparency and Openness Framework and Action Plan, the OMC published the first Annual Compliance and Enforcement Report for fiscal year 2014-2015, and began the regular publication of the Inspection Data Summary. In addition, the OMC developed and piloted a new Inspection Risk Rating System which uses a licensed producer’s previous inspection results and compliance history to inform Health Canada’s future inspection plans.

As of March 31, 2016, there were 30 licensed producers across Canada. Health Canada is committed to providing licensed producers with information and guidance to assist them in meeting the requirements of the ACMPR, CDSA, and FDA, and to ensure that legal and reasonable access to cannabis for medical purposes is provided to Canadians with a medical need.

Through continuous monitoring and active enforcement, the public health and safety risks associated with cannabis are reduced and Canadians with a medical need have access to a quality controlled product.

Compliance and Enforcement Activities

Compliance and enforcement activities are conducted as follows:

  1. Compliance education, consultation, and information
    Compliance is facilitated through ensuring that the legislative and regulatory requirements are clearly identified and understood. This is achieved through the distribution of policies, directives, guidance material, and information bulletins to licensed producers.
  2. Compliance monitoring
    Compliance is monitored through inspections, which evaluate the licensed producers on their regulated activities. Additionally, compliance verifications may be conducted as part of inspections when potential issues of non-compliances such as complaints are brought to the attention of Health Canada.
  3. Enforcement
    Enforcement actions are taken if and when there are products, or activities conducted by licensed producers, that are non-compliant with the applicable legislative and regulatory requirements. Enforcement tools are utilized in a continuum of graduated activities and responses based on the compliance history of the licensed producer, and on the severity of the non-compliance. Enforcement tools include significant compliance actions, which may be taken during or post-inspection, and include, but are not limited to, the issuance of warning letters, seizure and detention of products, licence suspension or revocations.

The compliance and enforcement program has been successful at protecting client health and safety, and preventing and reducing the risk of diversion by identifying deficiencies and ensuring corrective measures are implemented.

Inspection Types

The OMC conducts four types of inspections to assess and monitor compliance with the former MMPR or new ACMPR, CDSA and FDA.

  • Pre-licence inspection
    Conducted to assess whether the information submitted in a licence application is accurate prior to the issuance of a licence for the activity of production (cultivation). This inspection is also conducted to assess whether the information submitted by a licensed producer for an amendment to their licence is accurate.
  • Initial inspection
    Conducted to assess whether the facilities, activities, and products are in compliance with the good production practices and record keeping requirements prior to the issuance of the activity of sale.
  • Targeted inspection
    Conducted to verify compliance with particular areas of the former MMPR or new ACMPR.
  • Regular inspection
    Conducted to monitor and verify compliance with all the requirements of the former MMPR or new ACMPR, CDSA and FDA prior to licence renewal. 

Activities in Fiscal Year 2015-2016

Figure 1. Number of inspections conducted by month in fiscal year 2015-2016

Text Equivalent below
Text Description
Figure 1: Data
  Pre-Licence Initial Targeted Regular
April-15 0 2 22 0
May-15 1 0 22 1
June-15 3 1 21 1
July-15 8 1 1 2
Aug-15 8 0 18 3
Sept-15 3 1 16 6
Oct-15 2 1 24 2
Nov-15 4 1 20 4
Dec-15 5 5 17 2
Jan-16 3 3 19 5
Feb-16 6 1 24 0
Mar-16 4 0 22 1

Figure 1 displays the monthly breakdown of inspections by type conducted in fiscal year 2015-2016. In fiscal year 2015-2016, 316 inspections were conducted at licensed producers’ and applicants’ sites. Overall, the number of inspections per month ranged from 24 inspections at the beginning of 2015 to 31 inspections towards the end of the fiscal year. The increase in the number of inspections can be attributed to the increased number of licensed producers. In July 2015, some targeted inspections were cancelled to focus on pre-licence inspections and the development and update of various tools for inspectors such as standard operating procedures and forms. This was due to the coming into effect of the Section 56 Class Exemption for licensed producers after the delivery of the R v. Smith decision. Pre-licence inspections were conducted at licensed producer’s sites which facilitated the processing of licence amendment applications. Detailed information and inspection data can be found in the Inspection Data Summary that is published and updated on a quarterly basis. 

Table 1. Number of Inspections conducted and compliance rate by type for 2015-2016
Inspection Type Number of Inspections Compliance Rate
Pre-licence 47 Not applicableTable 1 Footnote *
Initial 16 Not applicableTable 1 Footnote *
Targeted 226 97%
Regular 27 96%

Table 1 Footnotes

Table 1 Footnote 1

Pre-licence and initial inspections do not have a compliance rating as they are conducted to assess that information submitted complies with the ACMPR prior to granting the activity of production or sale. These inspections only provide the required information for granting licensed activities.

Return to table 1 footnote * referrer

Table 1 displays the compliance rate by type of inspections for fiscal year 2015-2016. The compliance rate of an inspection is based on whether significant compliance actions were undertaken during and/or after the inspection. In fiscal year 2015-2016, 7 inspections led to significant compliance actions that were taken as a result of inspections of licensed producers. There were 3 warning letters issued, and 5 seizures of products conducted. These included the seizure of products and the issuance of warning letters for various non-compliances, such as: 

  • 1 seizure of unauthorized material;
  • 3 seizure of products due to Good Production Practices non-compliance;
  • 1 seizure of products due to Contravention of Physical Security Directive;
  • 3 warning letter for contravention of Physical Security Directive.

It must be noted that multiple significant compliance actions may be taken as a result of one non-compliance.
More information on the significant compliance actions can be found on the Inspection Data Summary

Figure 2. Average number of observations per month, in fiscal year 2014-2015 and fiscal year 2015-2016

Text Equivalent below
Text Description
Figure 2: Data
  2015-2016 2014-2015
Apr 6,32 10,43
May 2,09 10,94
Jun 4,91 6,53
Jul 14,67 4,43
Aug 7,48 4,42
Sep 5,77 5,30
Oct 6,35 3,86
Nov 4,75 5,45
Dec 4,74 5,11
Jan 5,71 5,68
Feb 3,00 6,88
Mar 2,48 5,58

The regulation of commercial licensed producers is relatively new in Canada and guidance to the regulated party is often critical to facilitate full compliance. Based on figure 2, throughout 2014-2015 and 2015-2016, there is an overall trend to improved compliance as indicated by a reduction in the number of observations made during inspections as compliance promotion and education was established, and licensed producers better understood their regulatory requirements.

Regulatory Sections Cited Most Frequently

A total of 5,303 citations were noted in the targeted and regular inspections conducted in fiscal year 2015-2016. The most frequently cited areas of concern under the former MMPR were as follows:

  • Non-compliance with visual monitoring requirements
  • Lack of approval of standard operating procedures by quality assurance person
  • Inability to identify and explain inventory fluctuations

Risk Rating

The OMC piloted the Inspection Risk Rating System in fiscal year 2015-2016. This system, implemented on April 1, 2016, establishes a risk-rating for licensed producers based on the observation and inspection rating throughout their licensing period and based on their compliance history. A technical briefing was held by the OMC for licensed producers to outline and explain the approach. Moving forward, all licensed producers will be evaluated under this Inspection Risk Rating System.

Observations made during inspections of licensed producers will be assigned a minor, major or critical rating. Based on the observation number and severity, an inspection rating of compliant or non-compliant will be given. The inspection rating will be used at licence renewal and throughout the licensing period to assess the licensed producer’s risk rating. The licensed producers risk rating is used to determine, among other things, the period of the license and frequency. However, it should be noted that Health Canada may choose to inspect the licensed producers at any point in time to ensure their activities meet the regulatory requirements.

New Licensed Producers in fiscal year 2015-2016

Five applicants were issued a licence in fiscal year 2015-2016 (4 in Ontario, 1 in British Columbia):

  • AMMCan
  • Emblem Cannabis Corp.
  • Green Relief Inc.
  • Mettrum Ltd.
  • THC Biomed Ltd.

Pre-licence inspections were conducted to verify that the information submitted to Health Canada was accurate, and licences were issued for production once the requirements of the former MMPR were met.

Once licensed producers demonstrate their readiness to add the activity of sale to their licence, an initial inspection will be conducted to verify compliance with the Good Production Practices and record keeping requirements prior to granting this activity.


No recalls were initiated throughout fiscal year 2015-2016. Recalls are initiated when product quality poses a potential risk to public health. Inspections under the compliance and enforcement program consistently evaluate licensed producers’ Good Production Practices to ensure that the requirements of the former MMPR or the ACMPR are met. A comprehensive compliance and enforcement regime has minimized the risk to client health through product quality control.

Forward Planning

Following the successful pilot in fiscal year 2015-2016, the new inspection approach of risk rating licensed producers based on their compliance history has been implemented effective April 1, 2016. The OMC will continue the publication of the Inspection Data Summary on a quarterly basis.


The OMC continues to streamline and adapt the management of the medical cannabis program to protect the health and safety of Canadians. The development and implementation of policies and operational programs will continue to improve communication with licensed producers and stakeholders, and enhance compliance with the regulations.

Contact Information

National Compliance and Enforcement Section
Office of Medical Cannabis
Address Locator: 0300A
Ottawa, Ontario K1A 0K9

Page details

Date modified: