Become a Licensed Producer of Cannabis

Application to Become a Licensed Producer Under ACMPR

Are you looking to become a licensed cannabis producer in Canada? Sharp Business Plans can help your Canadian business submit Health Canada friendly business plans.

According to the Government of Canada,”Even if you have a Health Canada licence, you must apply for a CRA cannabis licence for both medical and non-medical (recreational) purposes.”

“To produce cannabis means to obtain it by any method or process, including by manufacturing, synthesis, altering its chemical or physical properties by any means, or cultivating, propagating or harvesting it or any living thing from which it may be extracted or otherwise obtained. It also includes packaging the cannabis product.”

Additionally, “Unless specified in the Act, every person who wishes to produce or package cannabis products would be required to obtain a licence under that act. This includes persons who produce cannabis products for research and development or educational purposes.”

On the surface, it’s pretty simple to become a licensed producer under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR).

1. Email Health Canada’s Office of Medical Cannabis and request the application form.

2. Fill out and submit the 14-page form, which has lots of boxes to check off.

3. Wait for your licence.

If that sounds too good to be true, it’s because it is; it’s really not that simple. If you simply completed the form and sent it in, Health Canada would reject the application as “incomplete.” In fact, by the end of May 2017, Health Canada had rejected over 50% of the ACMPR licence applications they had received. So, what do you have to do?

How to Become a Licensed Cannabis Producer in Canada

Follow these steps:

1. Email Health Canada for the application form.

2. Fill out the 14-page form.

3. Provide your ACMPR business plan. (Don’t have one? We can help).

4. Arrange for RCMP security clearances for senior management and corporate officers. Provide proof by attaching copies of:
Security Clearance application form (ACMPR).
Security Clearance Fingerprint Third Party Consent to release personal information (ACMPR).
*Note: That’s two forms for each senior manager and corporate officer.

5. Provide a building location survey, signed by a qualified surveyor.

6. Submit an aerial photo of the site and surroundings out to 500 metres.

7. Include a detailed description of the security measures, complete with floor plans and specifications.

8. Notify local government, police and fire of your application and attach copies.

9. Prepare and submit detailed Standard Operating Procedures (SOPs).

10. Provide detailed Quality Assurance Processes.

11. Details of the Quality Assurance person’s qualifications and experience.

12. Submit details of the record-keeping methods relating to security, inventory, good production practices (GPP), and destruction methods.

13. Check, sign and send the package (it will weigh at least two pounds/one kilogram) to Health Canada.

Complete all Forms & Documents

That’s the beginning of the process. If you don’t send ALL of the above documents and forms, your application will be returned as incomplete. The actual application fee to become a licensed producer is currently zero. However, be prepared to budget between $75,000 and $150,000 to pay the various consultants that you’ll need to help you through the licensing process.

As always, we’re here to help you with step number 3 (your ACMPR business plan) and have experience working with dozens of other ACMPR applicants on their business plans. If you have any question about your application to become a licensed producer, contact us today for a free consultation. It’s important to note that all the information included is for reference purposes only and does not replace the Excise Act, 2001 or its regulations.

Making the Process Easier

If you are wondering about the best practices on how to become a licensed cannabis producer in Canada, we’ve made figuring out the steps of the process easier. Follow our tips to become a commercially licensed producer of recreational and medical cannabis under the Access to Cannabis for Medical Purposes Regulations (ACMPR).

If you are packaging cannabis products, you must also register for the cannabis-stamping regime at the same time as licensing. A licence is required to produce or sell cannabis for medical purposes. Licensed products include dried or fresh cannabis, cannabis oil, starting materials and plants.

10 Tips to Become a Commercially Licensed Cannabis Producer in Canada

Location, location, location. Your application as a Licensed Producer (LP) is 100% tied to the location of your facility. If you change the location, you will have to resubmit your application. When you think you have the ideal location, phone the municipality or local government office to confirm they will support a business licence for a cannabis facility in that location.

Budget a significant amount. Not to mention the various consultants that you’ll require to manage and complete your application, I suggest having a budget of $100,000 to $150,000 just for the application.

Choose your advisors very carefully. Along with your application, you will need to provide the Standard Operating Procedures (SOPs), Quality Assurance (QA) processes, security plans and protocols, a solid business plan, and details of your seed to sale record keeping and tracking solution. If there are questions from Health Canada (and there probably will be), you want to be sure that the consultants will still be in business are also not going to bill you a great deal extra to answer the questions on their work.

Warehouse or greenhouse? If you have to build a growing facility, don’t ignore greenhouses. Most of the larger licensed producers (LPs) are expanding their growing space with modern marijuana greenhouses equipped with light deprivation systems. Do they know something that you don’t?

Size does matter. Under the current regulations, it does not make business sense to have a very small medical marijuana operation. All cannabis facilities must have a full-time qualified and experienced Quality Assurance person who has to monitor and check the production team. You also have to include the cost of a (minimum) Level 7 vault, security and record keeping systems, and a 2,500 square-foot growing facility to make enough return to justify the investment.

A capital idea. When you are trying to calculate how large an investment you have to make in your medical cannabis business, you tend to think about the larger expenses such as: land, building, equipment, etc. Accountants (like us) call these types of expenditures capital expenses. Obviously, you need to be fairly comfortable with the estimates that you have for these major items. However, you also need to allow a large amount for working capital — the money that you’ll need to actually operate the business until you generate enough sales revenues to cover those operating expenses. Even a small operation will need at least $1,000,000 in working capital.

Must be PICky. In your application, Health Canada requires you to name your PICs (Persons in Charge). You have to have a SPIC – Senior Person In Charge and may also have RPICs – Responsible Person in Charge and A/RPIC – Alternate Responsible Person in Charge. The application form does not inform you about this; however, you should have at least three PICs. People take vacations and people are occasionally sick, so you really need three PICs to guarantee that there will always be at least one PIC on site, when anyone is “touching” cannabis.

Security clearances. Be very picky. Your PICs and the officers of the corporation (you ARE using a corporation to apply for the licence, aren’t you!) must all be security cleared in-depth by the RCMP. Ideally, not only must those people being checked have clean records (no association with crime or drug offences), even their associates should be able to pass the security checks.

Follow up. If you simply submit your application and wait patiently for a year or two, you are not making the best of your situation. You should continually review your application, and if you know that you’ll have to make changes to it to demonstrate best practices in this ever-changing industry, do so. Submit an abridgement (amendment) to your application to let Health Canada know that you are proactive and serious. You want to assure them that you have a solid application and that you’ll be running an efficient, secure, high-quality, healthy business.

Business plan. Just like the rest of your application, Health Canada will read your business plan very thoroughly. They want to know that you really understand this business. Are your building and equipment costs realistic? Do you have sufficient working capital? How will you manage your inventory? What is your marketing plan, and is it legal? Most importantly, will the business be successful and is the business plan believable?

We’re Cannabis Experts on Writing Business Plans

It’s important to note our expertise in this industry; we have prepared over 40 business plans for Canadian cannabis businesses without a single rejection from Health Canada. Contact us through our website or toll-free at +1 (800) 661-9842 and we’ll help you master how to write a business plan for your cannabis business in Canada.