How to Set Up a Cannabis Business
in Canada to Grow Hemp
What is an Industrial Hemp Licence
The Industrial Hemp Licence is needed to cultivate, sell, import, export, clean, prepare, process (all parts of the hemp with the exception of the hemp flower). An Industrial Hemp Licence is required if an applicant wants to grow, make derivatives or products from, sell, or import/export industrial hemp. The licence is also reqiured in order to sterilize grain (i.e., to make it non-viable), clean hemp seed or grain, or to prepare (condition) industrial hemp seed. The above activities are limited to parts of the hemp plant that exclude hemp flower, CBD or other cannabinoids.
The licence application must indicate the approved industrial hemp cultivars being proposed per each activity. For the purposes of the application, “approved cultivar” refers to varieties listed for commercial cultivation under licence for the current year. Unapproved cultivars or varieties with less than 0.3% THC in flowering heads and leaves may be proposed for plant breeding and propagation, subject to testing.
An Industrial Hemp Licence is required if the applicant wants to grow, make derivatives or products from, sell, or import/export industrial hemp. The licence is also needed in order to sterilize grain (i.e., to make it non-viable), clean hemp seed or grain, or to prepare (condition) industrial hemp seed. Please note that import or export of flowering heads, leaves and branches also requires an import/export permit for each shipment.
Capacity Limits: (none)
Physical Security Requirements: (none)
Specialized Personnel: (none required)
Recommended Personnel: Skilled/experienced Master Grower
Est. Application Review Timeline: 1-2 months
Industrial Hemp Licence Permitted Activities
Permitted Activities: Propagation, cultivation, harvesting, drying, trimming, milling, storing, and purchasing/selling hemp, hemp stalks, leaves, seeds, or hemp flower. The holder of an industrial hemp licence can only sell hemp flower to a licence holder for Standard or Micro Processing.
Ownership and Industrial Hemp Licences
Site ownership is the first point of interest to Health Canada, with the Department’s requirements geared to ownership type. Depending on whether the site is owned by an individual, partners, a corporation or co-operative, a consent form may be submitted.
For products/derivatives made from grain not containing phytocannabinoids (e.g., hemp seed oil, hemp protein powder), no licence is required if less than .<10 µg/g THC after testing and compliant with paragraph 2(1)(a) of the Industrial Hemp Regulations. Also, no licence is needed for producing non-viable grain, bare mature stalks (or fibre produced from stalks), or for hemp roots.
Depending on the applicant’s status (i.e., whether an individual, corporation, partnership or cooperative), different requirements will apply. For example, a corporate applicant must upload a copy of the Certificate of Incorporation along with incorporation number to the Cannabis Tracking and Licensing System (CTLS), along with a list of all officers and directors of the corporation. If applying as a partnership, the Partnership Agreement is needed, plus a list of all partners with government-issued ID for each partner.
Activity-dependent Further Hemp Regulation Requirements
Required activity-dependent information depends on the proposed activities under the licence. For example, seed production, seed importation, seed conditioning, and plant breeding/propagation have further requirements that must be fulfilled under the Seeds Regulations. For seed production, the applicant must be a member of the Canadian Seed Growers’ Association and adhere to their requirements for pedigreed seed production. Seed importation requires a Certification of Registration as an Authorized Importer issued under Part IV of the Seeds Regulations. With Plant breeding/propagation, the applicant must be recognized as a plant breeder by the Canadian Seed Growers’ Association.
Cultivation Details related to the operation’s intended purpose are required for the application. This will focus on options such as plant breeding and propagation; seed or grain production; growing plant stalks for fibre; or growing flowering heads, leaves and branches. Site ownership is a separate area of the application, with different declaration documents needed depending on whether the applicant owns the site or intends to use land owned by another party. If activities other than cultivation are being proposed (e.g., selling, importing) the site address must be disclosed, along with the part of the plant central to that activity.
Note that THC testing is required for the holder of a licence that authorizes cultivation for seed, and also required for plant breeding, and for including an industrial hemp variety on the List of Approved Cultivars. No varieties are exempt from THC testing requirements.