CannDelta has experience consulting businesses that want to know how to start an outdoor cannabis growing business and wish to obtain a Standard Cultivation (Outdoor) Licence in Canada. We additionally serve cannabis entrepreneurs in the US from our firm’s NY and NJ consulting branches
Standard Cultivation (Outdoor) Licence
The Standard Cultivation (Outdoor) Licence is needed if the plan is to cultivate and harvest fresh cannabis plants and seeds outdoors, to dry and to sell bulk-packaged cannabis to other licence holders. The licence holder may sell and distribute fresh and dried cannabis, plants and seeds to other cannabis licence holders, with the exception of nursery licensees, to whom only cannabis plants and seeds may be sold or distributed. Holders of a Standard Cultivation Licence may also conduct ancillary activities (e.g., drying, trimming, milling) indoors and alter the physical or chemical properties of cannabis for testing purposes. This licencedoes not allow licensees to package, apply an excise stamp or sell directly to the provincial wholesaler, retailers, or to medical patients.
Capacity Limits: (none)
Physical Security Requirements: $$$$$
Specialized Personnel: (none required)
Recommended Personnel: Skilled/experienced Master Grower
Est. Application Review Timeline: 4-6 months with consultant, 12+ months without a consultant
Permitted Activities: Propagation, cultivation, harvesting, drying, trimming, milling, and selling bulk (unpackaged) cannabis within licensed areas of the site perimeter only.
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.
Outdoor Cannabis Cultivation Business Plan
A Business Plan for the proposed operation is needed to help secure this licence. The plan should describe the applicant’s business model indicating the products they intend to sell and the activities that will be conducted. Attention will be paid to any affiliations or business relationships the operation will maintain with other companies.
All cultivation licence applicants must provide the authorized source of starting material. Where the applicant intends to use cannabis plants or seeds not obtained in accordance with the former Access to Cannabis for Medical Purposes Regulations, the former Industrial Hemp Regulations, the Industrial Hemp Regulations or with the Cannabis Regulations or from a person authorized to sell cannabis under a provincial Act, they must select “Declaration under 10(2) of the Cannabis Regulations” as their source.
Key Site Personnel
The applicant will be asked to identify key site personnel involved with the proposed facility, including the Responsible Person and Alternate, Cultivator (i.e., Master Grower, Alternate Master Grower) and Head of Security. Applicants must show that personnel have the knowledge, qualifications, experience and ability to fulfill applicable responsibilities. The requirements of the Responsible Person are noteworthy as this individual will have the authority to bind the licence holder; has overall responsibility for activities conducted by the licensee; and must know the Cannabis Act and Regulations provisions applying to the holder of the license. The Responsible Person also serves as the official point of contact with Health Canada. The Head of Security must ensure that the applicable security measures set out in Part 4 of the Cannabis Regulations are complied with, and they are responsible for the organizational Licence Holder’s security plan.
Security Clearances are a critical requirement, for all key site personnel, directors and officers of the corporation and all main investors in the enterprise. An organizational chart is needed with the package to show the structure of the enterprise, with names, titles and reporting relationships, including management positions and any other roles that influence strategic business and operational decisions, and the movement of money or cannabis.
As noted, facility requirements for outdoor cultivation licences include outdoor areas but it also includes an indoor area large enough to conduct important activities such as storage, shipping/receiving, drying, milling, etc. Typically, the area will be about an acre or larger and must be surrounded by a fence. Specific fencing requirements must be addressed. A Limited Access Area (LAA) must be demarcated and bordered by an eight (8) foot high steel fence. Entry gates should be the same height as the ground and built of six-gauge steel. The exterior fence should conceal the LAA so that it is not easily seen from outside the facility’s growing area. Lighting must surround the fence’s outer limits to light all sides from a minimum of 20 feet away or the use of thermal cameras may be used to monitor and protect the perimeter of the site. Indoor facilities accompanying an outdoor growing site typically include a building 1,000 square feet or larger. Indoor facilities must be on-site for drying, trimming, storage and shipping. Hoop houses and other temporary structures can be used as these areas are considered outdoor.
As with outdoor cultivation licence applications, physical security risks and mitigation measures should include arrival/departure procedures; access to areas where cannabis is present; response procedures for breaches; storage, retrieval and record-keeping requirements for video surveillance; and other activities. Most of the applicable security requirements for indoor cultivation facilities such as site drawings and specifications for access control, intrusion detection, visual surveillance and restricted access to Secured Storage areas, also apply to licensing of outdoor cultivation activity.
Good Production Practices (GPP)
A Good Production Practices (GPP) report is an important requirement for this licence class. The report must describe how and where cannabis and anything used as an ingredient will be stored including storage conditions (temperature, humidity). The storage procedure must be fully disclosed, e.g., for in-process, bulk storage, containers, samples and materials awaiting destruction. A building description detailing surfaces, filtration and ventilation systems, air exchanges, water supply, lighting, sanitation, cleaning/maintenance and other aspects is part of the report. Visual evidence must also be submitted, including guided video tours and photographs of the site to highlight GPP features of the building and operational areas. Finally, a GPP attestation is completed to round out the report.
The applicant may need additional licences to help realize their business plan. Licences for standard processing, research, testing and sales are permitted combinable licences with the Standard (outdoor) Cultivation Licence. All cultivators of cannabis products are required to obtain a cannabis licence from the Canada Revenue Agency (CRA).
Applicants also need to file a key investor report, which is required for those seeking a licence for cultivation, processing or sale for medical purposes if the entity’s shares are not publicly traded.