Canada: Task Force Report: Production Of Cannabis

In this edition of our series on the Task Force's final report "A Framework for the Legalization and Regulation of Cannabis in Canada" (the "Report") we explore the Task Force recommendations for regulating the production of cannabis. One of the major themes that formed the basis of the discussions throughout the Task Force consultation process was the establishment of a safe and responsible production system. Accordingly, the Task Force recommended that the government's principal interest should be to establish an efficient, accountable and transparent system for regulatory oversight of the cannabis supply chain which emphasizes the protection of health and safety and reducing diversion to the black market.

The following are four key takeaways from the Task Force's recommendations relating to the production of cannabis.

1. Entry into the Non-Medical Market

The Task Force recommends that the federal government take a measured approach to regulating the production of cannabis including regulating the entry of new producers into the market. In developing the new framework, the Task Force identified several concerns that should be considered, including:

  • Oversupply of cannabis: The Task Force recommends aligning supply with likely demand to avoid potential negative outcomes (e.g., overconsumption). In achieving this goal, the Task Force recommends implementing production controls by limiting the number of production licenses or the total capacity permitted under such licenses.
  • High compliance costs: The Task Force acknowledged that the certain compliance requirements under the Access to Cannabis for Medical Purposes Regulations (the "ACMPR") may be prohibitively expensive and, therefore, a barrier to entry for new market participants, especially with respect to smaller producers. Accordingly, the Task Force recommends that licensing and production controls should be used to encourage a diverse, competitive marketplace that also includes craft and artisanal producers.
  • Security clearance requirements: The Task Force listened to stakeholders who are currently operating in the unregulated cannabis market but desire to legitimize their businesses and transition into the regulated market. This group expressed concerns that they will be excluded from the regulated market as a result of their involvement in the unregulated market due to the stringent security clearance requirements currently in place under the ACMPR. In our view, if the same security clearance requirements are carried over into the non-medical regime, it may prevent many qualified industry professionals from participating in the regulated market, and potentially rob the regulated market from some of the most qualified operators, while at the same time, aiding the survival of the unregulated market as these operators are left without a viable pathway into regulated operations.

Given the above, we view the Task Force recommendations as being generally favourable to early movers such as current licensed producers ("LPs"). Given LPs' existing production capacity, current distribution capabilities, and quality assurance systems, they are well positioned to be the primary source of supply for the non-medical market. However, the Report was also very favourable in terms of recommending allowances for a broader group of market participants by identifying the need for market diversity and our expectation is that the non-medical market will provide opportunities for craft and artisanal growers to play a meaningful role in the regulated cannabis economy.

2. Quality Assurance

The Report emphasizes the need for rigorous safety and quality standards in order to protect public health and safety. This already exist in the medical cannabis industry and while the Task Force recommends that certain parts of the current medical regime be reconsidered in order to encourage a diverse marketplace (e.g., onerous physical security requirements), quality control measures are not an area where we expect to see materially reduced compliance standards.

Therefore, we believe that the current LPs will have a market advantage given their experience in complying with Health Canada's quality control requirements. Further, we believe that laboratories (which are licensed as "Licensed Dealers" ("LDs") pursuant to the Narcotic Control Regulations) will become increasingly important as the range of consumer products expand and quality controls and quality assurance testing becomes more diverse and more complex. Lastly, we expect that specialized ACMPR consultants and technical professionals who offer expert advice regarding good production practices, development and implementation of standard operating procedures and record management solutions will be in high demand in the non-medical market.

3. Personal Cultivation

The Task Force recommends permitting some cultivation of non-medical cannabis for personal use and draws parallels to the regime of home production of wine and beer for personal use. However, the Task Force acknowledged that small-scale personal cultivation of cannabis is not without risks, especially when considering the potential exposure of children to cannabis. Consequently, the Task Force recommends a model whereby limited personal cultivation is permitted, incorporating limits on the scale of cultivation, guidelines surrounding personal cultivation methods, the regulation of starting materials (such as seeds, seedlings, and plant cuttings) and oversight by local authorities.

The Task Force recommends that personal cultivation be limited to four plants to a maximum height of 100 centimetres, while prohibiting certain dangerous manufacturing processes such as use of volatile solvents to create cannabis concentrates. We anticipate that enforcement of these restrictions will present new challenges to local authorities who will need to develop procedures to ensure that personal cultivation is carried out within the prescribed parameters.  

Interestingly, the Report notes that, while there should be some provision for personal production, the Task Force does not see personal cultivation as a viable alternative to commercial production under strict regulatory oversight. In our view, personal cultivation exemptions will likely be used by hobby growers and those that require increased access to medical cannabis. As such, we do not anticipate that personal cultivation will result in a significant decrease in the demand for cannabis products produced by LPs and new market entrants.

4. Outdoor Cultivation

The Task Force recommends permitting outdoor cannabis cultivation, primarily out of a desire to limit the environmental impact of indoor production. Subject to adequate security measures, the Report suggests that outdoor cultivation may reduce the environmental burden which indoor production presents as a result of energy intensive indoor lighting, climate controls and water usage requirements. Another reason offered by the Task Force for outdoor cultivation was to lower barriers to entry to smaller craft or artisanal producers.

In our view, outdoor cultivation presents a few threshold considerations. Outdoor cultivation is largely dependent on a suitable environment and appropriate genetics in order to produce both sufficient plant yield and product quality. Cannabis is an annual plant (it germinates, flowers, and is harvested in the same year) and, in part, its different stages of growth are related to the amount of sun it receives at each stage. Given Canada's diverse climate, outdoor cultivation is likely to be concentrated in regions with a suitable growing environment and will, in part, depend on the market availability of cannabis varieties that can thrive in such regions. As such, ensuring an adequate legal supply of cannabis varieties that are suitable for the Canadian climate will be critical for creating a feasible outdoor cultivation regime. Therefore, those interested in outdoor cultivation will need to consider several factors to determine economic feasibility including:

  • appropriate geographic locations;
  • availability of cannabis genetics;
  • potentially lower annual yields; and
  • the associated cost of quality assurance and security measures.

Within a regime that allows for outdoor cultivation, we would expect to see LPs and LDs who are currently investing in cannabis breeding and phenotyping programs to be well positioned to quickly pivot those programs to take advantage of new outdoor cultivation opportunities.

The above update provides a brief overview of the Task Force's recommendation related to the production of cannabis. It is important to remember that cannabis law is complex and rapidly evolving. At Bennett Jones LLP, we have a team of industry-leading professional advisors that can provide legal and strategic guidance to all industry participants as the Canadian cannabis industry continues to advance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions