Canada: Cannabis Regulations Published – Licensing Basics

Last Updated: July 18 2018
Article by Jeremy Burke and Gaurav Gopinath

Following Royal Assent of the Cannabis Act (the "Act") on June 21, regulations supporting the implementation of the Act were published on July 11. The regulations include the Cannabis Regulations and the Industrial Hemp Regulations, among others, and they will come into force, together with the Act, on October 17.

The Cannabis Regulations add 218 pages of detail to the basic cannabis legalization framework established by the Act. Though Health Canada implementation policies and guidance, and application forms, remain to be issued, prospective cannabis licensees are now in a position to determine what classes of licence (or what additional classes for current licensed producers) must be obtained to permit their desired cannabis business activities.

As most readers will know, where the desired activity is the retail sale of cannabis for recreational purposes, provincial legislation will dictate what opportunities are available to industry participants. This article focuses on federal licenses to be issued by Health Canada for the following activities:

  1. Cultivation and processing of cannabis;
  2. Sale of cannabis (to end users for medical purposes, and amongst industry participants);
  3. Analytical testing of and research relating to cannabis; and
  4. Import and export of cannabis.

The article will also address what will happen to licences held by the 112 businesses holding a licence issued under the Access to Cannabis for Medical Purposes Regulations ("ACMPR") and the much larger group of current ACMPR licence applicants.

Note that references to cannabis in this article do not include industrial hemp. Authorizations and licences for industrial hemp will be discussed in a future newsletter.


To understand what activities are permitted to each class of cannabis licensee it is useful to know what specific forms of cannabis are permitted (and to be aware of the terminology used) under the Act and Cannabis Regulations:

  • Five classes of cannabis. The Cannabis Regulations treat different forms of cannabis in different fashion. Although the collective term "cannabis" is used for many purposes in the Act and Cannabis Regulations, certain licensing rules differentiate between the five distinct classes of cannabis and – importantly - no licensee is authorized to sell any cannabis product unless it is one of the authorized classes. Though the list of cannabis classes may expand over time as new permitted classes are introduced, the current authorized classes of cannabis are:

    1. Dried cannabis;
    2. Fresh cannabis;
    3. Cannabis oil;
    4. Cannabis plants; and
    5. Cannabis plant seeds.
  • Pre-sale cannabis versus packaged cannabis. The five classes of cannabis identified above are further distinguished in the Cannabis Regulations from what are referred to as "cannabis products." A cannabis product is cannabis of any authorized class that is packaged and labeled for retail sale (but excluding pharmaceutical cannabis drugs).


The Cannabis Regulations identify the following six licence categories:

  1. Cultivation
  2. Processing
  3. Analytical testing
  4. Research
  5. Sale for medical purposes
  6. Cannabis drugs

Standard cultivation licences will authorize the growing and harvesting of cannabis, including ancillary activities such as trimming and milling. Micro-cultivation or so-called "craft licences" will authorize the same activities, albeit subject to a 200 square meter canopy limit and lighter security requirements. Nursery cultivation licences will allow for the production of cannabis plants and seeds, but not dried cannabis, fresh cannabis or cannabis oil. Cultivation licences may also permit certain non-retail sale and distribution activities.

Standard processing licences will authorize holders to produce oils, which are not permitted under cultivation licences. Micro-processing licences will authorize similar activities. However, micro-processing licenceholders will be subject to a possession limit of 600 kilograms of dried cannabis (or the equivalent thereof in other classes of cannabis) in a single calendar year. The only exemption to this limit is if the micro-processor also holds a micro-cultivation licence in relation to the same site, and the cannabis held is exclusively from that site. Like cultivation licences, processing licences may permit certain non-retail sale and distribution activities.

Analytical testing licences authorize laboratories to conduct testing on cannabis as required by the Cannabis Regulations. The Cannabis Regulations require mandatory testing of each batch of cannabis (other than plants or seeds) that will become a retail-ready "cannabis product." The scope of mandatory testing includes testing for solvent residues, microbial and chemical contaminants that exceed generally accepted thresholds set out in the Food and Drugs Act, and cannabinoid quantities.

Research licences permit laboratories to conduct more general research relating to cannabis. These licences authorize a narrow range of activities (possession, production, transportation and sale) for research purposes only. As with cultivation and processing licences, holders of research licences may have a right to distribute cannabis to certain other industry participants.

Sale for medical purposes licences are a stand-alone licence category under the Cannabis Regulations. This licence class is distinguished from all other federally-authorized sale and distribution activities (i.e., between industry participants), which are treated as subsidiary authorizations that may be granted to holders of Cultivation, Processing, Research or Sale for Medical Purposes licences. The table below identifies the activities that may be permitted under each class of licence, including permissible non-retail sale activities.


The activities identified as permitted below will not invariably be authorized under each licence of the specified class. Rather, from the activities potentially permitted by the Cannabis Regulations, the applicant will have discretion to determine which are desired and Health Canada will have discretion to determine which will in fact be authorized.

As mentioned, the Cannabis Regulations treat cannabis products prepared for retail sale differently from the pre-sale cannabis of an authorized class (i.e., dried, fresh, oil, plants and seeds). The table below will refer to products as "PACKAGED" when referring to retail sale-ready cannabis products.

Licence sub-class

Permitted activities

Permitted sale activities


Standard cultivation

  • Possess cannabis
  • Cultivate dried, fresh, plants and seeds
  • Alter cannabis for testing purposes
  • Sell cannabis. See »
  • Sale of dried, fresh, plants and seeds to:

    • Licensees (any class)
    • Health Canada
    • Government laboratories
  • Sale of plants and seeds to:

    • Nursery licensees
  • Sale of PACKAGED plants and seeds to:

    • Sale (for medical purposes) licensees
    • Provincially-authorized retailers


Same as standard cultivation, but cultivation activities are subject to 200 square metre canopy limit

Same as standard cultivation


Same as standard cultivation, but cultivation of fresh or dried cannabis is prohibited

  • Sale of plants and seeds to:

    • Licensees (any class)
    • Health Canada
    • Government laboratories
  • Sale of PACKAGED plants and seeds directly to:

    • Sale licensees
    • Provincially-authorized retailers
  • Distribution of PACKAGED plants and seeds directly to consumers at the request of:

    • Sale licensees
    • Provincially-authorized retailers


Standard processing

  • Possess cannabis
  • Produce cannabis other than by cultivation, propagating or harvesting
  • Sell cannabis. See »
  • Sale of dried, fresh, plants, seeds and oil to:

    • Licensees (any class except cultivation)
  • Sale of dried, fresh, plants and seeds to:

    • Cultivation licensees
  • Sale of plants and seeds to:

    • Nursery licensees
  • Sale of PACKAGED cannabis products (any class) directly to, or delivery of cannabis products to consumers at the request of:

    • Sale licensees
    • Provincially-authorized retailers


Same as standard processing, but production of cannabis by synthesis is prohibited

Same as standard processing


Licence for sale for medical purposes

  • Possess PACKAGED cannabis
  • Sell PACKAGED cannabis products. See »
  • Sale of PACKAGED cannabis products (any class) to:

    • Licensees (any class except cultivation)
    • Health Canada
    • Medical patients or other individuals exempted under Section 140 of the Act
  • Sale of PACKAGED dried, fresh, plants and seeds to cultivation licensees
  • Sale of PACKAGED plants and seeds to nursery licensees
  • Sale of PACKAGED dried, fresh and oil to hospital employees for medical purposes



  • Possess cannabis
  • Obtain cannabis by altering its chemical or physical properties

No sale activities permitted



  • Possess cannabis
  • Produce cannabis
  • Transport cannabis between research sites
  • Sell cannabis. See »
  • Sale of plants and seeds to:

    • Holders of cultivation, research and cannabis drug licences only
    • Health Canada

Cannabis drug licences under the Cannabis Regulations authorize pharmaceutical drugs containing cannabis for medical purposes. Such drugs will be subject to both the Cannabis Act and the Food and Drugs Act. Furthermore, and unlike the ACMPR, the Regulations contain provisions relating to cannabis drugs for veterinary use. Holders of a cannabis drug licence are authorized to possess cannabis and manufacture or sell and distribute a drug containing cannabis.


Cannabis may only be imported or exported by licensees for medical or scientific purposes. In addition to holding an appropriate cannabis licence under the Act, licensees must obtain an import or export permit in order to permit such activities for the limited permitted purposes.


The Access to Cannabis for Medical Purposes Regulations made under the Controlled Drugs and Substances Act will be repealed on October 17, 2018. However, the ACMPR will be concurrently resurrected as Part 14 of the Cannabis Regulations.

Under the transitional provisions of the Cannabis Regulations, licences issued under the former ACMPR are automatically deemed to be licences under the Act and applications under the ACMPR to be applications for a licence under the Act. The specific sub-class of cannabis licence into which the ACMPR licence will convert will depend on which Cannabis Regulation sub-class captures the authorizations given (or applied for) in the ACMPR licence (or application). The table below summarizes the conversion metric for ACMPR licensees and applicants.

ACMPR licence

Cannabis Act licence

Possible Cannabis Act licence sub-class

Licence authorizing the production of fresh or dried cannabis, or cannabis plants or seeds

Cultivation licence

Standard cultivation licence

Micro-cultivation licence

Nursery licence

Licence authorizing the production of cannabis oil or cannabis resin

Processing licence

Standard processing licence

Micro-processing licence

Licence authorizing sale of cannabis plants, seeds, fresh or dried cannabis, or cannabis oil to medical users, etc.

Licence for sale

Licence for sale for medical purposes


Cannabis licence applicants should also be aware that any business cultivating, producing or packaging cannabis will be required to be obtain a cannabis licence from Canada Revenue Agency. More information is available on CRA's website, accessible here: CRA Cannabis Licence.

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.

Jeremy Burke
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