Health Canada Announces Significant Changes to Cannabis Licensing Process

Cannabis licensing applicants in Canada had previously been able to advance their applications and obtain some comfort regarding licensing before spending capital on production facilities. Many applicants raised significant amounts of capital on the basis of a license application.

Going forward, Health Canada will require prospective applicants for cannabis cultivation, processing or medical sales licences to have fully built and regulatory-compliant facilities before it will review and process their licence applications.

Health Canada will conduct a high-level review of existing applications. If this initial review is satisfactory, the full application will be reviewed in greater detail on a priority basis according to its original application date.

Health Canada has stated that it expects this change to address the supply shortages being experienced. However, some commentators expect this change may exacerbate those supply shortages by making it more difficult for new producers to enter the market. Regardless, it is likely that this new approach will impact the development of Canada’s cannabis industry and related capital markets activity.

DISCLAIMER: This post is intended to convey general information about legal issues and developments as of the date above. It does not constitute legal advice and must not be treated or relied on as such.