How to Become a Licensed Cannabis Producer in B.C.

Review land use requirements in your area

Whether you want to produce cannabis on an existing site that you own or lease, or whether you want to purchase or lease a new site, it's important to engage with your applicable local government or Indigenous nation as early as possible in the planning stages of your proposal. This will help you understand and comply with all local requirements.

As a first step, research the land-use planning and zoning bylaws of your applicable local government or Indigenous nation to ensure the land you are interested in using is appropriately zoned for cannabis production.

B.C. offers interactive maps that can help you identify local governments and Indigenous nations that might have land-use planning and zoning bylaws that apply to your proposed site. Refer to section 7(4) of the federal Cannabis Regulations and section 1 of the provincial Cannabis Control and Licensing Act for specific definitions of these entities.

Many local governments and Indigenous nations have online resources on land-use planning. You can also call or email them directly if you have questions about what requirements apply to your proposed site. If your proposed site is on treaty or reserve lands, the Indigenous nation can advise you of additional requirements that might apply to your business.

Also refer to CivicInfo BC, which is British Columbia's local government information hub.

For more detailed information about working with your applicable local government or Indigenous nation, as well as information about growing on B.C.'s Agricultural Land Reserve (ALR), see Section 3 of this how-to guide.

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Review guidance from Health Canada:

• Cannabis Licensing Application Guide
• Physical Security Measures Guide
• Good Production Practices Guide
• Security Clearances under the Cannabis Act and Regulations
• Cannabis Fees Order Guide

To grow cannabis, you’ll need a standard cultivation licence and/or a nursery licence from Health Canada. If you intend to grow on a small scale (under 200 square metres), you can apply for a micro-cultivation licence instead.

To manufacture, package and/or label cannabis products, you’ll need a standard processing licence from Health Canada. However, you can apply for a micro-processing licence instead if you intend to process less than the equivalent of 600kg of dried cannabis each year.

If you intend to sell your products directly to authorized medical patients, you can also apply for a medical sales licence from Health Canada. Both micro and standard licence holders are eligible to apply for a medical sales licence.

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For Indigenous affiliated businesses: engage with Health Canada's Indigenous Navigator and Licensing Service

For Indigenous affiliated applicants, Health Canada offers a dedicated Indigenous Navigator and Licensing Service. The Navigator Service provides applicants with ongoing support throughout the federal licensing process for cannabis production.

Indigenous affiliation can include any person or persons of First Nation, Inuit and/or Métis descent or any community, corporation or business associated with a First Nation, Inuit and Métis government, organization or community.

Self-identified Indigenous affiliated applicants who wish to become a cannabis production licence holder will be referred to a dedicated professional who is knowledgeable about Indigenous priorities, communities and circumstances.

Refer to the Health Canada Application Guide (section 7) for more information. Indigenous affiliated applicants can contact Health Canada’s navigator service to learn more at: navig@canada.ca

Conduct market research and develop a business plan

All businesses face risks and opportunities. For businesses in highly-regulated industries like cannabis, it's especially important to have a well-developed plan to ensure your business can adapt to changing market conditions and regulations so that it is successful over the long term.

Business planning and development supports are provided by Small Business BC, which offers a range of resources and business advising services that include market research, accounting and budgeting, business law, HR, and more.

Read B.C.’s Starting a Small Business Guide and find information on other programs and supports in the Small Business Resources Handout. B.C. also offers a dedicated guide on Indigenous Small Business Resources.

The Business Development Bank of Canada (BDC) provides online business planning and development resources, and entrepreneurs in rural regions can also access free services through Community Futures.

Indigenous business advisory centres in Cranbrook, Fort St. John and Prince George help Indigenous entrepreneurs with business start-up or expansion, partnerships, and planning. These centres ensure that Indigenous entrepreneurs have access to business support and advice to help them reach their business goals. Indigenous-affiliated businesses are also encouraged to review the services provided by the Indigenous Business and Investment Council.

If your business is based in the Central Kootenay region, you may also qualify for free advising services through the Community Futures Cannabis Business Transition Initiative.

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Register your business

Health Canada will receive cannabis production applications from the following types of registered business entities:

• Sole proprietorships and partnerships
• Co-operatives
• Incorporated businesses

Note: you may create a federal co-operative or a federally incorporated business instead if you plan on conducting operations in multiple provinces and/or you want to protect your business name across Canada.

Not sure what type of business registration is right for you? Check out Small Business BC's resource on How to Choose the Right Business Structure for Your Small Business. Also refer to Small Business BC's Frequently Asked Questions about business registrations.

To register your business, use OneStop. OneStop lets you apply for and complete registrations for a new or existing business with local, provincial and federal governments.

Certain Indigenous nations also have the power to make by-laws to register business entities, however OneStop might not include all results. In these cases, make sure to ask the applicable Indigenous nation about their business registration requirements and processes.

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Identify when you need to obtain a municipal business licence

In the majority of cases, you will be required to obtain a business licence from your applicable local government. Ask your local government if, and when, you are required to apply for a business licence.

You can initiate the process to obtain a business licence directly through OneStop, and B.C.’s BizPaL service helps you identify the permits and licences you may require from all levels of government when starting or operating your business.

Indigenous nations also often require that you obtain a business licence, however OneStop and BizPal might not include all results. In these cases, make sure to ask the applicable Indigenous nation about their business licensing requirements and processes. 

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Review sources of financing to obtain project site (as applicable)

Your ability to access financing is affected by many factors, including but not limited to: your facility’s size, growing and/or processing technique, credit history, business model, corporate structure, region, and the dynamics of the cannabis commodity market.

Accessing funds from traditional banks and other lending institutions can be challenging. As with any new business venture, you will need to demonstrate to any lender that your ability to generate stable revenues outweighs any downside risk, such as defaulting on a loan.

Lending institutions will look to reduce financial risk and uncertainty by asking you to provide adequate collateral on loans. You can expect to provide personal guarantees and to provide assets, such as real estate equity, as security on loans. In many cases you'll be asked to provide assets worth the equivalent to 100% (or more) of the loan amount being requested.

Tip: some successful cannabis production licence holders in B.C. and Canada have chosen to build their sites in multiple stages. This strategy can help prospective licence-holders lower their debt burden at the time of initial licensing, as it can allow them to become operational first, with profits reinvested into further expansion in future years. Health Canada allows for licence amendments to support business scale-up. Keep in mind that if you transition from a micro licence to a standard licence, new regulatory requirements (such as physical security upgrades) will apply, and higher annual regulatory fees will also likely apply. You'll also need to ensure that you comply with zoning and business licensing requirements.

Your cannabis business may be able to access alternative financing through the Community Futures business loan program. More information about loans, grants, and funding is available from WorkBC. Indigenous-affiliated businesses in B.C. are encouraged to review the Government of Canada’s Community Opportunity Readiness Program.

Review guidance on cannabis production in the Agricultural Land Reserve (as applicable)

To find out if your proposed site is in the Agricultural Land Reserve (ALR), refer to these maps and resources.

Cannabis production is permitted in the ALR as long as you comply with applicable laws and local government bylaws. A local government cannot prohibit cannabis production in the ALR if that production complies with any applicable bylaws and is grown:

• in an open field
• in a structure that has a base consisting entirely of soil
• in a structure that was either fully constructed or under construction without interruption for the purpose of growing crops (including cannabis) inside of it, in accordance with all required authorizations and laws, prior to July 13, 2018 (note: the structure cannot be altered to increase the size of its base or change the material used as its base).

If your proposed site is located on ALR land, some local governments and Indigenous nations may prohibit cannabis production methods not listed above. This includes, but is not limited to, cement-based, industrial-style cannabis production facilities. The Township of Langley, Abbotsford, Delta and Kelowna may prohibit cannabis production on the ALR, but only with the approval of the Minister of Agriculture.

For information on how to identify and engage with your local government or Indigenous nation, refer to Section 1 of this how-to guide.

For cannabis production in the ALR, non-farm use applications to the Agricultural Land Commission (ALC) are not required. However, it is likely that you will be required to submit a Notice of Intent to the ALC if your facility requires fill placement or soil removal from the property.

For more information about growing cannabis on the ALR, please review the Agricultural Land Reserve Use Regulation. For additional information on when you may be required to engage with the ALC, refer to the ALC’s Information Bulletin on cannabis production in the ALR.

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Confirm available utilities for proposed project site

Once you understand local land use requirements, you'll need to confirm your proposed site has access to all required utilities such as electricity, gas, and water.

If your proposed site does not have access to a potable water system and a wastewater system (such as septic), you'll need to develop your own water systems in compliance with the Drinking Water Protection Act and the Public Health Act respectively.

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Evaluate soil quality and growing climate of proposed site (if applicable)

If you are planning on growing cannabis outdoors or in a soil-based greenhouse, you'll also need to confirm the soil on your proposed site is ideal for the crops you wish to cultivate. You may wish to professionally test the soil quality of your proposed site to confirm it is appropriate for cannabis cultivation.

If applicable, also research the growing climate of your proposed site to ensure it is appropriate for cannabis cultivation.

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Conduct an environmental site assessment

An environmental site assessment will help you identify if the soil or groundwater of your proposed site is contaminated (for example, by petroleum, heavy metals, pesticides or herbicides) and whether any structures on the proposed site might have contaminants such as asbestos, lead paint or mould.

Identifying any potential issues before you commence operations helps you minimize your risk as a business owner. Refer to BDC's guide on environmental site assessments for more information.

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Purchase or lease project site (if applicable)

If you intend to purchase or lease a new site for the production of cannabis, ensure you have reviewed and fully understand your local government or Indigenous nation's land use regulations and planning prior to purchasing or leasing a site (this also applies if you intend to use a site that you already own or lease to produce cannabis).

If you have questions about land use and planning requirements, contact your applicable local government or Indigenous nation directly to discuss your land use proposal (see Section 1 of this how-to guide). 

If you intend to buy a commercial building, refer to BDC's guidance on conducting due diligence before moving forward with a purchase.

If you are leasing a site, also ensure that the site owner, landlord and/or property manager fully understands your intended use of the site, and ensure your lease agreement is as specific and detailed as possible to provide certainty to all parties involved.

We also recommend you fully review Health Canada's requirements prior to purchasing or leasing a project site. See Section 1 and Section 6 of this how-to guide for more information.

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Develop site and facility plans

Depending on the type and scale of your proposed facility, you may need to work with a qualified structural engineer and/or architect to prepare plans for your cannabis production site. These plans may include, but are not limited to:

• Architectural drawings
• Structural drawings
• Civil drawings including erosion sediment control drawings
• Mechanical drawings
• Plumbing drawings
• Electrical drawings
• Landscape drawings
• Geotechnical report
• Alternative solutions to meet building compliance requirements
• Energy modelling report and design compliance verification

It is also recommended that you obtain cost estimates for your plans to ensure they fit within your budget and business planning developed in Section 2 of this how-to guide.

Tip: review our webinar on licensed small-scale cannabis cultivation to learn about low-cost strategies to enter the legal market.

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Schedule a pre-application meeting with planning department staff at your applicable local government or Indigenous nation

Depending on the nature and location of your proposed production facility, you may need to apply for a zoning amendment (rezoning), development permit, building permit, water use permit and/or other authorizations. See Section 1 of this guide for information on identifying and contacting your applicable local government or Indigenous nation to learn about specific land-use requirements.

A pre-application meeting with your local government or Indigenous nation allows you to discuss these requirements in more detail. At your pre-application meeting, bring in a proposal of your operations and land-use intentions, which can include your site and facility plans (see section above). 

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Secure development permit and/or building permit from your local government or Indigenous nation

Depending on your proposed operations and region, you will likely require a development permit and/or building permit from your local government or Indigenous nation. You may also be required to rezone your parcel of land or meet other requirements.

Note: while the licensing of cannabis cultivation and processing is a federal responsibility, local governments and Indigenous nations also have responsibility for making land use decisions that balance the interests of their communities and reflect the views of their residents.

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Obtain water licences and approvals

Provincial water licences or use approvals are required to divert, use or store surface water from streams or groundwater from aquifers, and when making changes in and around streams. Refer to guidance on provincial water licensing to learn more.

Water suppliers or purveyors, such as local governments, Indigenous nations, or water utilities, may also have additional rules, regulations and requirements for water use and related works. Ensure that the water volumes you need can be provided from the water supplier. These requirements can be identified at your pre-application meeting (see above section).

If you intend to use water from a source not regulated as a water supply system under the Drinking Water Protection Act, and the water will be used for domestic purposes, you will need to apply to your local health authority for a construction and operating permit under the Act. Refer to B.C.'s resource on drinking water quality for more information.

Note: If the source of water for your operation is not supplied by a local government, Indigenous nation or other regulated water supplier or purveyor, Health Canada will require you to provide evidence that the water (including water quality and works) is appropriate for the activity being conducted (such as water for irrigation, sanitation, or processing).

Identify the wastes (including solid and liquid wastes, and air emissions) your operation will generate and determine how these wastes will be managed

Cannabis cultivation and processing generates solid and liquid waste, and air emissions. The BC Environmental Management Act (EMA) requires operations to manage waste in a way that protects human health and the environment.

In your business planning, identify and characterize the wastes that your operation will generate (type and volume) and how it will be managed. A report on best available control technologies for the cannabis industry can help you decide which technologies or approaches to adopt.

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Secure a waste discharge permit and/or understand what requirements under the Environmental Management Act apply

Depending on the wastes discharged and what operations you plan to carry out, your business may be required to follow a regulation and/or require a permit under the EMA.

Growing cannabis falls within the definition of an agricultural operation under the Code of Practice for Agricultural Environmental Management (AEM Code). You are required to follow the AEM Code for activities such as storing plant material that is a by-product of cannabis plant growing, agricultural composting of such by-products or storing the resulting agriculturally-composted material, or applying it to land. Familiarize yourself with the requirements of the AEM Code and be aware of which rules apply to your operation.

If you are processing cannabis:

• Waste from the processing of cannabis oils (such as spent solvents) may be subject to the Hazardous Waste Regulation. It is your responsibility to characterize the waste to determine whether it meets the definition of hazardous waste.
• You may also require a waste discharge permit for air emissions or solid and liquid waste discharged into the environment. Ministry of Environment and Climate Change Strategy staff can assist you in determining whether a permit is required.
• If you combine the wastes from the growing operation with the processing operation, these must be managed as processing wastes. 

Your applicable local government or Indigenous nation may also have policies related to the discharge of wastes and/or emissions, including bylaws regulating disposal of waste to sewers and solid waste systems. Ensure that you are aware of any additional waste discharge regulations that may affect your business, and contact the applicable local government or Indigenous nation directly if you have any questions.

Secure financing to implement land improvements and construction of facility (as applicable)

Refer to Section 2 of this how-to guide for detailed information related to obtaining financing.

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Select contractors (if needed)

If you're building a new facility or retrofitting an existing structure, research the available and qualified contractors in your area.

Depending on the nature of your project site, you may need to hire tradespeople in any of the following fields:

• Excavation
• Concrete pouring
• Greenhouse/indoor facility construction
• Utilities (such as electricity, gas, water, sewage)
• Heating, ventilation, and air conditioning (HVAC)
• Fire sprinkler installation
• Water and air filtration systems
• Grow lighting (such as LED technology)
• Physical security infrastructure
• Video surveillance systems
• Computer and internet systems
• Data management and inventory tracking systems
• Specialized cultivation and/or processing equipment installation
• Packaging and labelling equipment installation

Note: your applicable local government or Indigenous nation may require you to obtain separate trades permits. All work completed will need to be inspected at various stages of construction.

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Construct/retrofit facility to specification and security requirements

Fully review Health Canada's requirements prior to constructing/retrofitting your project site. See Section 1 and Section 6 of this how-to guide for more information.

As of May 8, 2019, new applicants for licences to cultivate or process cannabis are required to have a fully built site that meets all the requirements of the federal Cannabis Regulations at the time of their Health Canada application, as well as satisfying other application criteria. This requirement applies to both standard-class and micro-class licence applicants.

Health Canada will continue to provide dedicated support to Indigenous-affiliated applicants through its Indigenous Navigator and Licensing Service. See Section 1 of this how-to guide for more information.

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Obtain occupancy permit (as applicable)

After you pass a final inspection, your local government or Indigenous nation may require you to obtain an occupancy permit. Occupancy permits ensure that buildings comply with relevant bylaws and codes and ensure that buildings are safe for people to use.

Ensure you understand all Health Canada requirements before you apply

Ensure you fully understand and are prepared to meet all Health Canada requirements before submitting your application. Deficiencies in your application can lead to delays or a rejection of your application. See Section 1 of this how-to guide for more information.

You should also review the Getting Started Guide for the Cannabis Tracking and Licensing System (CTLS) at this stage to familiarize yourself with the application system.

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Create accounts in the Cannabis Tracking and Licensing System (CTLS)

The first step to create an application is to set up an individual user account in the CTLS (for the individual applicant or the person who will be submitting the application for an organization).

The second step is for associated individuals to create accounts in the CTLS. User accounts are required for a number of individuals associated with an application.  

Note: applicants that are partnerships, cooperatives, and corporations (any applicant that is not an individual/sole proprietor) also need to create a corporate profile.

Refer to Section 5 of the Health Canada Cannabis Licensing Application Guide for more information on creating accounts in the CTLS.

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Submit security clearance application(s)

As part of your CTLS application, you'll need to ensure that key personnel involved in your company undergo security screening. Note that not all staff involved in your business are required to undergo security screening. Refer to the federal government's resource on who needs a security check for more information.

The CTLS requires that individuals who require a security clearance submit their security clearance application form before a licence application can be submitted in the CTLS. As such, the licence applicant may wish to have these individuals obtain their criminal record checks and apply for their security clearance, if applicable, as soon as feasible. All key personnel affiliated with the licence application must create their own individual accounts in the CTLS before an application can be submitted to Health Canada.

For security clearance applications associated with a new licence application, the overall licence application must pass Health Canada’s initial screening stage of the application process before security clearance applications will be reviewed. A Health Canada licence will not be issued unless required security clearances have been granted.

The security clearance fee is $1,654 per security clearance application and is non-refundable.

Refer to the federal government's guide on Security Clearances under the Cannabis Act and Regulations and Appendix C of the Application Guide for more information.

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Provide notice to local authorities of intention to file for a licence

Health Canada requires you to provide proof that you notified your local authorities, in writing, of your intention to file for a federal licence. Local authorities are able to provide a direct response to Health Canada on whether an application complies with relevant bylaws and policies, and local authorities may also provide summary of any public input to Health Canada.

Local authorities to be notified include:

• Your local government or Indigenous nation
• Your local fire authority
• Your local police force or RCMP detachment

Contact your local government or Indigenous nation for guidance on how to provide written notice to local authorities in your area. For information on how to identify and engage with your local government or Indigenous nation, refer to Section 1 of this how-to guide.

As a general guide, you may need to include in your notification letter:

• Name, address, and signature of owner(s)
• Current Certificate of Title
• The legal description and street address of the property
• Plans and details of the proposal (such as site plans, floor plans, signage details, number of parking stalls, hours of operation)
• A community impact statement that outlines the cannabis production facility’s positive impacts as well as potential negative impacts and measures taken to address them
• A map showing any sensitive sites (such as schools and child care facilities) within a prescribed distance of your property
• Applicable fees
• Any other information requested by your local government or Indigenous nation

Contact your local government or Indigenous nation directly if you have questions about what to include in your notification letter.

See “Notices to Local Authorities” in the Application Guide (section 6.7) for more information.

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Develop a security plan for your organization and ensure your facility meets physical security requirements

As part of your CTLS application, you'll need to develop an Organizational Security Plan that includes your business plan, organizational chart, cannabis tracking protocols, security training for staff, and other security measures. You will also need to develop Standard Operating Procedures (SOPs) that allow you to prevent, detect and respond to potential security incidents. For more information related to Organizational Security Plans and Standard Operating Procedures, refer to the Application Guide (section 6.8) and Appendix D.

You will also need to ensure your project site meets physical security requirements. The requirements differ depending on whether you are cultivating or processing, as well as the size of your site. Regardless of whether you are applying for a micro licence or standard licence, you will need to submit a site plan, visual site evidence and other information.

See the Application Guide (section 6.8) and the Physical Security Measures Guide for Cannabis for more information.

Note: Due to limitations on file size within the CTLS, visual site evidence must be submitted to Health Canada outside of the CTLS. Refer to the Application Guide (section 7) for more information.

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Develop a Good Production Practices report

Good Production Practices (GPPs) are part of the quality assurance that ensures cannabis is consistently produced and controlled in a way that meets federal quality standards. Your GPP report will need to detail:

• Product storage procedures
• Materials used in your building
• Filtration and ventilation systems
• Supply of water
• Lighting
• Sanitation protocols

Standard Operating Procedures (SOPs) will need to be developed that include all steps necessary to be in compliance with good production practices. SOPs help your business avoid negative impacts on the quality of the cannabis being produced (such as cannabis or an ingredient becoming contaminated, or external substances being accidentally added to the cannabis).

For more information, refer to the Application Guide (section 6.9) and the Good Production Practices Guide for Cannabis. B.C. also has dedicated guidance on good production practices for indoor and outdoor micro-cultivation.

You are also required to provide visual evidence highlighting GPP features of your building, as well as the types of starting material (such as plants or seeds) and authorized source of this material (such as a federally authorized licence holder or authorized foreign source).

Note: due to limitations on file size within the CTLS, visual GPP evidence must be submitted to Health Canada outside of the CTLS. Refer to the Application Guide (section 7) for more information.

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Prepare key investor reports (as applicable)

If you have investors in your business, you will need to provide information about them as part of your application.

Note: if you do not have any investors in your business, you do not need to prepare key investor reports but will need to complete an attestation that confirms the information is accurate. If your businesses trades its shares on a public market (a stock exchange), then you also do not need to prepare key investor reports.

Refer to the Application Guide (section 6.10) for more information.

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Apply for a Health Canada production licence

To apply for a Health Canada cannabis production licence, submit all required documentation via the Government of Canada's Cannabis Tracking and Licensing System (CTLS) portal.

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Submit your visual site evidence package to Health Canada

Following your application to the CTLS (above), you must submit a visual evidence package that demonstrates how you meet physical security requirements and Good Production Practices (GPPs) directly to Health Canada via a USB storage device.

Visual evidence package submissions must be received by Health Canada within 10 business days following the submission of your application in the CTLS. Applicants who do not submit their site evidence package within this timeframe may have their application refused as incomplete.

See Section 7 of the Health Canada application guide for more information.

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Pay application screening and security clearance fees

Application screening fees are calculated as follows:

• $3,277 per application for standard cultivation, standard processing, and sale for medical purposes licences
• $1,638 per application for micro-cultivation, micro-processing, and nursery licences

The security clearance fee costs $1,654 per security clearance application.

Health Canada will send you an invoice when it receives your application. Fees will be specified on the invoice issued by Health Canada. Please wait to receive Health Canada's invoice before sending payment. Do not send your payment with your application. Once the invoice is paid in full, Health Canada will begin processing your application.

For more information, refer to Section 7 of the Health Canada application guide, the Cannabis Fees Order Guide, and Fee Payments under the Cannabis Fees Order.

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Prepare for a potential on-site pre-licence inspection

An on-site pre-licence inspection by Health Canada inspectors may be deemed necessary prior to further licensing decisions. If an inspection is required, the inspection team will contact the applicant.

In the case where an on-site pre-licence inspection is not required, the licence issuance will be based on the information submitted to Health Canada.

For more information, refer to Section 7.2 of the Health Canada application guide.

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Respond to any requests for more information

If information submitted as part of your application is unclear or requires further detail to show how it meets the requirements, Health Canada may require you to submit additional information.

Your responses should be comprehensive and comment on each of the elements noted in the request for more information. It is important to be as detailed as possible when addressing each section. Incomplete responses may delay licence processing or lead to a refusal to consider an application.

Note: you must respond by email, generally within 10 business days of the request. It is not a requirement to retain the services of a third party (such as a consultant) to prepare responses to Health Canada.

For more information, refer to Section 7.3 of the Health Canada application guide.

Apply for a Cannabis Licence from the Canada Revenue Agency (CRA)

Cultivators, processors and packagers must apply for a cannabis licence from the CRA (some eligibility requirements and exceptions apply).

Note: you should apply for a CRA Cannabis Licence at the same time you apply for a Health Canada production licence. It normally takes the CRA 30 days to approve a licence application, which is conditional on receiving a Health Canada licence first.

Licence-holders are required to post a financial security to the CRA. For licence applicants who will not be packaging cannabis products and will only be cultivating or producing cannabis products, the amount of financial security required is $5,000. The maximum security amount is $5 million for cannabis licensees who package cannabis products. There are no fees related to the application for or the issuance of a CRA cannabis licence itself.

For more information, refer to the following guidance from CRA:

• EDN52: Obtaining and Renewing a Cannabis Licence
• EDN53: General Information for Cultivators, Producers and Packagers of Cannabis Products

If you have specific questions on how to calculate the security amount for your business, send an email to cannabis@cra-arc.gc.ca

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Register for the cannabis stamping regime (only applies to processors that intend to package products)

Cannabis licence-holders that package cannabis products must affix cannabis excise stamps to the packaging of cannabis products intended for retail sale in Canada. Refer to the CRA's guidance on registering for the cannabis stamping regime.

Note: low-THC cannabis products, prescription cannabis drugs, and cannabis products intended for export are not required to be stamped. Only cannabis for medical and scientific purposes can be exported.

For more information, refer to the following guidance from CRA:

• EDN54: General Overview of the Cannabis Excise Stamps
• EDN55: Calculation of Cannabis Duty and Additional Cannabis Duty on Cannabis Products
• EDN60: Calculation of Cannabis Duty and Additional Cannabis Duty on Cannabis Oil, Edible Cannabis, Cannabis Extracts and Cannabis Topicals

Refer to CRA’s excise duty framework for cannabis for more information.

Register for WorkSafeBC insurance

If you intend to hire workers, you will need to obtain WorkSafeBC insurance, which provides protection for employers and provides benefits for workers who suffer a work-related injury or illness.

Independent business operators (for example, an exclusive owner of a business) are not automatically covered by WorkSafeBC. If eligible, you can purchase Personal Optional Protection (POP) coverage, which is optional workplace disability insurance. POP will pay health care, wage-loss, and rehabilitation benefits if you are injured at work. 

Tip: you can register for WorkSafeBC insurance through your OneStop account created in Section 2 of this how-to guide.

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Obtain Commercial General Liability Insurance

In addition to your WorkSafeBC insurance, you'll need to ensure your business is protected against other liabilities, such as property damage and other types of potential harm. Commercial General Liability coverage can help ensure your business is fully protected from a variety of risks.

Tip: consult directly with an insurance provider to discuss the specific needs of your business. When searching for insurance, make sure that you inform the insurance provider that you are federally licensed to produce cannabis. 

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Obtain Product Recall and Product Contamination Insurance

A product recall is intended to minimize the risk associated with a problem or potential problem with a cannabis product by removing it from the supply chain and providing important health and safety information to the public.

Product recall insurance is sometimes included in a Commercial General Liability policy, but not always. It’s important to double check with your insurer that your insurance coverage does protect you from risks associated with product recalls.

Refer to Health Canada's guide on cannabis recalls for more information about your obligations as a licensed producer.

For more information about the specific insurance requirements of B.C.'s cannabis wholesaler, the Liquor Distribution Branch (LDB), refer to Section 10 of this how-to guide.

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Register to collect and remit Goods & Services Tax

The federal Goods and Services Tax (GST) applies broadly to business transactions, including:

• Sales between licensed producers (such as a cultivator selling to a processor)
• Wholesale transactions (such as a processor selling to a provincially-authorized distributor like the B.C. Liquor Distribution Branch)
• Direct-to-consumer transactions (such as medical sales)

You must have received your Health Canada and CRA licences before registering for GST.

Tip: you can register to collect and remit GST through your OneStop account created in Section 2 of this how-to guide.

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Register to collect and remit Provincial Sales Tax (if applicable)

If you only intend to sell cannabis products at wholesale (for example, to another licensed producer or to a provincially-authorized distributor such as the B.C. Liquor Distribution Branch), you are not required to register to collect and remit Provincial Sales Tax (PST).

Licensed cannabis producers are exempt from paying PST on goods obtained solely for resale. This means that purchases of cannabis used for processing or incorporating into other goods are exempt from PST. To purchase these goods exempt from PST,  provide your supplier with a completed Certificate of Exemption, or register for PST and give your supplier your PST number.

Note: licensed cannabis producers that intend to sell directly to consumers (such as medical sales) are required to register to collect and remit PST. You must have received your Health Canada and CRA licences before registering for PST.

Refer to B.C.'s resource on cannabis and PST for more information.

Tip: you can register to collect and remit PST through your OneStop account created in Section 2 of this how-to guide.

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Register for payroll deductions and import/export accounts with the Canada Revenue Agency (if applicable)

You can register for payroll deductions and import/export accounts through your OneStop account created in Section 2 of this how-to guide.

Notify local authorities when your Health Canada licence is issued

Once your Health Canada licence has been issued, you are required to provide written notice to a senior official at your local government or Indigenous nation, your local fire authority, and your local police force or RCMP detachment within 30 calendar days.

Contact your local government or Indigenous nation for guidance on how to notify local authorities in your area. For information on how to identify and engage with your applicable local government or Indigenous nation, refer to Section 1 of this how-to guide.

For more information, see "Notice to Local Authorities" in Health Canada's Cannabis Licence Management Guide.

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Onboard staff

You'll need to ensure that all staff that were required to undergo federal security screening through your Health Canada licence application have been cleared before they work for your business. Refer to Section 6 of this how-to guide for more details.

Note: not all staff involved in your business are required to undergo security screening. Refer to the federal government's "who needs a security check?" resource for more information. You can also refer to the federal government's guide on Security Clearances under the Cannabis Act and Regulations.

As an employer in B.C., you are required to comply with employment standards relating to hiring employees, wages, vacation entitlement, break schedules, overtime, and more. When you are ready to staff up your business, WorkBC Centres located across the province can support you in finding qualified people to join your team.

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Commence cultivation and/or processing operations

You can only start to produce authorized forms of cannabis after you receive licences from both Health Canada and the Canada Revenue Agency, as well as required licences/permits from the B.C. Government and your local government or Indigenous nation.

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Test product(s) to ensure adherence to Health Canada quality and safety standards

Licensed processors are required to test each lot or batch of products before selling to authorized cannabis distributors. Health Canada does not require licensed cultivators to test products for sale to processors; however, as a best practice, cultivators may wish to test their products as well so that any potential quality issues can be detected and resolved early on.

Refer to the federal government's guide on mandatory cannabis testing for pesticide active ingredients and Appendix B of the Health Canada Cannabis Licensing Guide for more information.

See also the full list of laboratories authorized to conduct analytical testing of cannabis products in B.C.

Check out B.C.'s resource on Integrated Pest Management for Commercial Cannabis in B.C. The Government of Canada also provides information on authorized pest control products for use on cannabis.

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For processors only: file for a licence amendment to add sale of additional classes of cannabis

Once your processing licence is issued, Health Canada will initially allow you to sell only cannabis plants and seeds to provincially-authorized distributors like B.C.'s Liquor Distribution Branch.

You will need to submit an amendment application to change the conditions on your licence, which will authorize you to sell the following additional classes of cannabis to provincially-authorized distributors:

• Dried and/or fresh cannabis
• Cannabis topicals
• Cannabis extracts
• Edible cannabis

Refer to "Sales Activities for Processing Licences" in Health Canada's Cannabis Licensing Management Guide for more information.

Note: if you amend your licence, you are required to notify a senior official at your local government or Indigenous nation, your local fire authority, and your local police force or RCMP detachment within 30 calendar days. For more information, see "Notice to Local Authorities" in Health Canada's Cannabis Licence Management Guide.

Obtain proof of insurance

If you intend for your products to be sold by authorized retailers in B.C., you'll need to demonstrate you're fully insured against a variety of risks.

In B.C., the Liquor Distribution Branch (LDB) is the provincial wholesale distributor of non-medical cannabis products. The LDB supplies public BC Cannabis Stores and licensed private cannabis retail outlets.

Before entering into an agreement to supply your products to the LDB, you are required to demonstrate you possess the following types of insurance:

1. Commercial general liability insurance
2. Product recall and product contamination insurance

Note: LDB requires businesses to have minimum liability coverage for the above categories. This requirement applies to both standard producers and micro producers. You can contact the LDB at cannabis.vendor@bcldb.com for current information on the minimum coverage amounts that you’ll need.

See Section 8 of this how-to guide for details about how to become fully insured.

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Enter into a supply agreement with an authorized wholesaler in Canada (or directly to retailers, if permitted in the destination province or territory)

To get your products to market, refer to the following provisions outlined by Health Canada:

• Licensed cultivators (both micro and standard) may sell plants and seeds to provincial/territorial authorized distributors (if authorized by your specific Health Canada licence)
• Licensed processors (both micro and standard) may sell plants and seeds, fresh and dried flower, and oils, extracts, edibles and topicals to provincial/territorial authorized distributors (if authorized by your specific Health Canada licence)

In most circumstances, you will need a Health Canada processing licence to supply your product directly to B.C.'s LDB. However, if you are cultivating products only and do not have a processing licence, you can ship your products to a licensed processor to get your products ready for distribution.

Note: you can engage with the LDB on becoming a supplier before you have received your Health Canada processing licence. Here are a few guidelines:

• You should be in the final stages of receiving your Health Canada processing licence before engaging with the LDB (typically within four weeks of the anticipated date of your licence being issued)
• You will need to be fully licensed by the federal government before any supply agreement with the LDB can be finalized
• Once you are fully licensed by the federal government, you can enter into a supply agreement with the LDB before you are ready to ship your products to the LDB's Distribution Centre

Receiving a federal licence is not a guarantee that you will be able to enter into a supply agreement with the LDB. The LDB considers market demand, supplier price and quality when making decisions about what products to purchase from licensed producers.

To learn more about wholesale cannabis requirements and doing business with the LDB, contact the Vendor Relations team at: cannabis.vendor@bcldb.com

Tip: if you are unable to enter into a supply agreement with the LDB, or you wish to ship your products to other regions of Canada, you can enter into supply agreements with authorized wholesalers in other provinces or territories (or directly with retailers, if permitted in the destination province or territory).

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Ship your products in accordance with regulatory and logistical requirements

Once a supply agreement is in place, you'll need to ship your products from the production site to a receiver (such as a processor, wholesaler, or retailer, depending on your business type and appropriate authorizations).

Shipping needs to be conducted securely. It is important that you fully understand the applicable regulatory requirements and the logistical requirements of your receiver. Ensure that you work closely with your receiver to clarify:

• Product registration and purchase order protocols
• Secure packaging of products in shipping cases and on pallets
• Scheduling of delivery appointments
• Acceptable temperature ranges
• Delivery documentation (such as shipping addresses, pallet counts, delivered quantities, product descriptions, SKU numbers, lot numbers)
• Other terms and conditions specific to the receiver

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Consider other market access opportunities

Depending on the provisions of your specific Health Canada licence, you may also be able to sell your products to other licence holders throughout Canada (such as other licensed cultivators, processors, researchers). For example, if you only hold a cultivation licence, you are authorized to distribute certain unfinished products to licensed processors.

If you have a medical sales licence (in addition to your cultivation and/or processing licence) you can sell eligible products to registered medical consumers throughout Canada in accordance with Health Canada requirements.

You may also be able to apply for an international export permit for medical cannabis or cannabis for scientific purposes. Note that in addition to being fully licensed and in good standing with all regulatory agencies in Canada, to export products internationally you will need to be Good Manufacturing Practices (GMP) certified, which is an international quality assurance standard.

For a full list of authorized sales channels for each licence class, refer to Health Canada's Intra-Industry Sale and Distribution Guide, as well as Appendix B of the Health Canada Cannabis Licensing Guide.

Note: federal and provincial prohibitions are in place that restrict promotional activities. For more information, consult B.C.’s Handbook for the Marketing of Non-Medical Cannabis and the federal government’s fact sheet.

Develop an internal plan to ensure all reporting, payment and licensing obligations are consistently met

Timely, consistent and accurate reporting is essential to ensure you remain licensed and in good standing with governments and regulatory agencies. Note that licences have been revoked as a result of incorrect or insufficient reporting.

To ensure you stay on top of all required documentation, it is recommended that you develop an internal plan that outlines all individual and recurring dates where report submissions, payments and licence renewals are due.

Note: the federal government conducts routine audits and inspections of licensed cannabis producers. It is important that you measure and track the flow of goods, personnel and money to and from your business thoroughly and consistently.

Though not currently a requirement of licensed producers, you may consider using third-party seed-to-sale tracking software to assist with data collection and reporting.

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Commence monthly reporting to Health Canada

To fully understand your reporting obligations, refer to Health Canada's Cannabis Licence Management Guide and the Monthly Cannabis Tracking System Reporting Guide.

A full list of cannabis tracking system resources, including the Cannabis Tracking Reporting Form, is available through Health Canada. 

Note: Health Canada requires that you submit monthly reports into the Cannabis Tracking and Licensing System (CTLS).

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Commence monthly reporting and make applicable duty payments to the Canada Revenue Agency

All cannabis licence-holders must file monthly returns to report their inventories, and if applicable, sales and duty payable to the Canada Revenue Agency.

Your monthly return is due by the last day of the calendar month following your reporting period. You have to file a return even if you have no business transactions and/or no duty to remit.

Tip: as a cannabis licensee, you can file your return online through My Business Account.

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Remit any PST and GST collected to appropriate government agencies (as applicable)

If you have registered to collect PST (see Section 8 of this how-to guide to learn if this applies to your business), you can file and pay your PST tax returns online using eTaxBC, which is the easiest and fastest way to file your returns and pay your taxes.

Refer to the Canada Revenue Agency's guidance on remitting GST.

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Pay recurring utility and service bills

Ensure timely payment for all utilities and services your operation uses (like electricity, water, gas, sewer, waste disposal, telephone, internet).

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Calculate and pay annual regulatory fee to the federal government

The first installment of your annual regulatory fee for your site must be paid within 60 days of your Health Canada licence being issued.

In general, the annual regulatory fee is calculated on a per-site basis. This means that if you hold a cultivation licence and a processing licence, you do not pay double the annual fee.

Here's how to calculate the annual fee:

• If you have one or more standard licences, the minimum fee you are required to pay is $23,000. To calculate the specific fee your business must pay, multiply your cannabis revenue by 2.3%. If this figure is larger than the minimum fee, you are required to pay this amount instead.
• If you have one or more micro licences, the minimum fee you are required to pay is $2,500. To calculate the specific fee your business must pay, multiply your first $1 million of cannabis revenue by 1%. The fee rate for all revenues exceeding $1 million is 2.3%. If this combined figure is larger than the minimum fee, you are required to pay this amount instead.

You can find more information on how to calculate your annual regulatory fee via the federal government's Cannabis Fees Order guide.

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Submit annual income tax returns

Filing a corporate income tax return each year is a general requirement for most businesses in Canada. More information is available from the Canada Revenue Agency.

Note: if your business is a sole proprietorship (which is an unincorporated business owned by one individual), you report your business income as well as your personal income on your T1 income tax return.

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Pay annual property tax

If you own or lease property in B.C., property tax will need to be paid annually. Your local government or Indigenous nation will also be able to provide you with more information.

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Prepare for any potential product recalls, and conduct an annual recall simulation

A product recall is intended to minimize the risk associated with a problem or potential problem with a cannabis product by removing it from the supply chain and providing important health and safety information to the public. Refer to Health Canada's guide on product recalls for information on how to prepare for and execute a product recall.

Note: all licensed cultivators and processors must conduct a recall simulation (a mock recall) at least every 12 months in order to ensure a recall plan is effective. Licence holders are not required to notify Health Canada of the recall simulation, however Health Canada may request it at any time during an inspection. For more information, see Section 6.1 of the above guide.

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File post-licensing application(s) to Health Canada, including licence amendments and renewals, notifications, and applications for import or export permits (if applicable)

The ability to renew your Health Canada licence will appear in your Cannabis Tracking and Licensing System (CTLS) account four months before your licence expires, and you are encouraged to apply for renewal at that time. Note that licences are not automatically renewed.

If you amend your licence, you are required to provide written notice to a senior official at your local government or Indigenous nation, your local fire authority, and your local police force or RCMP detachment within 30 calendar days. This notification requirement also applies if you suspend or reinstate your licence, or if it is revoked.

Details can be found via Health Canada's Cannabis Licence Management Guide.

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Renew your Canada Revenue Agency (CRA) licence

A CRA cannabis licence is valid for a maximum of two years and is not automatically renewed. A cannabis licensee must renew their Cannabis Licence at least 30 days before the expiry date. For more information, refer to the CRA’s EDN52: Obtaining and Renewing a Cannabis Licence.

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Renew security clearances of key personnel

As a licence-holder, you should ensure that your security clearance, and the security clearances of your key personnel, are active. Individuals whose security clearances are close to expiring should apply to renew these as soon as possible. A minimum of six months in advance of the expiry is recommended, but some clearances may take longer.

For more information, refer to the federal government's guide on Security Clearances under the Cannabis Act and Regulations.

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Renew your business licence

Contact your local government or Indigenous nation directly to confirm when you need to renew your business licence.

Apply for tax credits

Once your business is licensed and in good standing with Health Canada, your company may be eligible for B.C.’s Small Business Venture Capital Tax Credit. This program now accepts cannabis-related applications involving manufacturing and processing of value-added goods (such as edibles, extracts and topicals), as well as research and development of new cultivation, processing or other technologies. Eligible individual investors in your company can receive a refundable, 30% tax credit up to a maximum of $120k per year. Additionally, corporate investors receive a non-refundable tax credit with no annual limit.

See also the full list of B.C. tax credits to learn more about what your business may be eligible for.

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Hire and train new staff

When you are ready to hire new staff for your business, WorkBC Centres located across the province can support you in finding qualified people to join your team.

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Export your products to new markets

Currently, under the federal Cannabis Act, it is prohibited to export or import cannabis unless it is for medical or scientific purposes. To be authorized to export these types of cannabis products internationally, you must obtain a federal export permit.

Note: in addition to being fully licensed and in good standing with all regulatory agencies in Canada, to export products internationally you will need to be Good Manufacturing Practices (GMP) certified, which is an international quality assurance standard.

B.C.'s Export Navigator service is open to growth-oriented small and medium-sized businesses in select regional service areas. Community-based advisors provide support and ongoing guidance to help your business grow outside of B.C.

As well, the Trade Accelerator Program is dedicated to strengthening the export performance of small and medium-sized businesses in B.C., and businesses of all sizes have access to dedicated export services to help your company expand internationally.

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Invest in innovation

The Canada-BC Agri-Innovation Program accepts cannabis-related applications from industry, academia, value-added food processors, and others to fund projects involving late-stage research, pilots and demonstrations, as well as the commercialization and adoption of innovative products, technologies and practices for the agri-food sector.

Expedite your entry into new markets by participating in a Canadian Technology Accelerator program.