Since cannabis was fully legalized in Canada in 2018, experts estimate that the legal cannabis industry has accounted for a $43.5 billion boost to the Canadian economy. Simply put, it’s an important source of economic growth for our country.
However, the legalization of cannabis products also created the need to apply for a cannabis license so that the government can properly regulate the products sold and the type of research that organizations can carry out.
All in all, cannabis licenses are becoming a popular topic of conversation for businesses in Canada. This quick guide will outline everything you need to know about cannabis licenses and how to obtain one (plus the legal ramifications if you don’t have the proper license).
Do You Need a Cannabis License in Canada?
The cannabis industry is booming in Canada, and there’s no shortage of businesses looking to get a piece of the pie. But before you can start selling cannabis, yes, you need to obtain a cannabis license from the government.
The process can be lengthy and complicated, but it’s worth it if you want to operate a legal cannabis business. Once you have your license, you’ll be able to sell cannabis products to customers across the country.
What if you’re just selling CBD products in the form of bath soaps or want to sell hemp oil for dogs? Ultimately, you need a cannabis license in Canada if you are going to do any of the following;
- Grow cannabis
- Process cannabis
- Package cannabis
However, the type of license you need depends on the type of products you’ll be creating or whether or not you plan to carry out research and testing (we’ll help you figure out which type of license you need below).
You do not need a cannabis license if you’re:
- Growing cannabis for personal use
- Authorized to grow cannabis for medical consumption of someone else
- Producing industrial hemp
When it comes down to it, you mainly need a license if you’re going to be commercially growing, processing, packaging, and selling cannabis to consumers in Canada. Keep in mind that hemp is different and hemp laws in Canada are different from cannabis laws.
Different Types of Cannabis Licenses
As mentioned above, there are different types of cannabis licenses in Canada. There are several different types ranging from a cannabis nursery license to a micro-cultivation license and even a standard cannabis processing license.
To help you make sense of what kind of cannabis license you might need, here’s a brief overview of three main categories most cannabis entrepreneurs and businesses fall into.
License to Grow Cannabis in Canada
If you plan on growing cannabis in Canada then you’ll need a cultivation license. This is a category with three types of licenses that fall under it:
- Micro-cultivation
- Nursery
- Standard processing
Depending on the type of growing you will be doing, you might need to apply for all three licenses. However, once you have the proper licensing, you will be able to:
- Possess cannabis
- Dry, trim, and mill your cannabis plants inside
- Perform analytical testing of your cannabis as part of quality control
- Perform research and development tasks to improve your product
Keep in mind that if you plan on performing certain types of research outside of this, you’ll have to apply for a cannabis research license.
Medical License to Sell Cannabis in Canada
If you plan on selling cannabis in Canada then you will need a license to do so. This type of license allows you to sell pre-processed and pre-packaged cannabis products to consumers. So, this means that you can’t process and package your products.
There are currently two types of this license:
- Sell cannabis for medical purposes with possession
- Sell cannabis for medical purposes without possession
What does possession mean in this context? If you have a license to sell medical cannabis in Canada without possession then it means you can’t legally possess cannabis on-site at your store, for example.
In the real world, this might look like owning an online eCommerce store that sells other brands’ cannabis products. You can coordinate and process the sales but you would need to have someone else fulfill those orders.
If you opt for the license that comes with possession then you can possess cannabis on-site. This is typically for those who want to cultivate and sell their own products. However, you’d need to combine the license with one of the licenses mentioned above for growing cannabis.
License to Process Cannabis in Canada
If you don’t want to grow cannabis but would like to process and package it to create cannabis or hemp products then you’ll need a license. Basically, with this license, you can do everything you could with a growing license except actually grow the cannabis.
This includes:
- Drying, trimming, and milling your cannabis plants inside
- Performing analytical testing of your cannabis as part of quality control
- Packaging and labeling your cannabis products
All in all, this is a great option for entrepreneurs interested in processing cannabis to make other products that aren’t traditional marijuana products such as pure marijuana flowers.
This could include those interested in processing or extracting cannabis for chocolate edibles or topical lotions. Basically, if you need to extract cannabis in any way, including for vaping products, you’ll need to apply for this license.
Cannabis Law in Canada: What to Know
Depending on the type of business activity you’ll carry out, you need to apply for one of the licenses listed above. Each license is valid for two years from the date of issue.
Likewise, it’s important to note that these licenses don’t renew automatically, so you’ll need to ensure you stay up to date on renewals. You have up to 30 days after expiration to renew each license.
Do You Need a Cannabis Lawyer?
There’s no question that cannabis lawyers are in high demand these days, especially in a country like Canada where cannabis is now legal. If you’re the owner of a cannabis business in Canada, you may be wondering if you need to hire a cannabis lawyer. The answer is that it depends on your specific situation.
If you’re planning on starting a cannabis business, for example, you’ll need to obtain a license from Health Canada. This can be a complex and time-consuming process, so it’s worth enlisting the help of a cannabis lawyer.
Similarly, if you’re already running a cannabis business, a cannabis lawyer can help you navigate the ever-changing landscape of cannabis law and ensure that you remain compliant with all applicable laws and regulations. While the licenses mentioned above might sound straightforward, there are certain things you need to stay on top of once you have the licenses.
For example, even with a cannabis license in Canada, you need to:
- Calculate the correct taxes on your cannabis products
- Correctly report and pay your cannabis taxes
- Sign up for the cannabis stamping regime
- Apply for license renewals on time
- Update your license if something changes
In short, while you may not need a cannabis lawyer right away, it’s something to consider as your business grows. While the cost of hiring a lawyer or getting legal help might sound like a lot for a new entrepreneur, the cost of a million-dollar lawsuit or non-compliance fees can add up to be a whole lot more.
What Does a Cannabis Lawyer Do?
Not sure what a cannabis lawyer does or how they might be able to help your business? Simply put, a good cannabis lawyer in Canada can help you with a variety of legal issues related to your cannabis business.
For example, they can help you obtain a cannabis license, draft contracts, and negotiate deals. They can also represent you in court if necessary. In addition, a cannabis lawyer can provide valuable advice on compliance with Canadian cannabis laws and regulations.
Cannabis lawyers are beneficial to cannabis businesses because they help to protect your interests and ensure that you are operating within the law. If you are thinking of starting a cannabis business, it is important to consult with a cannabis lawyer to ensure that you are taking all the necessary steps to stay compliant and protect your business.
Get Legal Help From a Cannabis Lawyer
Ready to apply for a cannabis license but aren’t sure which you need, how to apply, or what other legal tasks you need to take care of to ensure your business runs as smoothly (and legally) as possible?
At Substance Law, we offer years of experience with cannabis law and are confident we can help you and your business succeed. If you’re interested in legal advice or have questions about cannabis law, please don’t hesitate to get in touch.
