Health Canada Improvements to the Licensing of Cannabis Production under the ACMPR

On May 26, 2017, Health Canada announced significant developments to the licensing process under the Access to Cannabis for Medical Purposes Regulations (ACMPR). As the medical cannabis industry continues to evolve, the Government of Canada has updated its licensing regime in order to streamline the process and enable increased production.

Health Canada will continue to conduct its comprehensive review and inspection processes to ensure public health and safety.
 
Major Developments for Licensed Producers (LPs)
 
While several changes, as highlighted below, impact pre-licensed applicants, there are also significant announcements for existing LPs:

(1) Ability to Increase Production Capacity – LPs may increase their production of cannabis products based on the capacity and security level of their vault(s) and/or safe(s). In addition, LPs will not be required to store low-value cannabis waste products in vaults and safes. These two changes will permit LPs to increase their production capacity to the maximum they are authorized to store and may result in new capital expenditures as LPs look to increase the size, capacity and security of existing vault(s) and safe(s) in order to increase production capacity.

(2) Fast-Track Expansion or Modification – Expansions or modifications to existing facilities may now be approved after Health Canada has reviewed an LP’s application, without the requirement for an inspection. Such fast-tracked applications will only be available for low-risk LPs with a strong record of compliance and where the proposal is straightforward, substantially similar to the existing facility and is contained within the facility’s existing security features.

(3) License Expiration – Licenses issued or renewed by Health Canada may now be issued for a three year period and security clearances may be valid for a five year term.

Significant Changes for Pre-Licensed Applicants
 
Health Canada has also revised the licensing process for applicants waiting for licensure. These changes are expected to have a significant impact on the timeline for receiving a license to produce cannabis. 

(1) Elimination of PLI for License to Produce – Health Canada will no longer conduct a pre-license inspection (PLI) in advance of issuing a license to cultivate. Once Health Canada has completed its detailed review of an application and conducted the security clearance process, a license to produce will be issued. Health Canada will conduct an introductory inspection as cultivation commences and will continue to inspect all facilities before a license to sell is issued.

(2) Additional Staffing Resources – Health Canada is increasing the resources dedicated to the licensing process under the ACMPR. The additional resources, mainly targeted at applicants in the detailed review stage, will ensure applications are processed faster. According to Health Canada, as of May 26, 2017, 187 applications were at the review stage and we anticipate a number of new LPs in the coming weeks and months as a result of the announced changes.

(3) Streamlined Phases – Health Canada will now conduct detailed review of applications concurrently with its security screening process. As a result of this, as well as the additional Health Canada resources and elimination of the PLI, it is likely that the timeline for an application to be processed will be significantly reduced, with some industry speculation suggesting the changes may accelerate the application process by nearly six to nine months. We will be monitoring developments in this regard as the updated licensing regime is implemented.

We Can Help

For more information, please contact Jonathan Sherman or another member of our firm’s Cannabis Group.