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Craft Cannabis: Micro-Cultivation + Micro-Processing Licences

Craft cannabis is hitting the market as newly licensed craft producers are coming into operation. With the introduction of the new regulations under the Cannabis Act, the federal government created micro-cultivation licences, often referred to as "craft producers", which have less security and building requirements than a full-scale cultivation licence.

Requirements for a Micro-Cultivation Licence

Individuals are now able to apply for micro-cultivation licences. If approved for a micro-cultivation licence you would be authorized to grow an unlimited amount of cannabis.

However, in order to qualify for a micro-processing licence, your cannabis production facility surface area cannot be larger than 200 square metres.This would include areas with multiple surfaces such as production areas that are vertically arranged.Cultivation may be conducted indoors or outdoors however, the cannabis plant surface area would include any indoor/outdoor areas at any single time.3

Other restrictions include that there must be one person designated as the master grower who is responsible for the cultivation, propagation and harvesting of cannabis and must have sufficient knowledge of the provisions of the Cannabis Act and its regulations in relation to those activities.4 In addition, a holder of a licence for micro-cultivation or standard cultivation may designate one individual as the alternate master grower who is qualified to replace the master grower.5

In regard to security, the site must be designed in a manner that prevents unauthorized access.For example, the design of and materials used in the construction of the physical barriers, as applicable, including walls, floor/ceiling, doors, etc. must ensure prevention of intrusion. This design must also include a physical barrier surrounding the perimeter of the site and a barrier surrounding the storage area that will prevent unauthorized access.7

Access to any storage area must also be restricted to individuals whose presence in the area is required by their duties. This may include having an access control system and security floor plans with clearly labelled unique identifiers. These unique identifiers would detail the type, specifications, and locations of each access control mechanism installed and operating within the access control system. Access control mechanisms could include card swipes, keypad codes, combination locks, padlocks, etc.

Unlike a full-scale cultivation licence, the security requirements for a micro-cultivation site do not require visual monitoring and recording devices or an intrusion detection system.

Requirements for a Micro-Processing Licence

A micro-cultivation licence may also be combined with other licences and subclasses such as micro-processing, sale, analytical testing and research.

Micro-processing licences are however restricted to a maximum of 600kg of dried cannabis (or equivalent) in one calendar year.However, if a licence holder also holds a micro-cultivation licence for the same site and the cannabis comes exclusively from that site, this maximum quantity does not apply.9

All micro-processing activities must be conducted indoors. In addition, a holder of a licence for processing must retain the services of one individual as a quality assurance person who has the training, experience and technical knowledge related to the requirements for good production practices under the Cannabis Act regulations.10 This quality assurance person would be responsible for assuring the quality of the cannabis before it is made available for sale; investigating every complaint received in respect of the quality of the cannabis and, if necessary, taking corrective and preventative measures.11 A holder of a licence for processing may designate up to two individuals as alternate quality assurance persons who are qualified to replace the quality assurance person.12 The security requirements for micro-processing licences are the same as for micro-cultivation, as noted above.

Resources for Businesses and Employers

At Field Law our Cannabis Industry Group has experience advising cannabis producers and retailers on regulatory compliance, mergers and acquisitions, and raising capital in the private markets. We are also available to assist prospective cannabis retailers with applications for retail licenses, lease negotiations, raising capital and development permit appeals.

More to Come

Field Law’s Cannabis Industry Group will continue to provide updates on the emerging cannabis industry. Stay tuned for more information on securities and capital markets, labour and employment, intellectual property and business-related issues that may arise following the legalization and regulation of cannabis in Alberta and the Territories.

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.

1Cannabis Regulations (SOR/2018-144) – Section 13
3Ibid – Section 41
4Ibid – Section 12
6Ibid – Section 74
8Ibid – Section 21
10Ibid – Section 19