Some interested business people and citizens of Canada have been given the permission to start their own marijuana company following the passage of the 2018 Cannabis Act. It’s the same as opening every form of business in the sense that you will need licenses and certificates to obtain them. Also, you will need to figure out what type of business category will you be pursuing. You might need to explore supplier options and top seed banks in Canada to support this business venture.
Before we take further steps, ask your self what do you need the license for? The Canadian Government has set up requirements on who should apply for a license.
Who can apply for a license?
They grow their cannabis products
They produce their own cannabis products
They package their cannabis products.
The Canadian government has also set exemptions to some individuals, these are the people who don’t have to apply for a license. They are:
- Individuals who produce cannabis products in Canada for their own personal use in accordance with the Cannabis Act
- Individuals who produce cannabis products in Canada for their own medicinal use in accordance with the Cannabis Act
- Individuals duly authorized to produce Cannabis products in Canada for medicinal use of another individual in accordance with Cannabis Act
- Individuals who are industrial-hemp growers who produce industrial hemp-products
Steps for Starting your Marijuana Business
Here’s a rundown of what needs to be done when you want to start your own marijuana business in Canada.
- Applying for a License
A standard form given by the Canadian Government will be handed to you.
- Review of application
The government will determine if you are eligible to have a cannabis license, based on the information on the form. They can also contact you should they feel the need to gather more information.
- Once proven eligible for the license, a confirmation letter from the CRA will be sent out to you. The letter will contain your license approval and your new excise duty account number.
- An application is not an indication to start a business. You can only start producing cannabis products once the CRA and Health Canada licenses have been approved and received.
Eligibility Conditions for Acquiring Licenses
To apply for or renew a license, ALL of the following requirements should be met:
- Should not be the subject of the receivership of your debts
- Have not failed to comply with Act of Parliament that deals with the taxation of alcohol or tobacco or anything under it for the past 5 years
- Must be 18 years of age, this is for ALL individuals involved in the business
- Should have a valid business address in Canada
- Provide a list of ALL cultivators, producers, or those in charge of packaging the products
- Should have sufficient financial resources to conduct business responsibly
- Hold a valid License/Permit from Health Canada given under the Cannabis Act
- Should have a solid business plan
- Should have acceptable security to cover 1 month of cannabis duty liability
Types of Licenses
Remember that these are business licenses and not for growing-at-home licenses. Licensed activities can never be done in a dwelling-house as per federal rules.
- Cultivation License
Simply put this is the license you need to get if you will cultivate cannabis products. There are 4 types of cultivation license.
The most difficult to acquire as this is given even to future licensed producers. If problems arise, these licensed producers will be trialed in front of federal courts.
This is for individuals who want to start a small cannabis business. Their space should not be bigger than 200m2 in size.
This is for people who want to support other people’s businesses by supplying them with seeds, cuttings, etc. Their space should not be bigger than 50m2.
Least regulated type of license and the easiest one to apply.
- Processing License
If you have plans of making your own cannabis product then there is a need to acquire a processing license. The two types of these are:
- Micro-processing license
This is the type of license small business owners will apply for. The size of the area will be relatively small than those applying for the other license.
- Standard processing license
This is for businesses who will produce a great number of marijuana products.
- Sales license
Before you start selling your marijuana products, you’ll need to secure this. It will allow you to sell both medical and recreational marijuana. It might be difficult to obtain because of the security requirements such as proof of visual monitoring (a yearly record), alarm system for both inside the site and within the parameter of the site and also a record of every single individual entering or exiting the area where cannabis is stored.
Looking for the top seed banks in Canada
If you are only interested in selling marijuana products and not really cultivating your own, you will need to look for the top seed banks in Canada. By top we mean, reliable, good customer service and excellent marijuana strains you can choose from. Here are some tips that might help you in looking for the best seed banks.
- It should have a legit and working website
- Proven record of being in the business for more than 1 year
- Great customer reviews
- Contact Details and getting responses from them
- Excellent shipping schemes (discreet shipping, free shipping, fast shipping)
- Secured payment methods
- Wide range of marijuana strains
- Proven quality of plants
The license will only be valid for 2 years and it will not be automatically renewed. License renewal should not be more than 30 days before the expiration date of the current license.
Responsibilities of a Cannabis Licensee
As a licensed business owner in the Cannabis Industry, you are expected to adhere to the following:
- Registration of Cannabis Stamping Regime (for packaging cannabis for final sale)
- Calculate duties imposed on cannabis
- Send and pay the monthly duty payable on cannabis using the government provided forms
- Do an inventory of packaged and unpackaged items using form B300
- Make sure to have supporting documents of at least 6 years of operations
- Apply for a renewal license not more than 30 days before the expiration of your license
You now know what needs to be done, all that’s left is for you to get the form, fill it out and submit to the appropriate government office.