Growing Cannabis Commerically

I have talked in past articles about the personal use of cannabis and how much each province will allow you to grow, but here I want to talk about a different side of it – growing cannabis commercially in Canada and what this means.

The legalization of medical marijuana in Canada (managed by Health Canada) took place on July 30, 2001, and recreational on October 17, 2018. With regard to recreational, Canada was the second country in the World (Uruguay was the first) to legalize the cultivation, possession, acquisition, and consumption of cannabis and by-products.

(It is interesting to note that as of September 2016, nearly 100,000 Canadians had bought medical marijuana legally.)

And now, it seems, there are a lot of people who want to get in on the Cannabis industry (growing and selling), and rightly so – there is a lot of money at stake.

In 2017 Deloitte predicted the recreational cannabis market would be worth close to $23 billion!

Here we will talk about who should apply for a license to produce, sell and distribute cannabis commercially and legally in Canada, how to apply for one, eligibility requirements, responsibilities as a licensee and causes for cancellation and suspension.


Growing Marijuana

Who Should Apply

Under the Excise Act, 2001, you must apply for a license if you plan to:

  • Grow (cultivate) cannabis products

  • Produce cannabis products

  • Package cannabis products

To make this a little clearer, you DO NOT need a license in Canada as an individual:

  • If you produce cannabis for personal use in accordance with the proposed Cannabis Act

  • If you produce cannabis for your own medical purposes under the Controlled Drugs and Substances Act

  • If you produce Cannabis as an authorized designated person for another individual for medical purposes

  • If you are an industrial hemp grower and produce industrial by-products

Straightforward, right?

Now that you meet these requirements, you need to know the following.


To be eligible, you must meet ALL the following criteria:

  • You are not the subject of a receivership of your debts (no independent third party acting on your behalf)

  • You have not failed to comply with any Act of Parliament that deals with the taxation of alcohol or tobacco in the past five years

  • You have not defrauded her Majesty in the past 5 years

  • You must be at least 18 years old

  • You must have a valid business address in Canada

  • You must provide all premises you will use for the cultivation, production and/or packaging of cannabis products

  • You must have sufficient financial resources to operate your business in an efficient and responsible manner

  • You must hold a valid license from Health Canada (issued under the proposed Cannabis Act)

  • You must provide a formal business plan documenting industry overview, operating plan, financial plan or source of funds, sales and marketing plan and the time frame you expect to achieve these goals

  • You must provide acceptable security to cover one month of the cannabis duty liability; the security amount is a minimum of $5,000 with a maximum of $5,000,000); GST/HST also applies to cannabis products

Completing an Application for Licensing

First and foremost you will have to be licensed under ACMPR (Access to Cannabis for Medical Purposes Regulations) formerly known as MMPR (Marijuana for Medical Purposes Regulations). This is the federal body that provides the rules, regulations, and licenses.

The regulations are there for the purpose of ensuring that the standards are adhered to by the producer, seller, and distributor and that security, record keeping, and quality control are complied with.

To obtain a license, you must complete and submit a Form L300, Cannabis Licence Application.

You must apply for a CRA Cannabis License, even if you have a Health Canada License, for both medical and recreational purposes.

Cannabis Licensing Application Guide

If you would like to obtain a copy of the updated Cannabis Licensing Application Guide in a PDF form, you must email them and request it until such time it is added to their site. The email address to request this guide is

If you plan to package cannabis products you must also register with the cannabis stamping regime at the same time as licensing.

Applying for your License is Just the Beginning

In addition to the eligibility requirements, you need to show acceptable security with a minimum of $5,000 and a maximum of $5,000,000.

Amounts will be calculated as follows:

  • If a new license estimated grams to produce cannabis products sold over the first 12 months times $1 per gram divided by 12 months.

  • For a renewal, security will be the highest amount of cannabis duties payable for a calendar month in the previous 12 months.

You can obtain more information on security requirements at Excise Duty Notice EDN52, Obtaining and Renewing a Cannabis License.

Once you submit your application, they will review it to determine if you are eligible based on the information you provided. Once approved, you will receive confirmation from CRA with your new excise duty program account number.

Note: Your application is not an approval to start a business. You can only produce cannabis products after you receive licenses from both CRA and Health Canada.

How Long is the License Valid

Two years is the length of time that your cannabis license is valid and is NOT an automatic renewal. You have no later than 30 days before the expiration date of your license and it must meet all requirements during the licensing period.


As an approved licensee, you will have the following responsibilities:

  • You must, if packaging products for sale, register for the cannabis stamping regime

  • Calculate duties imposed on cannabis

  • You must report and remit monthly duty payable using Form B300, Cannabis Duty and Information Return

  • Report any unpackaged or packaged product inventories using the same form

  • Keeping all supporting documents at least 6 years with regards to all aspects of your business

  • Always have a valid license making sure you renew at least 30 days before the expiry of your current license; as mentioned before, your license is only valid for two years

Note: You will report all changes immediately.

Avoiding Cancellation or Suspension of your License

After getting your hard-earned license, the last thing you want is for you to lose it or have it suspended. Reasons for this are, but not limited to, the following:

  • Bankruptcy

  • Cessation of cultivating, producing or packaging cannabis products

  • Failure to comply with any taxation or control of alcohol or tobacco Act

  • Failure to notify CRA of any changes to licensing information as required by legislation

  • Defrauding her Majesty

Final Thoughts

I have often thought of getting a cannabis license to grow and sell (I do have my medical marijuana license), but as a house sitter (link), I am constantly on the move and don’t have the place, time or financial commitment. It definitely is not a process to take lightly.

Personally, I feel that these regulations are necessary, not only for security and quality control purposes but also to ensure that the standards in place are adhered to by anyone in the process of growing, selling and distributing cannabis.

Do you have a Cannabis license to grow, sell and distribute or know of someone who does? Do you think the guidelines are too strict? Please let us know your thoughts and comments.


Leave a Comment

Are you 18 or older? You must be 18 to enter this website. Please verify age or click 'exit' to leave.

Enjoy this blog? Please spread the word :)