Cannabis Drug Licences

Legalization of marijuana in Canada has been receiving worldwide attention over the past few months, especially since Health Canada’s July 2018 release of the Cannabis Act and regulations. While licensed producers under the previous Access to Cannabis for Medical Purposes Regulations are certainly going to have a head start upon legalization, another group of license holders has a competitive advantage when it comes to participating in the space, namely holders of a Health Canada issued Drug Establishment License (DEL).

Any facility in possession of a DEL has undergone scrutiny and inspection by Health Canada with respect to organization of work flow, cleanliness, personnel and operations for the various activities that require a DEL such as importing drug products, testing drug products or distributing and wholesaling drug products. The DEL designation indicates that the license holder is operating in compliance with Good Manufacturing Practices (GMP), found in Part C, Division 2 of Health Canada’s Food & Drug Regulations.

Health Canada has created a new type of license as part of the Cannabis Regulations, called a “Cannabis Drug License” which is addressed in Part 8. This section represents a unique tie in of the Cannabis Regulations with the Food & Drug Regulations. The definition of a cannabis drug license according to the regulations is a license for a drug containing cannabis. While this section of the regulations is relatively short compared to other parts, it speaks volumes on how new players can now take part in the sale and distribution chain for drugs containing cannabis. Interested parties are required to apply for a cannabis drug license in order to sell, distribute or import drugs containing cannabis, but according to Regulation 141 only those parties in possession of a DEL are eligible to apply.

Current DEL holders will need to become familiar with the security requirements under the cannabis regulations, and recommendations for storage of controlled substances as set out in the Directive on Physical Security Requirements for Controlled Substances and Drugs Containing Cannabis (1).

The Food & Drugs Act and its regulations are a logical point of entry for the Cannabis Regulations. The blending of these two regulations will ideally remove some of the duplication seen with the similarities between GMP and Good Production Practices (GPP) found in Part 5 of the Cannabis Regulations. Both GMP and GPP require facilities and organizations to operate as per written approved procedures, employ trained and qualified personnel, maintain a system of product distribution that allows for a rapid recall from the market place, and most importantly ensure products meet their specifications before being sold in Canada.

While the door will now open for additional organizations to be involved when legalization of cannabis becomes a reality, Health Canada continues to limit the supply chain to those parties that have demonstrated compliance with requirements under the Cannabis Regulations, Food & Drug Regulations to maximize the quality and safety of drug products in Canada.

(1) Directive on Physical Security Requirements for Controlled Substances and Drugs Containing Cannabis. Health Canada. Effective Date: October 17, 2018. http://www.gazette.gc.ca/rp-pr/p2/2018/2018-07-11/html/sor-dors144-eng.html