Growing and selling cannabis is an exciting industry to get into, but trying to figure out all the ins and outs of legal terms and licenses can feel like an uphill battle. While cannabis is now legal in Canada, there are still rules and regulations everyone needs to follow. One essential piece to this regulation puzzle is something known as a cannabis LP or Licensed Producer.

A cannabis Licensed Producer refers to a company that has authorization from the government to cultivate and process cannabis for both recreational and medical use. Cultivating involves growing and harvesting, and processing involves manufacturing and packaging.

Once a Licensed Producer, a marijuana dispensary can then freely buy, trade, and sell their products within authorized facilities. But being an LP isn’t an option, it’s a necessity. Being licensed is a requirement by law, and if you don’t have one, then you won’t be allowed to set up your business. As a cannabis LP, your reach is wider and you can work with authorized retail outlets throughout Canada.

To make things clearer and give you a better understanding of what LPs are all about, we’ve summarized everything you need to know.

What are Licensed Producers?

Licensed Producers are given authorization by the Canadian Government to produce everything marijuana-related, including growing, harvesting, drying, trimming, curing, and packaging. From here, the cannabis can be sold to licensed wholesalers or facilities. LPs can also sell live plants and seeds.

From the beginning, LPs have been authorized by the Health Canada Licensed Producer system. Although this system changed once Canada legalized cannabis for recreational use in 2018, many LPs still use the term “Health Canada Licensed Provider” to refer to any company that is licensed.

As of 2019, Health Canada classifies its systems into the following licenses:

  • Cultivation (growing cannabis)
  • Processing (making cannabis products)
  • Selling cannabis for medical purposes
  • Testing cannabis
  • Research using cannabis

In Canada, an LP is a whole business, rather than an individual, that has been given permission to cultivate and sell their products. This ensures that proper safety requirements are followed to create safe work environments and quality control.

How to Become a Licensed Cannabis Producer?

The number of cannabis LPs in Canada are constantly growing, and a waiting list remains for those companies awaiting approval. Licensed Producers Canada lists the following steps to become a Licensed Producer:

  1. Become familiar with all relevant Federal and provincial, territorial and municipal legislation.
  2. Identify license class and subclass of interest.
  3. Create a CTLS Account.
  4. Inform all required individuals associated with the proposed license holder to create a CTLS account, and apply for a security clearance, if applicable.
  5. Create corporate account, if applicable.
  6. Create an application and gather all information.
  7. Submit application.

According to Health Canada, “the Cannabis Act and its Regulations provide, among other things, the framework for legal access to cannabis and control and regulate its production, distribution and sale.”

This means that the federal government supervises everything to do with cannabis production and sales, except for anything related to recreational use. In this case, retail licenses are authorized by province or territory.

How Many Licensed Producers Are in Canada?

The number of LPs since legalization in 2018 has skyrocketed. As of 2022, there are over 800 LPs in Canada, and that includes medical cannabis Licensed Producers.

You can view the full list provided by Government of Canada by clicking here. This list is constantly updating as more and more companies are becoming licensed.

Within this list, you’ll also see the classes of cannabis that LPs are allowed to sell to provincially and territorially authorized distributors or retailers. These can include plants, seeds, extracts, edibles, topicals, dried and fresh marijuana products.

For those interested, cannabis oil is no longer classified as a separate class as of late 2020. Cannabis oil is now reclassified under either extracts, edibles or topicals.

Cannabis Regulations for Licensed Producers

The regulations that LPs must follow in order to obtain their license can differ slightly from province to province, but here are some general requirements as listed by Legal Line:

  • All information about their business
  • The financial and criminal histories of all employees
  • Any involvement they may have with current Licensed Producers (LPs)
  • A business plan
  • Be in good standing with Canada Revenue Agency
  • Have approval from their municipal government
  • Possess a proven ability to financially and personally operate the business

Once approved, it’s then up to the respective province or territory to develop, implement, maintain and enforce certain regulations. These include how marijuana is sold, where stores can be located, and how they must operate.

In order to qualify to be an LP, cannabis grown by that company is passed through rigorous quality control testing. Safety requirements are also an important aspect of approval. Particular standards must be met, such as requirements regarding additives like pesticides. If you want to know more about good practice guidelines for LPs to follow, visit the Canadian Government’s Guidance Document.

Get Your Business Noticed Today

Now that you know everything about cannabis Licensed Producers, there’s not better time than the present to get your business booming. Contact us today to find out how we can help you grow with solid digital marketing strategies, tailored to your business.