Thread by @KirkTousaw

I’m at the @GovCanHealth licensing information session in Victoria. I’ll try to post updates. Todd Cain begins with slide showing Gov’t objectives a primary part of which is the commitment “to enable a diverse competitive legal framework with range of market participants.”

Followed immediately by slide on Act’s goals: restrict youth, controls adult access, provide for legal production to reduce black market. Public health and safety objectives.

Top 5 (or so) reasons why regulators are not like other people:

1. Love paperwork.
2. Love rules.
3. Say “it depends” a lot.
4. Don’t like surprises.
5. Think being right is better than being quick.

5 reasons why operating in highly regulated environment is different:

1. Reverse onus; you need to first see if you are allowed to do it.
2. Must do homework; applicants should know Act/Regs and guidance docs.
3. Licensing creates expectations from consumer/provinces...

4. This was a major policy shift and not everyone is on board. Industry is under a microscope and individual failures reflect on entire system.
5. You won’t be lonely...@GovCanHealth will have application teams, licensing teams, inspection teams keeping you company.

Most applications received by HC are for micros. HC has now issued one micro license and one nursery license.

HC made licensing changes because prior paper based applications required lots of HC resources and 70% never went past review stage. Those facilities weren’t built or applicants didn’t go forward. Caused delay in other better prepared applicants.

Main changes:

1. New applicant must have document component and evidence that site is built and compliant (what was formerly the “evidence package” that you submitted after passing the paper review stage).
2. Anyone in queue as of last week gets a high level review and HC...

...status update letter. Then you submit evidence package when site is built and compliant. Seems like they’ve removed the confirmation of readiness letter and substituted the status update letter instead.

Implications of changes:

1. All applicants subject to rigorous process.
2. Resources focused on well built sites and those will move more quickly.
3. Decreased waiting between submission of evidence package and licensing. HC can’t commit to service standard but would like to...

...be at a 60 day turnaround.
4. Lowered barriers to entry for well-prepared new entrants.

HC notes that most people that make it past the document component do get licensed. Very low rejection rate. Strict rules but follow guidance and possible to succeed with application.

Key things HC looks for:

1. Good Production Practices. Systems that show you can meet GPP>
2. Personnel security - are the people a risk or not?
3. Physical security - perimeter, storage area, etc.

HC has and is publishing a number of guidance documents. Use them. Read them. Know them.

It was previously noted that many applications come in where the applicants clearly have not read or understood the Act/Regulations/Guidance Documents.

HC formerly required 2 on-site inspections prior to allowing applicants/licensees to have any production ongoing. Now that’s the exception. Most applicants submit video evidence package and get approval to grow. First in-person inspection is now typically during first crop.

150 micro applicants or so.
15-20 got confirmation of readiness. 5 applicants screened out noncomplete apps. HC has a dedicated queue and team for micros. Lots of good quality applicants.

Into some post-cookie-break Q/A:

Can you level up from Micro to Standard? Yes, just meet the additional requirements and be reviewed. Treated as new application in CTLS but internally treated as amendment.

Often HC licenses a building - by perimeter - but only a portion operational when apply. That’s fine. Can get new internal spaces licensed as you move along. These are amendments, not new applications. Often applicant starts with 1 or 2 rooms, then expand. Quick review if same.

Can you get license with just cultivation room or do you need full set up including shipping/receiving? It depends. What applying to do - licensed space needs to be able to support licensed purpose. Coming up with outdoor - just cut/harvest at site, then transport to trim site.

Suggestion that you’d want at least a drying/storage room licensed because you need somewhere to put the product just in case there is a lag time for amendments to expand the licensed space.

Video packages: people charging a lot for it. You can do your own. Many applicants do so, even using just their iPhone. Perfectly acceptable. No specific format or length. Show the facility and how it complies. Perimeter, physical layout, cameras, access points to building, etc.

Reviewers love you if you walk through facility and match it to the blueprint which they will be looking at. Index video to what they are looking at on paper. This is intended to bring the paper application to life.

Q from @BeardedGreenly: What are performance standards for the security clearances? Are there any? Can you allow security clearances “at large” so can apply prior to building?

A: Hard to provide because depends on information that comes back. HC and RCMP involved...

...RCMP does police check, HC reviews, then possibly to an advisory committee...then a decision. If no adverse information it can be very quick. If they have to assess against their risk matrix, then it will delay a decision.

Unlikely to get front to back service standard on these. Whether to allow ahead of time, not entirely rule it out. Want to see if necessary to help move quickly. Lots of different reasons for security clearances attached, didn’t want companies to just get people cleared generally

Q: couple with a financial investigation because security likely going to be the biggest waiting time..service standard on application is moot if sitting for months waiting on security.

A: Was a big security backlog as of Oct 17, and more roles need it now, but catching up.

HC has tripled size of staff working on security clearances and hope to double speed within few months. With security they are measuring how long they take, how many go into slow lane, gathering data to seek efficiencies.

@craftdepotinc suggests first step for open security clearance process would be to allow micros to do so. Q: CFIA has a building list of approved materials in food sector; why not create similar list for guidance?

A: New guidance docs are to provide additional information...

...and HC will think about this suggestion and determine whether it is something they can implement.

Another Q from @craftdepotinc - what are fatal flaws of applications:

A: Not any generally, but personnel security (rare circumstances if someone has serious criminal history and is the applicant there’s a problem) and physical site issues that would make compliance hard.

They do work with applicants, for example, to ask “how can you keep this wood floor clean” which isn’t a fatal flaw because it is correctable.

Example: in guidance document they want physical security identified (eg, “Camera 1”) and that should match the documentary information (“Camera 1” should be listed on blueprint) and give these examples.

Q: These regs apply to both medical and recreational?

A: Yes. The references in the document to medical refer to medical sales licenses specifically but all production/process applies to all.

Comment: if trying to encourage transition making it very hard and expensive to do that, many think why bother - have customers and little risk now. Q: Can you set up a system where people get temporary permits to use existing facilities, get product tested and transition? ...

...Q continued: Costs $1MM plus to get going.

A: Heard a lot that it will cost $1MM to enter market. Don’t understand where it comes from. What part of that cost is related to meeting requirements versus cost of just running any business?

HC: Is there a reason if you are already growing in a facility to use that for your application?

<Room chuckles>

@BeardedGreenly - need money to retrofit to meet regs. Banks are not lending money to these businesses. Banks want to see licenses, not hopes. Applicants now need $.

@BeardedGreenly most small businesses want loans, not investors. 6 months into new regs the rules change completely and all financial risk is now front-loaded and many people can’t do that.

@craftdepotinc - understand you can phase out production site, submit an outdoor site with retrofitted seacan to build a partially functioning site that meets bare minimum of compliance in order to proceed through licensing, then amend license to move or expand?

A:....

A: change location, new application. Taking existing site and growing from modest set of initial activities to more space or grow physically or scope of licenses...that’s the standard model that most have used currently. Nobody started with 100k operational square feet.

Q: Echoes CFIA suggestion. No need for mutual exclusivity of rooms - can you go from one room to another as long as GPP and SOPs in place?

A: Have licensed spaces like that. Sometimes treat as one large space for GPP perspective. What are the activities being conducted?

Q: Within operational areas (except storage room) you have option to have an approved lock/locking systems as opposed to full access control?

A: In a Standard you can have multiple rooms in one area if access level the same in all rooms in that area. No op area in micros.

Q: $ screening for transitional applicants - are there HC or CRA concerns about sources of funding?

A: If they see links to serious criminality that is problematic. Traditional loans, friends/family raises not so concerning.

Q: So former grower who saved money?

A: Unless...

...basically same idea as security clearance. Was there history of serious financial or violent crime associated? If not, probably no real concerns. Looking for red flags of serious criminal past. Eg, If $ from HAs then there’s an issue.

Q: Are indigenous applicants in the queue allowed to choose whether new processes apply to them?

A: There is an indigenous application service and if come through that they can choose 2 step review process. Recognition of unique status and challenges.

Q: Destruction - can’t find HC rules about methods of cannabis destruction and what constitutes non-organic and organic, etc. Can find provincial regs but not federal.

A: Some lack of clarity as to what question is about. Disposal of waste is provincial and municipal.

Q: For video package, showing SOP compliance is it overkill to do that (eg, video of person weighing cannabis out)?

A: Video evidence is generally about construction and site compliance issues (eg, is it made of untreated wood?) and physical security, not operational issues.

A: Your organization structure is important. Provides accountability of staff to your SOPs. What is your GPP documentation? What is your organization security process? Who works there and what are their qualifications to ensure meeting SOPs?

@CraftCABC Q: is cannabis with Health and Safety and will it move at some point to agriculture? Odor problems, eg, normal in agriculture operations.

A: Right now cannabis oversight in a number of portfolios with public health and safety perspective. No change in near term.

A: while @GovCanHealth is lead agency every government department has touched this file. There are support programs from regional economic development agencies, agriculture, farm credit canada, etc. Not just about HC.

@CraftCABC would like to see more money put into economic development in this area, and creation of incentives for micros and small business to get into sustainable practices and bring in more visible minority participation.

Q: Large building with lots of micros inside...one QA for all or one for each?

A: have applications now with shared personnel. Need to be able to demonstrate ability of person to provide support to multiple applicants. If you can, then they have no issue with it.

A: Multiple in same building - each one is meant to be operated as individual businesses but permissible to share personnel and certain operations.

A: Very different if you have a micro on a site and bring standard on same site - can’t do that. Combinations of licenses allowed together is set out in Act/Regulations. So can’t have a micro and nursery on same site - because nothing you can do with a nursery adds to micro.

Q: what is lowest fence ever approved?

A: Standard or micro? Lolz because it doesn’t matter. No need for a fence, perimeter may be the building wall. Don’t know height of lowest fence. Physical guidance is not prescriptive - meet the objective and show how.

A: most fences are 6 feet tall.

Q: How close to building?

A: No requirement. Some don’t have fences at all. Have had a berm, a river.

Q: blackberry bramble

A: lol

Q: Misinformation from HC employees on phone line...was told on Wednesday that micros were exempt. Serious issue and rampant.

A: Notes made, HC not looking pleased to hear that.

Q: You should admin a micro group on Facebook to counter misinformation.

A: Good suggestion.

Q: How many on micro dedicated team?
A: Staff includes screening, licensing, amendments, security. As more licenses come in more staff hired. May and June doing high level reviews of in queue applications, then all resources go into final evidence package submissions.

Q: how about templates for applicants? Consultants are expensive.

A: goal is to not need consultants in order to make applications. That’s why they are doing guidance documents and trying to put good information out there. No issue with “Will Kit” type items but HC won’t create.

Q: release stats on rejection rates to boost investment?
A: regularly review what they disclose and will consider it.

A: the micro applications that were rejected at early screening were simply not able to proceed - didn’t make it past learning curve of operating in regulated space. Ones that do make it past initial screening usually get licensed.

Q from @CraftCABC about testing requirements and concern about inability to comply with QA regulations in outdoor growing?

A: There are proposed changes to regulations coming but not sure if includes microbial testing. Outdoor will require some adjustments. Can choose now...

...which of the microbial standards you use. Not clear if changing. Effort was made to license a handful of outdoor grows this season so all can better understand possible compliance issues. Will learn some lessons this season.

Ok folks, that’s a wrap from me. Going to visit the Original Farm dispensary, grab some vegan dinner at Be Love and go ice my typing fingers while puffing some homegrown.

To “not use” that facility...less funny when I get the concept completely wrong. Geez.

BTW the good folk from @GovCanHealth are doing this talk in Kelowna and Vancouver this week also.