Health Canada announced Wednesday new requirements for those applying for a license to grow cannabis in Canada to speed along the application process.
The agency said in a statement that effective immediately, new applicants looking to cultivate, process or sell cannabis for medical purposes must have a fully built facility before they apply.
Previously, applicants only had to submit a business plan for a facility, but not have one fully built before starting the application process.
Applicants who were pre-approved by the agency and in the queue would then be able to start securing investments to help build the actual site.
The agency says it will carry out a “high-level review” of existing applications currently waiting for approval, which is in the hundreds.
Health Canada is making this change due to a “significant amount” of resources allocated to approve applications. The agency says more than 70 per cent of approved applicants in the past three years have not shown they have built a facility.
“As a result, significant amount of resources are being used to review applications from entities that are not ready to begin operations, contributing to wait times for more mature applications and an inefficient allocation of resources,” Health Canada said in a statement.
In addition, the agency says that the new approach is a response to feedback on the amount of time the licensing process could take, exasperated by more people attempting to enter the cannabis market.
Previously, the entire application process could take more than a year to complete, according to Health Canada’s website.
Some in the industry had complained about the length of the process, such as Aphria Inc. interim chief executive officer Irwin Simon.
He said to analysts in January that an application to expand his Leamington, Ont., facility submitted in early 2018 still had not been approved, according to BNN Bloomberg. It was approved in March.
The delay in approving cannabis production could be a reason for a supply shortage in Canada since the drug was legalized in October 2018.
However, Health Canada says there is currently more than 600,000 square metres of space under active cultivation, which is enough to produce around one million kilograms of cannabis per year and meet estimates of total cannabis consumption in Canada.
Health Canada says that since May 2017, it has licensed 129 new sites, which is nearly triple the number of sites licensed in the four previous years.