April 7, 2020
With Canada legalizing adult access to both medical and recreational cannabis, its federal-to-provincial-to-municipal path to licensing approval brings with it a complex regulatory environment in which decisions at the federal and provincial/territorial level, as well as in municipalities, can occur simultaneously and sometimes inconsistently.
As a new and emerging industry, the legal cannabis market has been identified as a cash cow with many looking to cash in as the rules of engagement, while numerous, are often ambiguous at best. As companies design their facilities and look to start their operations, choices are often made to meet the numerous application requirements as quickly as possible.
Facilities can be re-purposed from existing farm buildings and warehouses or out-of-business wineries with existing greenhouses. Key pieces of extraction equipment can be imported to Canada and reconfigured to meet your processing needs. Modified systems are put into place and “new operations manuals” are developed, all in order to succeed. At the moment, there is very little precedent in how to build a successful operation, and in some cases there is virtually no experience or expertise as to what makes a successful cannabis business.
As the legal cannabis market in Canada matures, standards and regulations will continue to shift. For an organization to succeed, they’ll need help navigating those regulations.
These regulations, at all levels of government (federal, provincial/state and municipal), can be a tremendous challenge – starting with the application process all the way to receiving the start-up licences to operate in the legal cannabis industry. For many, it can be difficult just to know where to start.
“The cannabis industry faces challenges in globalizing their business,” said Joseph Hosey, vice president and general manager for UL in Canada. “The cannabis supply chain is extremely integrated and will become more global as the industry evolves, creating new challenges. We’ve spoken with key players who are building premium brands and the safety and security of their operations is paramount.” UL, a global safety science organization, looks to provide clarity and expertise to the legal cannabis industry in understanding regulatory compliance while promoting safety, security and sustainability across the industry supply chain.
In early 2018, UL brought together cannabis investors, regulators, supply chain contributors and industry stakeholders to develop the very first National Standard of Canada through the consensus process strictly regulated by Standards Council of Canada. Outside of the cannabis product itself, the primary concerns for a start-up business are the safety of the building, security of the premises and the equipment to be used for operations. These are all addressed in CAN/ULC-S4400:2019, the Standard for Safety of Premises, Buildings and Equipment Utilized for the Cultivation, Production and Processing of Cannabis, published in March 2019.
With this standard, a benchmark was established in order for all participants to engage in a level playing field, and for regulators to use standard metrics to evaluate the safety and security of not just the building and operations of a cannabis company, but the well-being of its employees and the community in which it is located.
To complement this standardization approach, UL developed an audit service to further provide interested parties with a single resource to navigate every step of the complex regulatory requirements, with the goal of enabling safety and security compliance for a cannabis business.
This facility audit service is targeted at operations that are looking to apply for any type of cannabis licence – federal, province or local municipality – and need help understanding how to comply with the required regulations. It’s important to note that obtaining a cannabis licence at the federal and/or provincial level does not necessarily mean that the “Open For Business” sign can be turned on. A cannabis business is still a business and therefore needs to understand and pay attention to not only the provincial and local requirements as they relate to cannabis but also general business regulations – from general safety concerns to codes(e.g., building, fire, electrical, etc.), to workplace health and safety.
A facility audit aims to help businesses:
- Address knowledge gaps in the regulatory framework that may be inhibiting success
- Identify and address regulatory compliance risks that may exist at a cannabis facility
- Provide the general public with peace of mind that a local facilities’ conditions are safe
Visit our cannabis facility audit web page to learn more.
A strict regulatory framework is crucial to evolve the current legal cannabis market into an industry that is more responsible, effective and sustainable.
This article was originally published in the March edition of Cannabis Prospect Magazine - http://cannabisproonline.com/article/facility-audits-provide-regulatory-structure/.