Cannabis security clearance

Buying a licensed producer means buying a licence that depends on the people running it. Under section 62(7) of the Act, the Minister may refuse to issue, renew or amend a licence if a security clearance in respect of the application has been refused or cancelled, and section 65 allows revocation if one has been cancelled since issuance.

Who must hold one

Section 50 of the Regulations lists, among others, an individual licence holder, a corporate holder’s directors and officers, any individual who exercises or is in a position to exercise direct control over the corporation, the responsible person, the head of security and, for cultivation, the master grower. The Minister may also name others under section 67(2) of the Act.

What to ask in a transaction

• Who will hold each role after closing, and do they already hold a clearance?
• Section 51(c) lets an individual who will be required to hold one if a pending business transaction is completed apply in advance.
• Section 34 requires notice to the Minister of the replacement or addition of an individual in most of those roles within five days after the change.

A clearance has a validity period that must not exceed five years under section 56. See cannabis cultivation facility due diligence.