Health Canada Changes to Cannabis Application Process
May 13, 2019
By TheraEditor
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Health Canada Announces Changes
Health Canada announced a change on May 8, 2019, effective that day that for all new applications a building and physical security measures must be in place. This represents a drastic change to the process whereby Health Canada approved the site location, floor plans, control measures and security applications for key personnel. Brand new applicants now must have the building constructed and largely commissioned, with all physical security in place before they apply into CTLS. Applications for personnel or director security would be submitted and processed simultaneously with the complete review of the application.
Existing applications under the Cannabis Act up to May 8th will receive a high-level review and, if successful, will receive a letter from Health Canada stating there are “no critical concerns”. At that point, the review will cease until an evidence package is received. Health Canada has published three additional guidance documents regarding license requirements — addressing physical security, GPPs and License requirement details.
Reasons Behind the
Change
Health Canada’s official reason for the change was to “improve efficiencies”, stating that 90% of the applicants have failed to move forward. In fact, 70% of projects that had been approved after the Detailed Review stage, have failed to send an evidence package. Health Canada spent considerable resources to review information on projects, but the process stopped because the project never went to the build stage.
Health Canada has struggled to perform application review within their stated standard of service due to the very large number of applications that have been submitted. In addition, each time the regulations have changed, all applicants in progress had to re-submit and the review had to begins again. With 700 applications still in their system, it is apparent Health Canada acted from necessity to put their resources toward reviewing applications that were able to have a building and equipment. There is a team within the agency to review the security aspects of applications, a different team to review the Good Production Practices and other aspects, and a separate team to review license expansion applications. When an evidence package is sent, Health Canada is stating a 60 day period for the detailed review. Whenever new information is requested, the applicant must submit it within 30 days. Expansion applications are said to be reviewed quickly.
Implications In Other
Countries
Unfortunately, many countries have failed
to structure their license processing review process to keep up with demand. When
the laws first allow medical cannabis, licenses are often given based on the
security clearances with only minimal plans in place. The conditional license
is a great advantage to those seeking investment to complete their buildout of
the facility. As applications flood in, we can expect tighter and tighter
license requirements with a more complete project plan being given preference. Several
agencies around the world have followed Health Canada closely and made
requirements to medical cannabis licensing nearly in lock-step as Canada’s
agency changed theirs. The move to providing application review only if a
facility has been constructed, could be seen by regulatory bodies as a way to
reduce the number of applications in backlog.
Timelines in Canada
For applications that are deemed complete, with all security clearance applications submitted, Health Canada will perform a high-level review, and then send a letter stating that there are no major concerns. The applicant will be invited to send their evidence package of readiness once the building is completed and the security system is installed. The evidence package must include all changes to the floor plan, and must show equipment in place capable of cultivating and processing cannabis, including packaging and secure storage. Good production practices (SOPs) which match the process must be included in the evidence package. Applications that TheraCann International has supported through our BenchmarkACT process flow, and transitioned to the CTLS electronic system have been deemed complete. Some received their letter of “no concerns” within a day of the announcement. This enables them to proceed to the BenchmarkBUILD phase, and send their evidence package of readiness once the facility is built.
The new service standard for Health Canada states that when they receive an application, they must respond in 30 days. This standard is being met 90% of the time. Once an evidence package is sent to Health Canada, showing there is a building, physical security and equipment in place, then the application goes back in queue and 60 days is the proposed time to complete the detailed review. At that point, aplicants will either receive questions from Health Canada for clarification, or an inspection to the facility would be scheduled.
Once a license is in place, there is separate department at HC that handles license amendments, such as increases in size, so those should go quite quickly. Most projects start with a smaller canopy space and apply for an increase.
Impact in Canada
This change in the approach to applications
is great news for those with applications already in progress. Our clients’
perception is that their applications greatly increased in value, overnight.
New projects may face reticence from investors to commit to new applications, since the letter of readiness will not be provided until after the project is virtually complete. Companies planning projects may want to consider a smaller start and phasing expansions after licensing. New applications must be very complete and it has become more important that those applications are supported by the best possible team, providing a knowledge base and process flows that guarantee application success.
BenchmarkACT ensures
new applications around the world navigate regulatory screening rapidly and
with confidence. BenchmarkBUILD guides the planning, construction or retrofit
of the pharmaceutical grade facility.
