Health Canada Launches Public Consultations on Cost Recovery Approaches for the Regulation of Cannabis

Published: July 12, 2018

Health Canada Launches Public Consultations on Cost Recovery Approaches for the Regulation of Cannabis

The Cannabis Act has been passed by Parliament and will come into force on October 17, 2018.

Last year, the Government of Canada committed to providing the necessary resources to implement the Cannabis Act. At the same time, the Government committed to fully recovering the costs of regulating the new cannabis industry. Cost recovery will ensure that those who benefit from the new legal market will pay the costs of regulating cannabis, which will reduce the cost to Canadians.

Today, Health Canada is launching a 30-day public consultation on the proposed approach to cost recovery for the regulation of cannabis. The proposed cost-recovery approach is guided by the principles that fees should allow for both larger and smaller players in a diverse market. The approach proposes to collect no more than the cost of delivering the regulatory program.

The cost-recovery proposal includes four fees:

  • A fee for screening licence applications;
  • A fee for conducting security screening of key persons;
  • A fee for reviewing applications to import or export cannabis for scientific or medical purposes; and
  • An annual regulatory fee to cover other regulatory costs, including the detailed review of licence applications, the issuance of licences, inspections, and compliance and enforcement activities.

To promote a diverse market, Health Canada proposes to scale fees according to the size of the business and to provide for lower fees for the newly proposed micro-scale licence holders. Some classes of licences—namely those for research, analytical testing and hemp production—would be exempt from fees. To maintain access to cannabis for medical purposes, those who produce, cultivate and sell cannabis exclusively for medical purposes would be exempt from the annual regulatory fee.

The proposed approach to cost recovery is outlined in the consultation paper Proposed Approach to Cost Recovery for the Regulation of Cannabis.