Canada import and export regulations

There seems to be a lot of mis-information around the selling of US isolate and distillate in Canada, and vice versa, so I thought I would create a little primer on this topic.

There are two cannabis economies in Canada: the legal market and the “grey” market.

The Legal Market: In Canada, cannabis was legalized at the federal level in 2018. As a part of the legalization, which was called The Cannabis Act, a category of entities called “Licensed Producers” was created. Licensed Producers, or LPs, are able to obtain licenses for cultivation, processing, or sale of cannabis, or any combination thereof. The licensing process is lengthy, costly, and limited to those who pass an exhaustive security screening. In order to legally do extraction for commercial purposes, you need to be an LP.

In October of 2019, cannabinoid-infused foods and beverages became legal in Canada. However, no manufacturer can sell any food or beverage containing any cannabiniod unless they are an LP. As of today, there are 308 such license holders in the country, although a certain number of them are shell entities that never got any further than licensing.

The “Grey” market: Medical marijuana legalization pre-dates the Cannabis Act. Medical legalization allowed individuals to cultivate their own plants for their own use, and also allowed them to hire someone to grow it on their behalf. Companies sprung up that grew for hundreds of licensed individuals all in one place, so they were legally able to build large grow operations that were never really overseen by the government. There are still lots of these operations left, they’re referred to as MMP, or Medical Marijuana Producers. These companies are becoming fewer as their licenses expire and they are required to either transition to the legal market or quit altogether.

What happened, of course, is that those individual licensees ramped up thier licenses to the point where they were each allowed to grow 190 plants for “personal use”. The MMP would then sell off the “surpus” that the licensees didn’t consume - the vast majority of what was grown.

The buyers of all this surplus bud has been semi-illegal dispensaries that are located on native land, where they are immune to prosecution for what would otherwise be an illegal sale. Nobody that isn’t native is allowed to buy from these places, but of course people do and there isn’t much energy put into enforcement.

A market for extraction of these products grew, and bandit labs appeared all over the country. There’s plenty of oil being made, but it can only be sold through this market and it is not subject to quality control or disclosure like the legal market stuff is.

So if you hear about people getting oil, disty, or isolate into Canada from the US, in most cases that is an illegal transaction under Canadian and US law. See below.


Health Canada, the agency in charge of the legal market, released this recently about import and export of cannabis:

"The import and export provisions for cannabis implement Canada’s international drug treaty obligations. Canada is a Party to the Single Convention on Narcotic Drugs, 1961 as amended by the 1972 Protocol, the Convention on Psychotropic Substances, 1971, and the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988. Health Canada has an obligation to maintain control over the movement of cannabis in a manner consistent with these international drug control conventions. The import and export of cannabis may only be authorized for medical and scientific purposes and within the parameters set by the international drug conventions.

The Cannabis Regulations set out the restrictions pertaining to the import and export of cannabis. Only licence holders under the Cannabis Regulations may import or export cannabis-and only for medical or scientific purposes. Under the Cannabis Act and its Regulations, the import and export of cannabis for any other purpose (such as distribution or sale for non-medical purposes) is strictly prohibited.

Consistent with international drug conventions, importing or exporting cannabis for medical or scientific purposes requires a permit from Health Canada for each shipment. While each application will be assessed on its merit, Health Canada’s general policy is to issue import or export permits only in limited circumstances, such as:

  • Importing starting materials (e.g., seeds, plants) for a new licence holder;
  • Exporting cannabis products to another country that has a legal regime for access to cannabis for medical purposes; or
  • Importing or exporting small quantities of cannabis for scientific purposes (e.g., research or testing).

Before issuing an import or export permit, Health Canada considers the following:

  • Canada’s obligations under international treaties;
  • Whether the application is consistent with the relevant provisions in the Cannabis Act and its regulations;
  • Whether the import or export will be used solely for medical or scientific purposes;
  • In the case of exports, whether the country of final destination has issued an import permit;
  • Whether there are risks to public health given that imported products are not subject to the same strict production standards or Health Canada inspections;
  • Whether there are risks to public safety and security, including the risks of diversion; and
  • For the import or export of drugs containing cannabis, whether import/export requirements of the Food and Drugs Act and its regulations have been met.

While the import or export of industrial hemp grain or seed also require an import or export permit issued under the Industrial Hemp Regulations , the considerations set out in this bulletin do not apply to the issuance of such permits. "

If you’re approached by anyone wanting to move disty or iso between our two countries, be certain that you are dealing with a Licensed Producer on the Canadian side if you want to do it legally.

John

6 Likes

Do u know anyone who can import large volumes of isolate legally

Thank you for this great explanation. You are very correct in Canada you need to be a licensed producer to buy or sell CBD or THC and derivatives in anyway. Licensed Producers can import for the medical market, which requires a prescription to buy from the Licensed Producer directly or for research. At no point can imported product ever be exported again. So US CBD cannot come to Canada then to the EU. Imported CBD can also never be sold in licensed retail stores.

Medical patients in Canada do still have the right to grow their own medication and it is a protected human right. For every gram a Canadian is prescribed they can grow 5 plants with proper documents in place. Many in Canada hold these licenses legally and you can pay a fee to get one up to 500+ plants but none of this product is legal for trade. It is meant to allow patients access to cheap medicine. One Designated grower can grow for 2 other patients so a site can even be as big as 1500 plants but again only for personal use by the three patients. This is called our ACMPR program and we have over 30k of these licenses in place.

To sell or trade in any THC or CBD products in Canada you need to be a licensed producer, processor, nursery or micro operation. We have 308 currently and to find out if you are speaking with a real licensed producer they must be on this list. Any real licensed producers or their employees will have a real company domain email to verify their identity. Rebel Cannabis is my oldest company in the space and not an LP but I have my LP email address I use when doing business.

https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/industry-licensees-applicants/licensed-cultivators-processors-sellers.html

Each license category is allowed to do different things and not all are allowed to sell to the recreational market. You need a sales license in every product category you wish to sell in. On the chart above under “Classes of cannabis the licence holder is authorized to sell” it is listed what each licensed producer can sell and to which market. Canada has sales licenses for edibles, extracts, oils, flower, plants/seeds and topicals.

Hemp licenses are for hemp cultivation only. No extracting or CBD derivative trade allowed.

All Licensed Producers can sell B2B with each other and import and export.

On top of this like the US, every province has a different retail model, some are privatized and a licensed producer can sell direct to a license retail store and some have heavy regulatory bodies that control distribution and pricing like Ontario.

For any Canadian Licensed Producer to ship to the EU they must have EU-GMP certification or equivalency. There are less than a handful of these facilities in the country.

In Canada distillate runs $20-50k/kg, we are allowed THC past 0.03 so most labs sell at this stage and have no reason to go to isolate and suffer a large product loss. We only have hemp up to about 8% so processing hemp is not big business yet. There are less than 20 legal labs in production, many license holders for processing are our analytics labs, the rest are packaging companies. Most of the labs are small scale, making winterized crude or distillate to make edibles, edible oils and vape carts. There are only 5 or so ethanol extraction sites and less than 3 with hydrocarbon abilities in the entire country.

I only know one lab making and selling isolate now in Canada. Do not ask which one as they are not verified so they are not selling anything here.

3 Likes

Hey Terpy,

Your post is from a while back, but I can import large volumes of isolate legally. Let me know if you are still interested. You can contact me at andrewkim@nimbusorganics.com
Look forward to speaking to you.

Best,
Andrew

Nice post man some good information in here

Thank you!

Andrew - I’ve been down this road many times and nobody has been able to legally import U.S. Isolate into Canada. Even if you could, you can’t sell it in Canada or export it without full documentation (CTLS, COC) that it was grown and processed in Canada. How are you able to do this?

Correct, products can not come from US derived hemp and enter the CTLS legally. @nimbus

We do have Isolate on the ground in the CTLS system from our Canadian partners if there is interest from anyone out there.

1 Like

I doubt that as we are the only producer in Canada making isolate in bulk and do not have any partners or brokers we work with. Everyone makes this claim but it is the policy we do not work with third parties ever and our contracts do not allow the resale of our product.