TORONTO: A new licensing process for legal cannabis producers in Canada limits the ability of smaller companies to attract investment, which could leave the fledgling industry dominated by companies with deep pockets or those who got a foot in the door prior to regulation changes in May, industry executives said.
The licensing process has come under increased scrutiny since CannTrust Holdings revealed this month they were being investigated by Health Canada for selling marijuana grown in unlicensed facilities. Under the prior system, companies would leverage milestones achieved in the application process to attract funding for the next steps, Columbro said.Now to even apply to some day sell cannabis products, a company must have a growing facility built without any guarantee it will receive the license that would make the facility legal and potentially profitable.
Industry analysts, lawyers and producers said the new system is not necessarily a bad thing as it will free up Health Canada time and resources for more serious applicants.