Cannabis Regulations (SOR/2018-144)

Marginal note:Requirement for security clearance

50 The following individuals must hold a security clearance:

• (a) an individual who holds a licence for cultivation, processing or sale;

• (b) in the case of a corporation that holds a licence for cultivation, processing or sale,

  • (i) the directors and officers of the corporation,

  • (ii) any individual who exercises, or is in a position to exercise, direct control over the corporation,

  • (iii) the directors and officers of any corporation or cooperative that exercises, or is in a position to exercise, direct control over the corporation,

  • (iv) any individual who is a partner in a partnership that exercises, or is in a position to exercise, direct control over the corporation, and

  • (v) the directors and officers of any corporation that is a partner in a partnership that exercises, or is in a position to exercise, direct control over the corporation;

• (c) in the case of a cooperative that holds a licence for cultivation, processing or sale,

  • (i) the directors and officers of the cooperative,

  • (ii) any individual who exercises, or is in a position to exercise, direct control over the cooperative,

  • (iii) the directors and officers of any corporation or cooperative that exercises, or is in a position to exercise, direct control over the cooperative,

  • (iv) any individual who is a partner in a partnership that exercises, or is in a position to exercise, direct control over the cooperative, and

  • (v) the directors and officers of any corporation that is a partner in a partnership that exercises, or is in a position to exercise, direct control over the cooperative;

• (d) in the case of a partnership that holds a licence for cultivation, processing or sale,

  • (i) any individual who is a partner,

  • (ii) the directors and officers of any corporation or cooperative that is a partner,

  • (iii) any individual who is a partner in a partnership that exercises, or is in a position to exercise, direct control over the partnership that holds the licence, and

  • (iv) the directors and officers of any corporation that is a partner in a partnership that exercises, or is in a position to exercise, direct control over the partnership that holds the licence;

• (e) in the case of a licence for cultivation, processing or sale, the responsible person referred to in section 37;

• (f) in the case of a licence for cultivation, processing or sale, the head of security referred to in section 38;

• (g) in the case of a licence for cultivation, the master grower referred to in section 12 or 15;

• (h) in the case of a licence for processing, the quality assurance person referred to in section 19;

• (i) an individual who has been designated as an alternate for a position referred to in any of paragraphs (e) to (h); and

• (j) an individual who has been specified by name by the Minister under subsection 67(2) of the Act or who occupies a position that has been specified by the Minister under that subsection.

Marginal note:Eligibility

51 Only the following individuals may submit an application for a security clearance:

• (a) an individual who is required to hold a security clearance;

• (b) an individual who will be required to hold a security clearance if an application for a licence, or for its renewal or amendment, that has been filed with the Minister results in the issuance, renewal or amendment of the licence;

• (c) an individual who will be required to hold a security clearance if a pending business transaction is completed;

• (d) an individual who has been selected for a position referred to in any of paragraphs 50(e) to (h) or as an alternate for such a position; and

• (e) an individual who has been selected for a position that has been specified by the Minister under subsection 67(2) of the Act or who has been notified that the Minister intends to specify them, by name or position, under that subsection.

Marginal note:Checks

52 The Minister may, at any time, conduct checks that are necessary to determine whether an applicant for, or the holder of, a security clearance poses a risk to public health or public safety, including the risk of cannabis being diverted to an illicit market or activity. Such checks include

• (a) a check of the applicant’s or holder’s criminal record; and

• (b) a check of the relevant files of law enforcement agencies that relate to the applicant or holder, including intelligence gathered for law enforcement purposes.

Marginal note:Grant of security clearance

• 53 (1) Before granting a security clearance, the Minister must, taking into account any licence conditions that he or she imposes under subsection 62(10) of the Act, determine that the applicant does not pose an unacceptable risk to public health or public safety, including the risk of cannabis being diverted to an illicit market or activity.

• Marginal note:Factors

  (2) Factors that the Minister may consider to determine the level of risk posed by the applicant include

  • (a) the circumstances of any events or convictions that are relevant to the determination, the seriousness of those events or convictions, their number and frequency, the date of the most recent event or conviction and any sentence or other disposition;

  • (b) whether it is known, or there are reasonable grounds to suspect, that the applicant

    • (i) is or has been involved in, or contributes or has contributed to, an activity that is prohibited by, or conducted in contravention of, any of the provisions of Division 1 of Part 1 of the Act — other than paragraphs 8(1)(a) to (e) — or Subdivision E of Division 2 of Part 1 of the Act,

    • (ii) is or has been involved in, or contributes or has contributed to, an activity that is prohibited by, or conducted in contravention of, any of the provisions of Part I of the Controlled Drugs and Substances Act — other than subsection 4(1) — or subsection 32(1) or (2) of that Act,

    • (iii) is or has been involved in, or contributes or has contributed to, an activity that is prohibited by, or conducted in contravention of, any provision of the Criminal Code relating to fraud, corruption of public officials, terrorism financing, counterfeiting or laundering the proceeds of crime,

    • (iv) is or has been involved in, or contributes or has contributed to, an offence involving an act of violence or the threat of violence,

    • (v) is or has been a member of a criminal organization as defined in subsection 467.1(1) of the Criminal Code, or is or has been involved in, or contributes or has contributed to, the activities of such an organization,

    • (vi) is or has been a member of an organization that is known to be involved in or to contribute to — or in respect of which there are reasonable grounds to suspect its involvement in or contribution to — activities directed toward, or in support of, acts of violence or the threat of violence, or is or has been involved in, or contributes or has contributed to, the activities of such an organization,

    • (vii) is or has been associated with an individual who

      • (A) is known to be involved in or to contribute to — or in respect of whom there are reasonable grounds to suspect their involvement in or contribution to — activities referred to in subparagraphs (i) to (iii), or

      • (B) is a member of an organization referred to in subparagraph (v) or (vi), or

    • (viii) has conspired to commit

      • (A) an offence under any of the provisions of the Criminal Code referred to in subparagraph (iii),

      • (B) an offence referred to in subparagraph (iv), or

      • (C) an offence under any of sections 467.11 to 467.13 of the Criminal Code;

  • (c) whether there are reasonable grounds to suspect that the applicant could be induced to commit an act — or to aid or abet any person to commit an act — that might constitute a risk to public health or public safety;

  • (d) whether there are reasonable grounds to believe that the applicant’s activities, including their financial activities, pose a risk to the integrity of the control of the production and distribution of cannabis under the Act;

  • (e) whether the applicant has had a security clearance suspended or cancelled;

  • (f) whether there are reasonable grounds to believe the applicant has, now or in the past, submitted false or misleading information, or false or falsified documents, to the Minister; and

  • (g) whether an entity has refused to issue a security clearance to the applicant — or has suspended or cancelled one — and the reason for the refusal, suspension or cancellation.

Marginal note:Outstanding criminal charge

54 If the Minister refuses to consider an application for a security clearance because there is an outstanding criminal charge against the applicant that may be relevant to the determination of the risk under subsection 53(1), the Minister must provide the applicant, and any affected holder of or applicant for a licence, with notice of the refusal in writing.

Marginal note:Refusal to grant security clearance

• 55 (1) If the Minister intends to refuse to grant a security clearance, the Minister must provide the applicant with a notice that sets out the reason for the proposed refusal and that specifies the period of time within which they may make written representations to the Minister. The period must start on the day on which the notice is provided and must be not less than 20 days.

• Marginal note:Notice of refusal

  (2) If the Minister refuses to grant the security clearance, the Minister must provide the applicant, and any affected holder of or applicant for a licence, with notice of the refusal in writing.

Marginal note:Validity period

• 56 (1) The Minister must establish a validity period for a security clearance in accordance with the level of risk to public health or public safety — including the risk of cannabis being diverted to an illicit market or activity — posed by the applicant, but the period must not exceed five years.

• Marginal note:Extension of validity period

  (2) If the validity period of a security clearance is less than five years, the Minister may subsequently extend the period to a total of five years if the Minister, taking into account any licence conditions that he or she imposes under subsection 62(10) of the Act, determines that the holder does not pose an unacceptable risk to public health or public safety, including the risk of cannabis being diverted to an illicit market or activity.

• Marginal note:Factors

  (3) The factors that the Minister may consider to determine the level of risk posed by the holder include those set out in subsection 53(2).

Marginal note:Obligation to notify — offences

57 A holder of a security clearance must, without delay, provide the Minister with notice in writing if they are charged with, or found guilty of, an offence under the Act, the Controlled Drugs and Substances Act or the Criminal Code.

Marginal note:Suspension of security clearance

• 58 (1) Before suspending a security clearance, the Minister must have reasonable grounds to believe that the risk to public health or public safety posed by the holder, including the risk of cannabis being diverted to an illicit market or activity, has become unacceptable.

• Marginal note:Notice of suspension

  (2) A suspension takes effect as soon as the Minister provides the holder with a notice in writing that sets out the reasons for the suspension and that specifies the period of time within which they may make written representations to the Minister. The period starts on the day on which the notice is provided and must be not less than 20 days.

• Marginal note:Notice to holder of licence

  (3) The Minister must, without delay after suspending a security clearance, also provide any affected holder of or applicant for a licence with notice of the suspension in writing.

Marginal note:Reinstatement of security clearance

• 59 (1) The Minister must reinstate a suspended security clearance if

  • (a) the reasons for the suspension no longer exist or the holder of the security clearance demonstrates to the Minister that the suspension was unfounded; or

  • (b) the Minister determines, taking into account any licence conditions that he or she imposes under subsection 62(10) of the Act, that the holder of the security clearance does not pose an unacceptable risk to public health or public safety, including the risk of cannabis being diverted to an illicit market or activity.

• Marginal note:Factors

  (2) The factors that the Minister may consider to determine the level of risk posed by the holder of the security clearance include those set out in subsection 53(2).

• Marginal note:Notice of reinstatement

  (3) The Minister must, without delay after reinstating a security clearance, provide the holder of the security clearance, and any affected holder of or applicant for a licence, with notice of the reinstatement in writing.

Marginal note:Cancellation of security clearance

• 60 (1) A security clearance may not be cancelled unless

  • (a) it is suspended and the period within which the holder may make representations in respect of the suspension has expired; and

  • (b) the Minister has determined that the holder poses an unacceptable risk to public health or public safety, including the risk of cannabis being diverted to an illicit market or activity.

• Marginal note:Factors

  (2) The factors that the Minister may consider to determine the level of risk posed by the holder include those set out in subsection 53(2).

• Marginal note:Notice of cancellation

  (3) The Minister must, without delay after cancelling a security clearance, provide the holder, and any affected holder of or applicant for a licence, with notice of the cancellation in writing.

Marginal note:Ineligibility — new application

61 If the Minister refuses to grant or cancels a security clearance, the individual who has been refused a security clearance or the former holder may submit a new application for a security clearance only if

• (a) a period of five years has elapsed since the day on which the refusal or cancellation occurred; or

• (b) a change has occurred in the circumstances that led to the refusal or cancellation.

PART 4Physical Security Measures

DIVISION 1Licences Requiring Increased Security Measures

General Provisions

Marginal note:Security measures

• 62 (1) The security measures set out in sections 63 to 72 apply in respect of the sites set out in the following licences:

  • (a) a licence for standard cultivation;

  • (b) a licence for standard processing;

  • (c) a licence for sale that authorizes the possession of cannabis; and

  • (d) a cannabis drug licence if the amount of cannabis that is sold or distributed to the holder of the licence is, as determined in accordance with the table to section 21, equivalent to more than 600 kg of dried cannabis per calendar year.

• Marginal note:Compliance with security measures

  (2) A holder of a licence referred to in subsection (1) must ensure that the security measures are complied with.

• Marginal note:Equivalency

  (3) The cannabis referred to in paragraph (1)(d) is exempt from the application of subsection 2(4) of the Act and a quantity referred to in column 2 of the table to section 21 in respect of any class of cannabis referred to in column 1 is deemed to be equivalent to 1 kg of dried cannabis.