Feds reject 3 pot growers for every one accepted, data shows

TORONTO Even as the number of legal cannabis growers has grown rapidly, the federal government has denied three licence applications for every one it has accepted.

As of Feb. 1, Health Canada, which oversees the legal medical marijuana program, had granted 89 licences and rejected 268, according to data provided by Health Canada. The number of licensed producers (LPs) has since grown to 93.

People are rejected for a wide range of reasons, said Deepak Anand, vice-president of government relations for consulting company Cannabis Compliance Inc. “It’s a very stringent background check. It’s not like one of the corporate TSX-guy checks, where they go through your criminal record … In many cases they go talk to your neighbours, they figure out what you’re doing,” said Anand. “Their biggest concern is making sure that there’s no possible involvement of the black market or organized crime, or even you diverting products to anyone.”

The rate of rejection appears to vary considerably from province to province. In B.C., 100 applications were rejected, while only 18 were granted. Ontario saw 96 refusals, but had a much higher success rate, with 48 licences granted.

A lot could change if the government changes its rules around background checks, as is hinted at in the draft regulations accompanying Bill C45, the Cannabis Act.

“Health Canada acknowledges that there are individuals who have histories of non-violent, lower-risk criminal activity (for example, simple possession of cannabis, or small-scale cultivation of cannabis plants), who may seek to obtain a security clearance so they can participate in the legal cannabis industry,” the draft regulations say. The draft document leaves open the question of “whether these individuals should be permitted to participate in the legal cannabis industry.”

But Anand suggested that, barring an intervention from the Senate, the new rules will likely allow people with minor pot convictions to make it through the security screening.

He expects as many as 60 per cent of the 268 rejected applicants to reapply, which would swell the already significant ranks of applicants currently under review.