Standard Cultivation Opportunity

With the ratification of the Cannabis Act in October 2018, Canada became the first G7 country to legalize recreational cannabis on a federal level. According to Statistic Canada,” the cannabis market in Canada contributes upwards of $17.27 billion to its GDP, with legal recreational sales expected to account for approximately 60%.” “Globally, the market is forecasted to hit USD 97.3 billion by the end of 2026” (Fortune Business).

Canadian sales of legal recreational cannabis totalled 2.6 billion in 2020, which represents a 120% increase in sales compared to 2019.

The Cannabis Act, 2018, requires that Health Canada’s Minister of Health receives and considers any application filed for Commercial Cannabis Licence, including the Cultivation Class. There are two Classes of Cannabis Cultivation Licences.

Standard Cultivation

A facility granted a Standard Cultivation Licence is more than (200 m2 or 2150 ft2). Standard cultivation is for operations that want to obtain a licence for the large-scale growing of cannabis plants.

Micro-cultivation

The licence permits cultivation space of up to no more than 200 square metres (approximately 2,152 square feet), and applicants are subject to less stringent security requirements than those applying for a Standard Cultivation Licence.

The Cultivation Class Licences allow entrepreneurs to tap into a booming industry and market a premium, locally-grown product. There are no limits for Standard Cultivation Licences, unlike Micro-cultivation Licences. Additionally, new regulations stemming from the Cannabis Act, 2018, grant all cultivation applicants a one-time influx of black market genetics; this poses a tremendous opportunity for individuals to introduce new strains to Canada’s legal market.

A Cultivation Class Licence would allow an individual or corporation to:

Produce Cannabis Seeds
Grow Cannabis Plants
Harvest Cannabis Plants
Produce Fresh and Dried Cannabis

A Cultivation Class licence would allow for
supplemental or associated activities such as:

Possession
Transportation
Storage
Destruction
Intra-Industry Sale of Cannabis
Cultivation of Industrial Hemp Plants

A Cultivation Class Licence only allows cultivation and wholesale sales to authorized Licenced Holders. It does not allow an individual or corporation to label, package, or sell cannabis directly to the public or straight to authorized retailers or consumers. A Sale for Medical Purposes Licence is required to sell medical cannabis online directly to consumers. A Retail Cannabis licence is required to sell recreational cannabis online directly to consumers or through over-the-counter sales. An applicant can apply for these licences simultaneously.

The Act, allows individuals and organizations to obtain authorizations for permits and licensing for multiple activities at a single location. For instance, an individual could obtain the authorization, licences, and permits to cultivate, process, and then sell cannabis directly to the public.

Health Canada’s Cannabis Act, 2018, has established strict application requirements followed by a prescribed licensing procedure to ensure applicants have met all regulatory requirements. Once approved, Health Canada exercises ongoing oversight to ensure cannabis products are produced legally and fit for their intended use. Under the Act, Health Canada can issue, restrict, deny, amend, renew, revoke, or suspend a licence.

The Act’s overall goal is to create a legal cannabis industry that would essentially outcompete with the current illegal market.

GrowLegally believes in a highly competitive, diverse, and legal industry composed of many different size operations and activities, all working together to promote Canada’s new legal marihuana system.

Applicants are free to choose which licences and permits they want to apply for with the ability to add allowable authorized activities.

GrowLegally will work with your company from Seed to Success from Licensing to developing a strategic growth strategy!

Apply Now! Get licenced and Join our Global Cannabis Inter-Industry Ecosystem!

LICENSING TYPES

NEWSLETTER

Subscribe to our newsletter

Get the latest updates on new products and upcoming sales

TOLL FREE: 1(888)909.6336

Growlegally

Commercial grow

EXPLORE THE BOOMING CANNABIS CULTIVATION MARKET

With the ratification of the Cannabis Act in October 2018, Canada became the first G7 country to legalize recreational cannabis on a federal level. According to Statistics Canada, the cannabis market contributes approximately $17.27 billion to Canada's GDP, with legal recreational sales making up around 60% of that total. The global cannabis market is projected to reach USD 97.3 billion by 2026, driven by increasing legalization and consumer demand (Fortune Business Insights, 2023).

In Canada, legal recreational cannabis sales totalled $4 billion in 2022, up from $2.6 billion in 2020, reflecting the market's rapid growth. This surge represents a significant opportunity for those interested in entering the cannabis cultivation sector.

CLASSES OF CANNABIS CULTIVATION LICENSES

There are two main classes of Cannabis Cultivation Licenses:

Standard Cultivation

  • Facility Size: More than 200 m² (2,150 ft²).
  • Focus: Large-scale cultivation for operations seeking to produce high volumes of cannabis.
  • Market Opportunity: Ideal for large-scale operations aiming to produce a substantial cannabis supply for wholesale distribution.

Micro-Cultivation

  • Facility Size: Up to 200 m² (2,152 ft²).
  • Security Requirements: Less stringent than Standard Cultivation licences.
  • Focus: Smaller-scale operations, often specializing in niche, high-quality strains.
  • Market Opportunity: Suited for craft cannabis growers looking to market premium, locally-grown products.

Licensing and Regulatory Overview

A Cultivation Class License allows individuals or corporations to:

  • Produce cannabis seeds
  • Grow and harvest cannabis plants
  • Transportation
  • Storage
  • Intra-industry sales of cannabis

Note: This license only allows cultivation and wholesale sales to authorized licensed holders. It does not permit direct sales to the public or retailers. A Sale for Medical Purposes License is required to sell medical cannabis online directly to consumers. For recreational cannabis, a Retail Cannabis License is necessary for online and over-the-counter sales. Applicants can apply for these licenses simultaneously to maximize business potential.

Health Canada's strict application requirements and ongoing oversight ensure that all licenced activities meet regulatory standards. Once approved, licensees can leverage the one-time influx of black-market genetics, presenting a unique opportunity to introduce new strains into Canada’s legal market.

Strategic Growth and Industry Impact

The overall goal of the Cannabis Act is to create a legal cannabis industry capable of outcompeting the illicit market. GrowLegally is committed to fostering a competitive, diverse, and legal industry composed of various operations and activities, all working together to support Canada’s cannabis ecosystem.

Applicants can select the licenses and permits that align with their business goals, with the flexibility to add authorized activities as their operations grow. 

Market Potential and ROI 

Obtaining a Cultivation Class License presents a lucrative opportunity for entrepreneurs to tap into a booming industry. The ROI for cannabis cultivation varies depending on the scale and efficiency of the operation. On average, a well-managed cannabis cultivation facility can expect a gross profit margin ranging from 50% to 60%, depending on factors such as yield, quality, and market demand. 

Sign up to receive a free copy of our Cost Analysis Estimates

Grow Your Business with GrowLegally

GrowLegally will work with your company from Seed to Success, guiding you through licensing and helping develop a strategic growth strategy tailored to your needs.

COST ANALYSIS (ESTIMATES)

INITIAL SETUP COSTS:
Standard Cultivation:
Typically ranges from CAD 1 million to CAD 2million, including facility build-out, security systems, and initial working capital.

Micro-Cultivation:
Generally ranges from CAD 500,000 to CAD 1,000,000, making it more accessible for small-scale growers.

REVENUE POTENTIAL:
Standard Cultivation: Annual revenues between CAD 5 million and CAD 20 million.

Micro-Cultivation:
Annual revenues between CAD 500,000 and CAD 2 million.

INVESTMENT & RETURN

Starting a cannabis retail store requires an initial pre-operational capital investment, typically between $55,000 and $100,000. These costs generally include:

Rent/Carry Costs (First and Last + 3 months): Approximately$15,000 (We recommend keeping rent under $3,000 per month)
AGCO Licensing Fees: Around $10,000
Construction Fit-Out: Between $15,000 and $50,000
Inventory Purchase: Ranging from $15,000 to $30,000

With a conservative estimate, annual revenues for a well-run store in a decent location are projected to be between $650,000 and $1.2 million. Based on current market data and a lean operational structure, you can expect gross profits to be just under 30% to 40% of your annual revenue.

Sign up to receive a free copy of our Cost Analysis Estimates

Newsletter
SUBSCRIBE TO OUR NEWSLETTER

Get the latest updates on new products and upcoming sales

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.