Understanding Cannabis Cultivation Licensing in Canada

A practical guide to Health Canada licence types and how to choose the right one

So you want to build a micro cultivation site, a standard facility, or a medical focused operation. Perfect. The first win is choosing the right licensing path, because the licence type you pick affects your facility design, security scope, SOPs, staffing, and your long term ability to scale.

This guide covers the current Health Canada licence categories for cultivation and production, plus the most important updates that changed the micro landscape in 2025. Canada+1

Step 1: Decide what you want to do

Before you pick a licence, clarify your intent:

1. Cultivate cannabis plants and sell into the regulated market

2. Process cannabis into products like dried flower packaging, extraction, edibles manufacturing, etc

3. Sell for medical purposes through the medical channel

4. Grow for personal medical use as an individual patient, not a commercial business

Health Canada licensing for businesses is handled through the Cannabis Tracking and Licensing System, CTLS. Canada

The main Health Canada cultivation licence types

Health Canada issues licences for cultivation as subclasses, with micro and nursery having specific limits. Canada+1

1) Standard cultivation

Standard cultivation is the broad commercial cultivation category. It is typically used for larger scale operations, expansion minded projects, and businesses that want more runway than micro class limits.

Best for: operators planning scale, multiple rooms, larger post harvest workflows, or future expansion.

2) Micro cultivation

This category changed in a big way.

As of March 12, 2025, micro cultivation allows up to 800 m² of grow surface area. Canada+1

Important detail: Health Canada talks about grow surface area, not just building size. Their guidance includes examples of how surface area is calculated, including vertical surfaces, tables, and seasonal changes. Canada

Best for: craft operators who want a focused facility, strong quality control, and a clean path to licensing without building a massive site.

3) Nursery

Nursery can be standalone or paired with other activities depending on what you are doing.

As of March 12, 2025, the nursery limits are:

• Up to 200 m² of grow surface area for flowering and budding plants

• Up to 20 kg of harvested flowering heads at any time Canada+1

Best for: genetics, starting material, propagation, and seed focused operations.

Processing licences

If you want to manufacture, package, extract, or create cannabis products, you will need a processing licence in addition to cultivation.

Standard processing

Standard processing is the broader category for larger product manufacturing, multiple product lines, and higher volumes.

Micro processing

Micro processing has an annual limit on the amount of cannabis you can possess that was sold or distributed to you, measured as dried cannabis equivalent.

As of March 12, 2025, the limit is:

• Up to 2,400 kg of dried cannabis equivalent per calendar year Canada+1

Health Canada also notes an important nuance: that annual possession limit does not apply in the same way if the only cannabis you possess is grown from your own micro cultivation licence at the same site. Canada

Best for: smaller scale processors, craft brands, and facilities that want to stay lean while still producing regulated products.

Sale for medical purposes

If you plan to sell into the medical channel, Health Canada has a sale for medical purposes licence subclass. Department of Justice Canada

Health Canada’s application guidance also highlights that sale for medical purposes applications have specific documentation expectations, including proposed record keeping methods. Canada

Best for: businesses selling directly to registered medical clients, or operating within the medical sales framework.

Medical growing for individuals

This is where a lot of people get crossed up.

Personal medical cultivation is not the same as a commercial Health Canada licence.

Canada’s medical framework for individuals is commonly referred to as ACMPR in everyday conversation, but the key point is this: it is for personal or designated production and it is not a commercial sales pathway.

If your goal is to operate a business and sell cannabis, you are in the commercial licensing stream above.

What this means for facility planning

A few practical truths that save people a lot of pain:

Building size is not the same as grow surface area

Micro and nursery limits are based on grow surface area, and Health Canada provides examples of how to calculate it. Canada
You can design a larger building and still stay within a micro threshold, but your cultivation area must comply.

Your layout must support compliance and daily workflow

Licensing success is not just forms. It is the facility logic:

• secure flow of people and product

• clean and dirty separation

• sanitation points

• storage and waste handling

• post harvest capacity that matches harvest rhythm

CTLS readiness matters

Health Canada’s licensing pages emphasize preparation and correct submission through CTLS, including applying for cultivation, processing, and sale for medical purposes. Canada+1