Past pot conviction won’t automatically prevent involvement in cannabis industry

OTTAWA — The federal government is imposing strict regulations aimed at ensuring organized crime doesn’t infiltrate the recreational marijuana market once cannabis becomes legal in Canada on Oct. 17.

But officials say that doesn’t mean individuals with past convictions for possession or even trafficking of cannabis will automatically be excluded from participating in the burgeoning pot industry.

Key personnel involved in a company that applies for a Health Canada licence to grow, process or sell cannabis will have to receive security clearances. That includes anyone who directly or indirectly controls or influences the operations of the company, such as directors and officers of the company and its parent company, the head of quality assurance and the master grower.

Officials say each case will be assessed individually to determine if a person has any connection to organized crime or a history of serious criminality. But a past pot conviction, in itself, won’t necessarily disqualify someone.

Overall, the regulations are aimed at allowing a “diverse, competitive, legal industry comprised of both large and small players while prescribing a high standard for safety and security and specific measures to prevent diversion of cannabis into or out of the regulated system,” said one official during a technical briefing Wednesday.

They include a tracking and licensing system aimed at monitoring the movement of cannabis through the supply chain, from producers to retailers, to ensure that none is diverted to the black market.

Licence holders will also have to report annually details of financial transactions with investors and anyone else in a position to directly or indirectly control the licence holder. That includes money invested or loaned and the benefit received as a result. This regulation is aimed at addressing concerns that organized crime may be using tax havens to anonymously invest in and control the legal pot industry.

The regulations spell out detailed requirements for selling marijuana in plain, child-proof packages that carry mandatory health warnings, information about potency and a red, black and white stop-sign shaped symbol intended to alert consumers that the product contains cannabis.

They allow both indoor and outdoor cultivation of marijuana plants but in either case, a producer must ensure the site is designed to prevent unauthorized access and is replete with video surveillance, intrusion detection systems and physical barriers to the site.

And they ban the use of unauthorized pesticides and require mandatory testing for other contaminants.

Health Canada will license both standard-scale and small-scale cannabis cultivation and processing operations. The regulations define micro-cultivation as a growing area that occupies no more than 200 square metres and micro-processing as an operation that produces no more than 600 kilograms of dried cannabis per year.

While there have been some complaints that the thresholds for micro operations are too small to allow for profitable businesses, the regulations do not limit the number of micro licences an individual may obtain.

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