The short answer
Since March 12, 2025, Health Canada's micro-cultivation licence allows up to 800 m² of grow surface, the nursery licence allows up to 200 m² for flowering plants, and micro-processing allows up to 2,400 kg of dried cannabis a year. That makes smaller buildings, and parts of larger ones, more workable for licensed production. Health Canada also allows more than one licence holder in a building, as long as each has its own separate site. In BC, small producers can add a farm-gate store and deliver directly to retailers.
What changed on March 12, 2025
Health Canada's streamlining amendments (SOR/2025-43) came into force on March 12, 2025 (Health Canada – Summary of changes). The main thresholds for the micro and nursery classes changed as follows (Canada Gazette, Part II, SOR/2025-43):
| Licence | Before March 12, 2025 | Since March 12, 2025 |
|---|---|---|
| Micro-cultivation: grow surface | 200 m² | 800 m² |
| Nursery: flowering/budding surface | 50 m² | 200 m² |
| Micro-processing: annual quantity | 600 kg dried equivalent | 2,400 kg dried cannabis (or equivalent) per calendar year |
Other changes in the same package that affect how a site operates include (Health Canada):
- A security-cleared person no longer has to be on site when activities with cannabis are being conducted.
- For standard cultivation, standard processing and sale for medical purposes licences, perimeter intrusion detection is no longer required, motion-activated recording is considered sufficient, and storage areas have fewer location and entry-log requirements.
- Cultivation waste can now be stored in operations areas, including at outdoor grows.
What each small-scale licence allows
| Licence | Activities | Key limit |
|---|---|---|
| Micro-cultivation | Produce cannabis plants, seeds, pollen, fresh and dried cannabis | Up to 800 m² of grow surface, counting all horizontal and vertical growing surfaces |
| Nursery | Produce plants, seeds and pollen as starting material | Up to 200 m² for flowering and budding plants (no limit for vegetative plants); up to 20 kg of harvested flowering heads at any time; flowering heads, leaves and branches destroyed within 30 days of harvest |
| Micro-processing | Produce all types of cannabis other than by synthesis, cultivation, propagation or harvesting | Up to 2,400 kg dried cannabis (or equivalent) per calendar year; the limit does not apply if all the cannabis comes from the licence holder's own micro-cultivation licence at the same site |
(Health Canada – Applying for a micro-cultivation, nursery and micro-processing licence)
Because the 800 m² limit counts every growing surface, including vertical tiers, the building footprint a micro-cultivator needs depends heavily on its racking and room layout. Applicants must show their calculations in the site evidence package (Health Canada).
What kind of building suits a micro or nursery site
Health Canada's physical security guide for the micro classes requires a physical barrier around the site, which "can be a fence, the building envelope, or a shared wall," a separate barrier around storage areas, and access restricted to authorized people (Health Canada – Physical security measures for micro-cultivation, nursery and micro-processing). The site must be fully built, with an operational and functional site shown in the evidence package, when the application is filed (Health Canada).
Buildings that tend to work well include:
- Former licensed facilitiesExisting grow rooms, HVAC and security make a smaller licensed operation simpler to set up, especially when a large facility can be divided.
- Industrial bays and small warehousesUnits with solid demising walls, adequate electrical service and room for air handling can suit indoor micro-cultivation or micro-processing.
- Greenhouses and farm buildingsNurseries and some micro-cultivators use greenhouse space; on ALR land, the ALR rules and local zoning decide which structures are protected.
Other practical points: federal rules require air filtration for buildings where cannabis is produced, and the province recommends odour controls such as carbon filters or biofilters (BC Ministry of Environment – Cannabis waste management fact sheet). Electrical capacity, water supply, wastewater handling and zoning all need to be confirmed for the specific property. Liquid wastes such as leachate and fertigation water cannot be discharged to the environment without authorization, and discharge to a municipal sewer is only an option if it meets municipal standards (same fact sheet), so drainage and sewer connections are worth checking early. See zoning in BC and environmental and building due diligence.
Dividing a large facility among several licence holders
Health Canada's guidance says there is no limit to the number of licence holders on a single piece of land or in a building. More than one licence holder is allowed if each is within a separate site or defined site perimeter (Health Canada – Before you start applying). The same guidance sets out conditions that shape how a building would have to be divided:
- A site is an area used exclusively by the licence holder, made up of at least one building or part of a building.
- Each licensed site needs a unique civic or mailing address.
- Each licence holder needs separate security measures, good production practices systems and records.
- Only the licence holder can carry out activities on its site. Areas, rooms or buildings used by anyone else must be outside that site's perimeter, so shared spaces such as common corridors or loading areas would sit outside every licensed site.
- Certain combinations of licences are not permitted at the same site.
For a landlord, this points to a multi-tenant layout with separate addresses, demised units, separate secure entrances and common areas kept outside each tenant's licensed perimeter. Lease terms, shared utilities and building code requirements for separating occupancies also need to be worked out. See leasing to a cannabis tenant.
Health Canada allows several licence holders in one building, but each must have its own exclusive, separately secured site with its own address. Plan the demising, entrances and shared areas around that rule before marketing units to micro licence holders.
BC farm-gate sales: Producer Retail Store licence
Since November 30, 2022, federally licensed cultivators, micro-cultivators and nursery licence holders in BC have been able to apply for a Producer Retail Store (PRS) licence (BC Government News, October 4, 2022). Key conditions from the province (Government of BC – Apply for a Producer Retail Store licence):
- Holders of only a federal processing licence are not eligible.
- The store must be adjacent or sufficiently proximate to the cultivation site and must not overlap with the federally licensed area. The store address cannot change after the application is submitted.
- The LCRB may consider the licence after the local government or Indigenous Nation recommends approval.
- The store can sell cannabis the producer grew, products from BC Cannabis Wholesale, and accessories.
- Fees are listed as $7,500 to apply, $1,500 for the first year's licence and $1,500 for annual renewal.
For property owners, this means a production site with road access, parking and a zoning-compliant storefront location can support a retail component, subject to local government support.
BC direct delivery to retailers
BC's Direct Delivery program launched on August 15, 2022 (StratCann, July 6, 2022). It lets eligible BC cultivators ship products directly to licensed retail stores instead of through the central warehouse. According to the Liquor Distribution Branch, eligible cultivators are BC producers of less than 3,000 kg of dried, unpackaged cannabis a year, and there are standard, section 119 Indigenous Nations, and Producer Retail Store streams. The LDB still sets the wholesale price: producers must charge the wholesale price registered with the LDB at the time of sale (BC Liquor Distribution Branch – Direct delivery). At launch, StratCann reported that nurseries producing only plants and seeds had no volume cap (StratCann).
How Sean can help
Sean Phillips, REALTOR® with Coldwell Banker Executives Realty, has worked on Health Canada licence applications since 2014 as a site-evidence and licensing-readiness consultant, and sells cannabis and commercial buildings across BC. He can help owners assess whether a building, or part of one, suits micro-cultivation, nursery or micro-processing tenants, and market it to them. Paid consulting (remote video assessment, on-site viability assessment or pre-purchase site audit) is quoted per site. Contact Sean or see current listings.