LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES OBOA AMTS – Session C.15 September 30, 2014 Source of Images: (left to right, then top to bottom) www.london.ctvnews.ca; www.nationalpost.com; www.recorder.ca

Medical Applications of CBD, THC

PRESENTATION OUTLINE MEDICAL MARIHUANA PRODUCTION FACILITIES (MMPF’s) Health Canada Regulations Site Selection & Investigation Municipal & Public Perspectives Case Studies LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

HEALTH CANADA REGULATIONS June 2013 – Health Canada introduced new Marihuana for Medical Purposes Regulations (MMPR) “… to treat marihuana as much as possible like other narcotics used for medical purposes... The regulations will provide access to quality-controlled marihuana for medical purposes, produced under secure and sanitary conditions, to those Canadians who need it.” (Health Canada) March 31, 2014 – Previous Marihuana Medical Access Regulations (MMAR) repealed April 1, 2014 – Authorizations to possess and production licenses under the MMAR expired MMPR: licensing requirements for production facilities LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

Process to Produce Medical Marihuana Notify Local Authorities HEALTH CANADA REGULATIONS FEDERAL REGULATIONS: OLD vs. NEW Former MMAR New MMPR Process to Produce Medical Marihuana Require “Authorization to Possess” Authorized individuals may be licensed to produce own medical marihuana supply or designate an individual to produce on their behalf Personal/small scale production Require producer’s license, subject to MMAR provisions Commercial production Notify Local Authorities No requirement Written notice required to local government, fire authority & police force, advising of proposed site address & activities LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

Process for individual to obtain dried medical marihuana HEALTH CANADA REGULATIONS FEDERAL REGULATIONS: OLD vs. NEW Former MMAR New MMPR Process for individual to obtain dried medical marihuana Individual requires Health Canada authorization (i.e. Authorization to Possess) Individual requires authorization from health care practitioner (i.e. “prescription”) Authorized individuals have three options to obtain supply: 1) produce own; 2) designate production; 3) purchase single strain through Health Canada Authorized individuals register with a licensed producer; variety of producers to chose from that offer a variety of medical marihuana strains Licensed producer fills order and ships via secure courier, directly to individual or health care practitioner, as specified No permission for personal pick-up (e.g. from a pharmacy) LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

HEALTH CANADA REGULATIONS FEDERAL REGULATIONS: OLD vs. NEW Former MMAR New MMPR Production Site No production site location restrictions; allows for in-home production Production limited to a building/place in a building All activities permitted under MMPR are prohibited in a dwelling place Production , distribution & call-centre sites can be separate, but each require separate license Storefronts or retail outlets are not permitted Allows for outdoor production, provided production site is not adjacent to a school, public playground, day care facility, or other public place frequented mainly by persons under 18 years of age Dried marihuana must be kept indoors Produce, package, label marihuana (dried product) only indoors and at the producer’s site Store cannabis (the plant) only indoors and at the producer’s site LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

Site Security Requirements HEALTH CANADA REGULATIONS FEDERAL REGULATIONS: OLD vs. NEW Former MMAR New MMPR Site Security Requirements Non-specific site security measures Applicant to provide a description of the security measures that will be implemented Security provisions to prevent unauthorized access, including: physical barriers, intrusion detection system, visual monitoring and recording devices, monitoring by personnel, secure storage of cannabis in accordance with Health Canada’s Security Directive (e.g. vault) All aspects of business are subject to same security measures under MMPR (e.g. production , distribution and call-centre sites) LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

HEALTH CANADA REGULATIONS FEDERAL REGULATIONS: OLD vs. NEW Former MMAR New MMPR Production Practices No requirements Requirements for dried marihuana to undergo analytical testing, quality assurance approval, and be produced/ packaged/labelled/stored in accordance with sanitation program Air Filtration Areas within a site where cannabis is present must be equipped with an air filtration system to prevent escape of odours, pollen LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION *Conditional Offer Type/Scale of Operation Location, Site and Building Requirements Available Real Estate, List Potential Sites Review of Official Plan and Zoning Engage Municipality Approvals Local Acquire Land/Building Federal Licensing *Conditional Offer LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION Type/Scale of Operation Range from small business operations (10,000 sq. ft. or less) to large floor areas (up to 400,000 sq. ft. +) Multi-unit / multi-tenant configurations Existing site/building or new development Industrial facilities or rural/on-farm/greenhouse operations Production and/or distribution LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

EXAMPLE: Agricultural/Rural Source of Images: peacenaturals.com; instagram.com/PeaceNaturals LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

EXAMPLES: Industrial LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES Source of Images: tweed.com Source of Images: Google Earth LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION Location/Site/Building Requirements Location Separation from sensitive uses Transportation/access Labour force Environmental constraints Site/building condition and layout Capital needs – repair/replacement/repurposing vs. new construction Previous use, potential for contamination and remediation costs Multi-tenant configurations and non-medical marijuana uses Site/building condition audits LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION Location/Site/Building Requirements (cont’d) Site servicing Capacities of public or private water, sanitary; SWM Fire suppression Hydro and gas services Requirements vary by scale and growing method (e.g. hydroponic vs. soil, natural vs. artificial light/heat, ventilation, etc.) On-site power generation (e.g. rooftop solar panels) Security Site and building controls and surveillance Local availability of security services Emergency services LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION Official Plan and Zoning Land use designation and zoning Industrial/employment area focus Agricultural/rural area Limited in commercial areas Not residential Permitted uses and definitions Local precedents LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION Engaging Municipalities Initial contact Site location and nature of interest in property Confidentiality Meeting with key representatives Present details and benefits of proposal Initial feedback / reaction Obtain information Establish next steps and follow-up Gauge level of support LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SITE SELECTION Engaging Municipalities Formal correspondence Notification to fire, police services Planning and legal opinions Determine zoning compliance Identify approval requirements Municipal Approvals Site Plan Building Permit Other LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

MUNICIPAL PERSPECTIVES Industrial or Agricultural? Growing vs. producing vs. manufacturing Agricultural commodity vs. controlled substance No outdoor growing or processing permitted Range of zoning approaches LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

PUBLIC PERSPECTIVES Key Issues Security Compatibility – odour, traffic, noise Signage/advertising (Mis)Perceptions – crime, addiction, etc. Political environment LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #1. PROPOSED 20,000 SQ. FT. MMPF Review of commercial, industrial and agricultural/rural real estate listings in the areas of Wellington, Dufferin and Perth Counties Short list of 4 potential sites identified based on: Review of zoning permissions and definitions Separation from sensitive land uses Ease of addressing security and site servicing Client needs and price considerations Preference to retrofit an existing building requiring minimal improvements LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #1. PROPOSED 20,000 SQ. FT. MMPF Location #1: Zoning: “Agricultural (A) Zone” Permitted under current zoning, no amendment required Subject to Site Plan control Private servicing Municipality receptive to proposal Did not proceed (property sold) Locations #2, #3: Re-zoning required, municipality had significant concerns with the use Did not proceed due to required approvals and lack of municipal support LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #1. PROPOSED 20,000 SQ. FT. MMPF Location #4: Zoning: “Light Industrial (M1) Zone” Urban location, existing vacant industrial building Permitted under current zoning, no amendment required Initial concerns with “growing” under industrial zone, deemed to be included as part of “Research and Laboratory Facilities” definition Subject to Site Plan control Municipal servicing Municipality receptive to proposal Client proceeded with Location #4 Acquired land with zoning certificate from municipality Federal licensing in process LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #1. PROPOSED 20,000 SQ. FT. MMPF Health Canada concerns regarding proximity to residential Paragraph 26(1)(h) of MMPR Risk to public health, safety or security Risk of cannabis being diverted to an illicit market or use “Close proximity to residential homes” – 100m? LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #2. PROPOSED MULTI-TENANT 400,000 sq. ft. MMPF Site/Location Details Existing industrial building Rural location Official Plan: Rural, recognizes existing industrial use Zoning: “Industrial (M1) Zone” Good separation from sensitive uses (approx. 200m to nearest dwelling) LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #2. PROPOSED MULTI-TENANT 400,000 sq. ft. MMPF Site Investigation Site and building tours with planning and engineering team (civil, mechanical, electrical, architectural) Detailed review of building history, condition and permits/approvals Environmental Site Assessment / Record of Site Condition Building Condition Audit and Capital Cost Estimates Review of on-site servicing systems, electrical, mechanical, HVAC, etc. Detailed review of Official Plan policies and zoning applicable to the site Independent planning and legal opinions LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #2. PROPOSED MULTI-TENANT 400,000 sq. ft. MMPF Proposal Divide the building internally into 10-20 industrial units Rent (or sell as condo units) to individual operators/tenants Flexible space to allow different sizes and configurations “Turn-key” – satisfy site and building/security requirements for licensing Reserve approx. 50,000-75,000 sq. ft. for existing “non-MMPF” industries within the same building Minimal external site works required (security fencing) Phased development/retrofit of existing building LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CASE STUDIES #2. PROPOSED MULTI-TENANT 400,000 sq. ft. MMPF Component of MMPF Existing Buildings/Facilities Zoning By-law Permissions Administrative office space Existing office space Permits offices Facilities for producing/ making, processing, drying, inspecting, adapting for sale of medical marihuana Existing spaces/facilities for production, drying, inspecting, grading, adapting products for sale Permits processing facilities, producing/making and inspecting, grading and adapting for sale of goods and substances Packing/storing/ warehousing/distribution of medical marihuana Existing spaces/facilities for packing, storing, warehousing and shipping/ distribution Permits warehousing which includes packaging, storage and distribution of goods and substances Laboratory facilities for medical marihuana research and inspection Space can be renovated for laboratory Permits research and laboratory facilities LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

SUMMARY New federal rules establish licensing requirements to regulate production facilities Wide range of MMPF’s by type, scale, production methods, servicing requirements and other variables Industrial locations attractive for many operations; some MMPF’s in rural settings Variety of municipal perspectives, zoning approaches and techniques, public perceptions LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014

CONTACT Steve Wever, MCIP, RPP Senior Planner GSP Group Inc. swever@gspgroup.ca 519-569-8883 LICENSED MEDICAL MARIHUANA PRODUCTION FACILITIES September 30, 2014