Update: Progress on First Micro License

We hurdled the 14month security review stage as the responsible person in charge (Calum Hughes) already has a 5 year CPIC security clearance letter. In light of this, Health Canada has given us until Dec 27th to reply to the list of questions needed to proceed further with the license approval. The Advanced Team is working through this as we speak and will make the Dec 27th deadline. Another three applications tied to the same property will be submitted this month.

We hope to have 4 active licenses granted in Q1 of 2019.

We have the land mass to apply for a total of 32 licenses at the property that we will lease. These two one-acre parcels have a bylaw restriction of 60% building coverage and 14 meter height restriction. Our design and plans fit within these requirements. In order to get 32 micros approved on these two lots, we will need to stratify the 32 legal addresses. We met with the City of Kelowna and learned that this is possible if we stay within the city bylaw requirements.

The development proposal to the City is already accepted so all we will need is a building permit. We are on the end stage of negotiations with the manufacturer of the micro cultivation pods under a debt financing situation and anticipate having the pods ordered in January. More about this in our January investor update – if we can close this agreement.

Once an application is submitted in the CTLS, there are a series of steps Health Canada undertakes to review and issue the licence as outlined below. It is important to note that in accordance with 62(5) of the Cannabis Act, the Minister may request the submission of any additional information that pertains to the information contained in the application and that is necessary for the Minister to consider the application. This would be in the form of a request for more information as outlined in section 7.3.1 of this guide.

7.2.1 APPLICATION SCREENING

• During screening, the application and attached documents are assessed for completeness, legibility and ability to be further assessed.

7.2.2 REVIEW AND SECURITY CLEARANCE

• Once an application has passed the screening stage, and security clearance applications are being processed, the application will undergo a detailed review to verify that the requirements are met.  Health Canada will work with the RCMP on security clearance applications.

7.2.3 PRE-LICENSING AND APPROVAL PROCESS

Once Health Canada completes the detailed review of the submitted application, Health Canada provides the applicant with a confirmation of readiness email. This email will prompt the applicant for information to demonstrate that there is a functioning facility/building at the site address. The applicant will be required to provide a site evidence package with documentation including, but not limited to, detailed video walk throughs of both the interior and exterior of the site, and site and building plans including descriptions and photographs that clearly detail facility completion.

Following the review of this information, an on-site pre-licence inspection by Health Canada inspectors may be deemed necessary prior to further licensing decisions. If an inspection is required, the inspection team will contact the applicant to schedule the pre-licence inspection. In the case where an on-site pre-licence inspection is not required, the licence issuance will be based on the thoroughness of information found in the site evidence package.