Industry
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FOR IMMEDIATE RELEASE
December 23, 2025
Merit Method Breaks New Ground with Canada’s First Cannabis “Contract Manufacturing” Licence, Empowering Underdog Brands Across Canada.
Vancouver, Canada – Merit Method, a leading global consulting firm in the regulatory cannabis sector and EU-GMP and GACP certification, proudly announces a groundbreaking achievement, securing for its client what is believed to be the first-ever “contract manufacturing” processing licence issued by Health Canada under the Cannabis Act.
Merit Method calls it a “contract manufacturing” processing licence because the licenced site consists solely of one room, with the only on-site activities taking place being the storage of excise stamps, representative samples for laboratory testing, and fully packaged intra-industry samples. The licence holder contracts all production, packaging, and stamping to a different processor.
This presents a tremendous opportunity to cannabis brand owners who traditionally have not had their own Health Canada licence and have had to rely on contracting with licenced processors. Brand owners know that this brings myriad risks, including the risk that processors with whom they contract hold legal title to both their products and provincial wholesaler SKUs. Further, relying on a manufacturer without having their own licence means brand owners must wait to be paid by the manufacturer and cannot receive payment directly from provincial wholesalers. This is particularly problematic in light of the high insolvency rates in the Canadian cannabis industry.
But cannabis brand owners now have the peace of mind knowing a “contract manufacturing” processing licence has been previously approved by Health Canada, allowing them to legally own the cannabis input, the resulting cannabis product, and its SKUs with provincial wholesalers, while still contracting with other manufacturers to produce and package their cannabis products on a service fee basis.
Because the licenced site of the “contract manufacturing” licence holder consists solely of a small room, with no processing or packaging occurring on-site, startup and operational costs are significantly lower than for processing licences where processing and/or packaging take place on-site.
During the application process, Health Canada officials confirmed to Merit Method that they had never encountered this type of application before, indicating it is an industry first.
This groundbreaking licensing approach revolutionizes the way brand owners operate, giving them complete control over their finances, excise tax stamps, and direct revenue streams.
“We want brand owners to feel the freedom of controlling their own destiny,” says May Khatib, Founder of Merit Method. “This is truly a game-changer for anyone who wants to grow their brand with confidence and direct oversight.”
Now, under this licence, brand owners can invest confidently in their marketing and sales efforts, knowing they are the party directly receiving payments from provincial wholesalers and managing their own regulatory obligations. While robust quality and contract manufacturing agreements with contract processors and co-packers remain necessary, and “contract manufacturing” licence holders must obtain CRA excise licence and their own supply of excise stamps, Merit Method ensures these steps are seamless and entirely achievable.
Harrison Jordan, Founder and Managing Lawyer of Substance Law (substancelaw.ca) , says that “this model of licensing would alleviate so many of the issues third-party brand owners face.” While neither Jordan nor his firm was involved in obtaining this licence, he says it is a “no-brainer” for brand owners that “wish to be asset-light while retaining as much legal control as possible.”
Merit Method’s client, which, upon application submission, received its initial processing licence in approximately 4 months and its cannabis 2.0 sales amendment following an additional approximate 4 months, wishes to remain confidential at this time.
While this is a longer processing time than Merit Method typically encounters, it likely reflects the novel nature of the application, and processing times may shorten as more parties apply to Health Canada under this model.
-30-
For more information, please contact May Khatib at may@meritmethod.com or visit meritmethod.com.
December 23, 2025
Merit Method Breaks New Ground with Canada’s First Cannabis “Contract Manufacturing” Licence, Empowering Underdog Brands Across Canada.
Vancouver, Canada – Merit Method, a leading global consulting firm in the regulatory cannabis sector and EU-GMP and GACP certification, proudly announces a groundbreaking achievement, securing for its client what is believed to be the first-ever “contract manufacturing” processing licence issued by Health Canada under the Cannabis Act.
Merit Method calls it a “contract manufacturing” processing licence because the licenced site consists solely of one room, with the only on-site activities taking place being the storage of excise stamps, representative samples for laboratory testing, and fully packaged intra-industry samples. The licence holder contracts all production, packaging, and stamping to a different processor.
This presents a tremendous opportunity to cannabis brand owners who traditionally have not had their own Health Canada licence and have had to rely on contracting with licenced processors. Brand owners know that this brings myriad risks, including the risk that processors with whom they contract hold legal title to both their products and provincial wholesaler SKUs. Further, relying on a manufacturer without having their own licence means brand owners must wait to be paid by the manufacturer and cannot receive payment directly from provincial wholesalers. This is particularly problematic in light of the high insolvency rates in the Canadian cannabis industry.
But cannabis brand owners now have the peace of mind knowing a “contract manufacturing” processing licence has been previously approved by Health Canada, allowing them to legally own the cannabis input, the resulting cannabis product, and its SKUs with provincial wholesalers, while still contracting with other manufacturers to produce and package their cannabis products on a service fee basis.
Because the licenced site of the “contract manufacturing” licence holder consists solely of a small room, with no processing or packaging occurring on-site, startup and operational costs are significantly lower than for processing licences where processing and/or packaging take place on-site.
During the application process, Health Canada officials confirmed to Merit Method that they had never encountered this type of application before, indicating it is an industry first.
This groundbreaking licensing approach revolutionizes the way brand owners operate, giving them complete control over their finances, excise tax stamps, and direct revenue streams.
“We want brand owners to feel the freedom of controlling their own destiny,” says May Khatib, Founder of Merit Method. “This is truly a game-changer for anyone who wants to grow their brand with confidence and direct oversight.”
Now, under this licence, brand owners can invest confidently in their marketing and sales efforts, knowing they are the party directly receiving payments from provincial wholesalers and managing their own regulatory obligations. While robust quality and contract manufacturing agreements with contract processors and co-packers remain necessary, and “contract manufacturing” licence holders must obtain CRA excise licence and their own supply of excise stamps, Merit Method ensures these steps are seamless and entirely achievable.
Harrison Jordan, Founder and Managing Lawyer of Substance Law (substancelaw.ca) , says that “this model of licensing would alleviate so many of the issues third-party brand owners face.” While neither Jordan nor his firm was involved in obtaining this licence, he says it is a “no-brainer” for brand owners that “wish to be asset-light while retaining as much legal control as possible.”
Merit Method’s client, which, upon application submission, received its initial processing licence in approximately 4 months and its cannabis 2.0 sales amendment following an additional approximate 4 months, wishes to remain confidential at this time.
While this is a longer processing time than Merit Method typically encounters, it likely reflects the novel nature of the application, and processing times may shorten as more parties apply to Health Canada under this model.
-30-
For more information, please contact May Khatib at may@meritmethod.com or visit meritmethod.com.
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