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Applicants seeking to obtain a Health Canada licence to cultivate and process cannabis and those seeking to sell cannabis in the medical market, will now have to show that they have a fully built cultivation site ready to go before they even begin the application process, Health Canada announced Wednesday.

It is a sweeping change from the present system, where applicants looking to become licensed cannabis producers had to merely secure a site before starting the application process. In many cases, a pre-approval letter from Health Canada stating that an application was in the queue would enable an applicant to begin raising funds from investors in the sector to fully build out a site.

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“You did not even need a shovel in the ground to begin the application process, which can sometimes take years. Now you have to raise tens of millions and convince investors that you will get a Health Canada licence, when you have no physical proof of it,” said Trina Fraser, Partner at Brazeau Seller Law who advises cannabis companies on the licensing process.