Cannabis Cultivation and Processing Facility Due Diligence in Alberta

1. Define site, entity and transaction perimeter

Identify the licensee, buyer, seller, property owner, legal parcels, licensed site boundary, buildings, rooms, activities, licence classes, shares or assets, equipment, inventory, intellectual property, contracts and leasehold rights.

Keep the real-property transaction, corporate transaction and federal licensing path separately controlled.

• Licensee
• Licensed site
• Property
• Licence classes
• Operating assets
• Transaction structure

2. Reconstruct the Health Canada record

Index the licence, classes, conditions, site plans, security plan, good production practices evidence, key personnel, security clearances, submissions, inspections, notices, corrective work and correspondence. Record source, date and scope.

Health Canada says a site-location change requires a new licence and that, in most cases, licences aren't transferable—even for mergers and acquisitions. Ownership changes are assessed case by case and may require revocation and a new application.

3. Match the proposed operation to the site

Define cultivation, processing, packaging, storage, testing, research or medical-sales activities and the intended scale. Compare the proposed material, personnel, waste and secure-access flows with the approved and as-built records.

A former licence, historic cultivation or existing site plan is not approval for a new operator, class, activity, layout or production volume.

4. Verify security and GPP infrastructure

Have qualified advisors assess site perimeter, access control, intrusion detection, surveillance, secure storage, records, sanitation, air handling, filtration, temperature, humidity, pest, contamination and recall-supporting systems against the proposed operation.

Do not market a building as Health Canada approved, compliant, licensed or a turnkey grow unless an exact, current source supports that exact and limited statement.

5. Prove utilities and process capacity

Reconcile electrical service and interval demand, generators, natural gas, HVAC, dehumidification, cooling, water source and quality, irrigation, drainage, wastewater, odour control, compressed gases and communications. Identify redundancy and single points of failure.

Nameplates, service sizes, old bills and seller estimates do not prove available utility capacity or suitability for another production plan.

6. Investigate building and environmental condition

Review title, use, permits, occupancy, fire, plans, structure, envelope, roof, controlled rooms, mould and pest history, water intrusion, fertilizers, chemicals, tanks, waste, spills, emissions, neighbouring uses and decommissioning. Define building and environmental scopes with reliance rights.

Past regulator activity is not a building-condition or environmental opinion. Use qualified professionals for those conclusions.

7. Translate evidence into capital and value

Separate land and building value, specialized improvements, movable equipment, inventory and business value. Model recommissioning, remediation, code work, security, HVAC, utilities, operating delay, carrying cost and alternative-use conversion.

Replacement cost and seller investment do not establish market value or economic usefulness to a buyer. Specialized improvements may create either value or removal cost.

8. Condition closing on continuity evidence

Tie title, financing, Health Canada path, municipal evidence, professional reports, system tests, contracts, inventory, insurance, utilities, possession and transition to named evidence, responsibility and deadlines. Maintain a no-operation and alternative-use fallback.

Commercially coordinates licensed commercial-property and business-real-estate brokerage. It does not issue or transfer licences, approve applicants, certify security or good production practices, determine municipal compliance, inspect systems, audit earnings or provide legal, tax, accounting, environmental, engineering, building, fire, security or cannabis-regulatory advice.