Covid-19: Pandemic Programs and Financial Relief Measures for Cannabis Companies in Canada


Covid-19: Pandemic Programs and Financial Relief Measures for Cannabis Companies in Canada

Franck Marvel Ngandui [1] and Jason Moscovici [2]
Lawyers, Patent and Trademark Agents

Following the announcement of the various Federal Government programs and financial relief measures in response to the Covid-19 pandemic at the end of the month of March, industry stakeholders felt that the cannabis sector had been left out of the economic stimulus package[3]. The fact that the cannabis industry was identified by most provinces as providing an essential service, and could therefore continue to operate, was cold comfort when compared to the investment in time and money required in order to maintain operations going into the crisis.

Several growing cannabis firms were still struggling with establishing solid relationships with traditional lenders and there was word amongst industry stakeholders at the time that the new small and medium sized business loans made available through financial institutions would not be available to the cannabis sector. The Federal Government has yet to specifically address industry stakeholders’ concerns; however, as we are now almost halfway through some of these initiatives, it is a good time to go over many of the programs that do indeed apply to the industry, whether they be license holders or provider of ancillary products and services. As a number of provinces are poised to ease COVID-19 restrictions in the coming weeks, here is an overview of some resources that remain available to cannabis businesses. Further details regarding the continuation of each program and measure will most likely be released in the coming weeks. In the meantime, here are the basics:


The new Canada Emergency Wage Subsidy was announced by the Federal Government on March 27, 2020. This relief measure consists of a 75-per-cent wage subsidy to eligible employers for up to 12 weeks, retroactive to March 15, 2020 to June 6. The Federal government has recently announced that the qualifying period for CEWS will now be extended until August 29, 2020. The CEWS’ fine print includes the following:

  • The subsidy amount for a given employee on eligible remuneration paid in respect of the period between March 15 and June 6, 2020 would be the greater of:
    • 75 per cent of the amount of remuneration paid, up to a maximum benefit of $847 per week; and
    • The amount of remuneration paid, up to a maximum benefit of $847 per week or 75 per cent of the employee’s pre-crisis weekly remuneration, whichever is less.
  • The pre-crisis remuneration for a given employee would be based on the average weekly remuneration paid between January 1 and March 15 inclusively, excluding any seven-day periods in respect of which the employee did not receive remuneration;
  • Employers will also be eligible for a subsidy of up to 75 per cent of salaries and wages paid to new employees;
  • There would be no overall limit on the subsidy amount that an eligible employer may claim;
  • Employers are expected to make their best effort to top-up employees’ salaries to bring them to pre-crisis levels;
  • The subsidy will be reduced by any amounts received under the temporary 10% wage subsidy; and
  • Employers will receive a 100% refund for EI and CPP/QPP contributions for furloughed employees.


  • Eligible employers would include individuals, taxable corporations, non‑profit organizations and registered charities.
  • This subsidy would be available to eligible employers that see a drop of at least 15 % of their revenue in March 2020 and 30% for the month of April and May 2020. An employer’s revenue for this purpose would be its revenue in Canada earned from arm’s-length sources. Revenue would be calculated using the employer’s normal accounting method and would exclude revenues from extraordinary items and amounts on account of capital.
  • Eligibility for the CEWS of an employee’s remuneration will be available to employees other than those who have been without remuneration in respect of 14 or more consecutive days in the eligibility period.
  • The Canada Revenue Agency has launched an online tool that helps business owners calculate the amount they’ll be eligible for and preview their subsidy claims.

How to Apply

Applications for the CEWS has been opened since April 27 and employers can now apply for the wage benefit through the Canada Revenue Agency’s My Business Account portal.

For more information, see the Government of Canada website.


Employers whether they qualify for the CEWS or not, may also qualify for the temporary wage subsidy for employers that was announced prior to the CEWS. This subsidy amounts to 10% of wages paid from March 18 to June 19, 2020, up to a maximum of $1,375 per employee and $25,000 per employer.


Includes individuals, partnerships and corporations eligible for the small business deduction

How to Apply

No need to apply as employers reduce their payroll remittances of income tax by the amount of the subsidy they would be entitled to.

For more information, see the Government of Canada  website.


If your cannabis firm has been affected by the COVID-19 pandemic, the Federal Government work-sharing program might be an interesting approach to consider. This program helps employers and employees avoid layoffs when there’s a recession.

Essentially, the work-sharing program involves a three-party agreement among employers, employees and Service Canada pursuant to which in consideration for the employee agreeing to a reduced work schedule and to share the available work, the employee may partially collect employment insurance benefits.

In response to the COVID-19 pandemic, the Federal Government has, among other things, (i) extended the maximum duration of the work-sharing program from 38 weeks to 76 weeks, (ii) eliminated the mandatory waiting period for a new agreement , (iii) reduced the previous requirements for a recovery pan to a single line of text in the application form, (iv) reduced the requirement and expand eligibility to employers affected by accepting business who have been in business for only 1 year rather than 2, and eliminated the burden of having to provide sales/production figures at the same time.


Eligibility criteria include the following. Additional details can be found here.

  • To be eligible for a work sharing agreement, eligible employers must
    • Have been in business in Canada year-round for at least a year;
    • Be a private business, a publicly held company, or a not-for-profit organization;
      • A publicly held company is a for-profit company whereby its shares/stocks are owned by the general public. Public sector employers, including government or publicly-owned corporations, such as crown corporations, are not eligible for Work-Sharing.
      • For a not-for-profit employer to be eligible, the shortage of work must be directly associated with a reduction in the organization’s normal level of business activity. A reduction in revenue levels alone (for example, grants, donations, memberships, etc.) would not meet the Work-Sharing eligibility criteria. Business activity is defined as the selling of goods or services with an objective to earning profit.
    • Demonstrate that the shortage of work is temporary and beyond their control, and is not a cyclical/recurring slowdown;
    • Demonstrate a recent decrease in business activity of approximately 10%; and,
    • Submit and implement a recovery plan designed to return the Work-Sharing unit(s) to normal working hours by the end of the Work-Sharing agreement. There must be a reasonable expectation that recovery (that is, a return to normal work hours for all participating employees) will be achieved by the end of the agreement.
  • Eligible employees being proposed for a work-sharing agreement must:
    • Be “core employees” (that is, year-round permanent full-time or part-time employees who are required to carry out the everyday functions of normal business activity);
    • Be eligible to receive Employment Insurance benefits; and
    • Agree to a reduction of their normal working hours in order to share the available work.

How to Apply

Details regarding the application process can be found here.


In Quebec, the Ministère du Travail, de l’Emploi et de la Solidarité sociale in collaboration with the Commission des partenaires du marché du travail put in place the PACMEgrant to help businesses with their human resources management activities and the development of workers competence through training activities. Through the PACME, the Quebec government will reimburse 100% of eligible expenses of less than $100,000 and 50% of eligible expenses between $100,000 and $500,000. Applications will be accepted until the earlier of September 30, 2020, or until the $150,000,000 budgeted for the program will have been deployed. Many have already included ongoing employee training in the cannabis space as part of their protocols and continuing such activities during downtime could prove to be beneficial in order to improve productivity, specificity, innovation and adherence to quality standards.


  • Regular activities of the business must have been affected by the COVID-19 pandemic either through a suspension, a reduction, an increase or a diversification of the activities.
  • Eligible human resources management activities include the following:
    • Diagnosis of the human resources function;
    • Consultation Mandates; and
    • Coaching and management skills training.
  • Eligible training activities include the following:
    • Employee’s basic training;
    • Francization;
    • Digital skills training; and
    • Training related to the business’ adjustment strategy.
  • Eligible training expenses include the following:
    • Workers salary in training up to $25 per hour per employee;
    • Professional fees of consultants or trainers; and
    • Registration fees or other fees related to the use of a platform.

How to Apply

Businesses are invited to fill out the form available here.

For more information, see the Government of Quebec  website.


While this may be of interest for ancillary providers or satellite offices, License holders should also verify if the CECRA program could apply. CECRA provides forgivable loans to eligible commercial property owners to cover 50% of three monthly rent payments payable by eligible small business tenants experiencing financial hardship during April, May and June 2020. Once the three month period has ended, commercial property owner can still apply for the CECRA if they can demonstrate eligibility for that period. The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a pledge not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent. The CECRA will be administered by the Canada Mortgage and Housing Corporation (CMHC) and will be available in the coming weeks. The deadline to apply for the CECRA is August 31, 2020.


  • To Qualify or CECRA, commercial property owners must
    • Own property that generates rental revenue from commercial real property located in Canada;
    • Own commercial real property secured by a mortgage loan and occupied by one or multiple eligible small business tenants. (For those property owners who do not have a mortgage, an alternative mechanism will be implemented. CMHC will be outlining further information will be outlined in the near future.);
    • Have agreed to or agree to enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75% and will include a moratorium on eviction for the period of April, May and June 2020;
    • Have declared rental income on tax returns for tax years 2018 and/or 2019.
  • Eligible small business tenants include businesses, including non-profit and charitable organizations who:
    • Pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement);
    • Generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and
    • Have temporarily ceased operations (i.e. generating no revenues), or has experienced at least a 70% decline in pre-COVID-19 revenues.

How to apply

Businesses are invited to apply on the CMHC’s website.


The Government of Canada introduced the Business Credit Availability Program (BCAP) to help Canadian businesses obtain financing during the current period of significant uncertainty. The BCAP will be administered by Export Development Canada (EDC) and the Business Development Bank of Canada (BDC), with loans co-ordinated through banks or other financial institutions. The BCAP includes the following programs:

EDC Loan Guarantee for Small and Medium Enterprises

Under this program, Export Development Canada (EDC) will provide funding to financial institutions so that they can issue new operating credit and cash flow term loans. Details include the following,

  • Will allow financial institutions to issue operating credit and cash flow term loans of up to $6.25 million to their existing clients;
  • These loans will be 80 per cent guaranteed by EDC, to be repaid within one year;
  • This money is to be used for operational expenses, not for dividend payouts, shareholder loans, bonuses, stock buyback, option issuance, increases to executive compensation or repayment/refinancing of other debt;
  • Available until September 30, 2020.


  • All legal businesses that have been impacted directly or indirectly by recent events and that have been financially viable prior to the impact from COVID-19;
  • Activities fall within EDC’s mandate;
  • Financial institutions may have additional eligibility requirements.

How to Apply

To access these loans, small and medium sized businesses are encouraged to contact their primary financial institution which will assess their situation and deploy the financing as appropriate. Financial institutions have been progressively rolling out the program to businesses. 

For additional details, see the EDC’s website.

BDC Co-Lending Program for Small and Medium Enterprises

This program provides term loans for operational and liquidity needs of businesses, which could include interest payments on existing debt. When BDC initially announced details regarding this program, they indicated that cannabis companies would not qualify for the program. After receiving feedback from industry stakeholders, the BDC revised the program’s eligibility criteria to include cannabis businesses. Details of the program now include the following:

  • The program is designed in three segments to target support to different business sizes.
    • Loans of up to $312,500 to businesses with revenues of less than $1 million;
    • Up to $3.125 million for businesses with revenues between $1 million and $50 million;
    • Up to $6.25 million for businesses with revenues in excess of $50 million.
  • This money is to be used for operational cash flow requirements;
  • The money will be loaned at commercial interest rate; and
  • Loans would be interest-only for the first 12 months, with a 10-year repayment period;
  • Available until September 30, 2020.


  • All legal businesses that have been impacted directly or indirectly by recent events and that have been financially viable prior to the impact from COVID-19;
  • Financial institutions may have additional eligibility requirements.

How to Apply

Since April 24, 2020, eligible businesses can apply for this program with their financial institutions.

For additional details, see the BDC’s website.

The Canada Emergency Business Account (CEBA)

Under the CEBA, a program 100 percent funded by the Government of Canada, financial institutions will be able to provide eligible employers with interest-free credit facilities. Details include the following:

  • Loan of up to $40,000;
  • No interest until December 31, 2022;
  • Loan forgiveness of 25% (up to $10,000) if repaid on or before December 31, 2022; and
  • If the loan is not repaid by December 31, 2022, the remaining balance will be converted to a three-year term loan at 5 per cent interest.


Employers with $20,000 to $1,500,000 in total payrolls in 2019 and operating as of March 1, 2020.

How to Apply

Since April 9, 2020, eligible businesses can apply for this program with their financial institutions.

For additional details, see the Government of Canada’s website.


The FCC specifically indicated that cannabis cultivators could be eligible to access its standard lending products. Additionally, in connection with the Covid-19 pandemic the FCC put in place the following lending products to assist with producers, agribusinesses and food processors’ cash flow needs:

  • A deferral of principal and interest payments up to six months for existing loans; or
  • A deferral of principal payments up to 12 months;
  • Access to an additional credit line up to $500,000, secured by general security agreements or universal movable hypothec (Québec only) (It is a 24-month credit line up to $500,000 at a rate of Prime +1% and no fees; 
  • Term loans up to $2.5M, with no fees and an 18-month interest-only option available over a 10-year amortization. These funds can be used for working capital and to modify production due to the impacts of COVID-19.


FCC customers and non-customers are eligible to apply for FCC lending products.  FCC has indicated that each application will be assessed on a case-by-case basis. Businesses applying for FCC lending products are subject to normal lending due diligence, which considers business viability, credit history, and management integrity and experience. 

How to Apply

If you’d like more information on these options, the FCC invites businesses to contact their local FCC office or the Customer Service Centre at 1-888-332-3301.

For additional details, see the FCC’s website.


On April 22, the National Research Council of Canada (NRC) announced the COVID-19 innovation assistance program (IAP) for small and medium-sized businesses unable to secure funding under the CEWS and the BCAP programs. The IAP essentially consist in a wage subsidy for up to 12 weeks to eligible Canadian businesses. The call for application closed on April 29, 2020, however we suggest keeping an eye out for further initiatives both federally and provincially, that encourage innovation in the cannabis space.


To qualify, Canadian businesses must

  • Be an incorporated, profit-oriented small or medium-sized business in Canada;
  • Be a company with 500 or fewer full-time equivalent employees;
  • Plan to pursue growth and profit by developing and commercializing innovative, technology-driven new or improved products, services or processes in Canada;
  • Lack sufficient financial resources to sustain operations between April 1 and June 23;
  • Have a Canada Revenue Agency business number;
  • Be incorporated by no later than March 1, 2020;
  • Be unable to qualify for the Canada Emergency Wage Subsidy.


The above list is a review, general overview and a starting point. It goes without saying that each program brings along with it the complexities of trying to fit the eligibility criteria to your specific business realities. We are hoping that as the situation evolves, further clarity as to specific help to the cannabis industry will start to emerge. In waiting, should further insight or information be required, or should you require guidance regarding the evolution and preservation of your cannabis business under the present context, please feel free to contact any member of ROBIC’s cannabis group.

© CIPS, 2020.

[1] Franck Marvel Ngandui is a Lawyer for ROBIC, LLP, a firm of Lawyers, Patent and Trademark Agents.
[2] Jason Moscovici is a Lawyer for ROBIC, LLP, a firm of Lawyers, Patent and Trademark Agents.
[3] Most notably, the Ontario Cannabis Policy Council urged the Federal Government (OCPC) to consider the following
– “Equal and fair access to significant supports for all cannabis companies working to keep employees employed, including access to wage subsidies as announced on March 18, 2020 by the Prime Minister and Finance Minister.
– Equal and fair access to funding as other industries have for credit instrument through federal agencies, specifically Export Development Canada (EDC) and Business Development Bank of Canada (BDC). Presently, BDC has indicated that the regulated cannabis sector cannot access the $10B in stimulus funding, part of which is available through that crown corporation.” N. B. At the time of issuance of the OCPC’s press release, the stimulus funding had not been extended to cannabis companies. It is now no longer the case.