Guidance for licensed dealers on conducting activities with controlled substances (CS-GD-016): Guidance

On this page

• Inspections
• Dealer’s licence
• Designated personnel
• Security measures
• Loss and theft detection and reporting
• Record keeping
• Monthly activities report
• Suspicious transactions
• Importation and exportation
• Transportation
• Sales
• Orders
• Destruction
• Advertising

Inspections

Table 1: Sections under the Controlled Drugs and Substances Act associated with the administration and compliance verification

Context	Section or subsection
Powers of an inspector	31(1) Subject to subsection (2), an inspector may, for a purpose related to verifying compliance or preventing non-compliance with the provisions of this Act or the Regulations, enter any place, including a conveyance, referred to in subsection (1.1) and may for that purpose (a) open and examine any receptacle or package found in that place in which a controlled substance, precursor or designated device may be found; (b) examine any thing found in that place that is used or may be capable of being used for the production, preservation, packaging or storage of a controlled substance or a precursor; (c) examine any labels or advertising material or records, books, electronic data or other documents found in that place with respect to any controlled substance, precursor, or designated device other than the records of the medical condition of persons, and make copies thereof or take extracts therefrom; (d) use or cause to be used any computer system at that place to examine any electronic data referred to in paragraph (c); (e) reproduce any document from any electronic data referred to in paragraph (c) or cause it to be reproduced, in the form of a printout or other output; (f) take the labels or advertising material or records, books or other documents referred to in paragraph (c) or the printout or other output referred to in paragraph (e) for examination or copying; (g) use or cause to be used any copying equipment at that place to make copies of any document; (g.1) take photographs and make recordings and sketches; (h) examine any substance found in that place and take, for the purpose of analysis, such samples thereof as are reasonably required; (i) seize and detain, in accordance with this Part, any controlled substance, precursor, designated device or conveyance found in that place the seizure and detention of which the inspector believes on reasonable grounds are necessary; (j) order the owner or person having possession, care or control of any controlled substance, precursor, designated device or other thing to which the provisions of this Act or the Regulations apply that is found in that place to move it or, for any time that may be necessary, not to move it or to restrict its movement; (k) order the owner or person having possession, care or control of any conveyance that is found in that place and that the inspector believes on reasonable grounds contains a controlled substance, precursor or designated device to stop the conveyance, to move it or, for any time that may be necessary, not to move it or to restrict its movement; (l) order any person in that place to establish their identity to the inspector’s satisfaction; and (m) order a person who, at that place, conducts an activity to which the provisions of this Act or the Regulations apply to stop or start the Activity.
Place	31(1.1) For the purposes of subsection (1), the inspector may only enter a place in which they believe on reasonable grounds (a) a controlled substance, precursor, designated device or document relating to the administration of this Act or the Regulations is located; (b) an activity could be conducted under a licence, permit, authorization or exemption that is under consideration by the Minister; (c) an activity to which the provisions of this Act or the Regulations apply is being conducted; or (d) an activity was being conducted under a licence, permit, authorization or exemption before the expiry or revocation of the licence, permit, authorization or exemption, in which case the inspector may enter the place only within 45 days after the day on which it expired or was revoked.
Means of telecommunication	31(1.2) For the purposes of subsections (1) and (1.1), an inspector is considered to have entered a place when they access it remotely by a means of telecommunication.
Limitation — access by means of telecommunication	31(1.3) An inspector who enters remotely, by a means of telecommunication, a place that is not accessible to the public must do so with the knowledge of the owner or person in charge of the place and only for the period necessary for any purpose referred to in subsection (1).
Person accompanying inspector	31(1.4) An inspector may be accompanied by any other person that the inspector believes is necessary to help them exercise their powers or perform their duties or functions under this section.
Entering private property	31(1.5) An inspector and any person accompanying them may enter and pass through private property, other than a dwelling-house on that property, in order to gain entry to a place referred to in subsection (1.1).
Warrant to enter dwelling-house	31(2) In the case of a dwelling-house, an inspector may enter it only with the consent of an occupant or under the authority of a warrant issued under subsection (3).
Assistance to inspector	31(5) The owner or other person in charge of a place entered by an inspector and every person found there shall give the inspector all reasonable assistance in that person’s power and provide the inspector with any information that the inspector may reasonably require.
Obstructing inspector	32(1) No person shall, by act or omission, obstruct an inspector who is engaged in the exercise of their powers or the performance of their duties or functions under this Act or the Regulations.
False statements	32(2) No person shall knowingly make any false or misleading statement verbally or in writing to an inspector who is engaged in the exercise of their powers or the performance of their duties or functions under this Act or the Regulations.

Explanation

As a licensed dealer, you may be inspected by Health Canada.

A Guide to Health Canada Inspections covers what to expect during an inspection, as well as your rights and responsibilities related to inspections. Health Canada can conduct inspections that are:

• announced or unannounced
• conducted remotely, in person, or using a hybrid approach

Health Canada inspectors are designated by the Minister and are authorized to conduct inspections to monitor and verify compliance with the Controlled Drugs and Substances Act (the act) and the Controlled Substances Regulations.

Subsection 31(1) of the act lists the powers of a Health Canada inspector to inspect a place that conducts activities with controlled substances.

You can consult Health Canada’s policy document on inspection strategy for licensed dealers of controlled substances and Class A precursors (CS-POL-002) for additional information on the controlled substances inspection program.

If you are not meeting your regulatory requirements, during an inspection, inspectors may note observations and assign them a rating based on the risk of diversion. To better understand how ratings are assigned, see the Guidance on the risk classification guide for inspections of licensed dealers of controlled substances (CS-GD-017).

How to comply

You must give an inspector:

• all reasonable assistance
• any information they may require

You must not make false or misleading statements to an inspector (verbal or written). You must allow the inspector to check your inventory.

For information on how your information is managed, see the Access to information and Privacy web page.

Dealer’s licence

Possession and regulated activities

Table 2: Regulations associated with possession and conducting regulated activities with controlled substances

Context	Section or subsection
Authorized persons	5(1) A person referred to in subsection (2) is authorized to possess any of the following controlled substances if the person has obtained the substance in accordance with these Regulations, in the course of acts conducted in connection with the administration or enforcement of an Act or regulation or from a person exempted under subsection 56(1) of the Act from the application of subsection 5(1) of the Act with respect to that controlled substance: (a) a narcotic (b) a controlled drug set out in Part 1 of Schedule 2; (c) a targeted substance set out in Part 1 of Schedule 3.
Conditions	5(2) An authorized person is (a) a person that conducts an activity, with respect to the controlled substance, that is necessary for their business or the practice of their profession and that is (i) a licensed dealer
Export	5(4) A licensed dealer, the Minister, a government laboratory or an individual referred to in section 226 may possess a controlled substance, other than a restricted drug, for the purpose of exporting it if the substance was obtained in accordance with these Regulations.
Restricted Drugs
Authorized persons	6(1) The following persons are authorized to possess any restricted drug listed in Part 1 of Schedule 4 if that person has obtained the drug in accordance with these Regulations or in the course of acts conducted in connection with the administration or enforcement of an Act or regulation: (a) a licensed dealer
Export	6(3) A licensed dealer, the Minister or a government laboratory may possess a restricted drug for the purpose of exporting it if the drug was obtained in accordance with these Regulations.
Authorized activities	50 A licensed dealer may conduct the following activities if it does so in accordance with their dealer’s licence and any permit issued under these Regulations: (a) produce a controlled substance; (b) sell or provide a controlled substance to (i) another licensed dealer, (ii) with the exception of a restricted drug, a pharmacist, other than one who is practising in a hospital, (iii) a practitioner, (iv) with the exception of a restricted drug, a hospital, (v) a person exempted under subsection 56(1) of the Act with respect to that controlled substance, if there are terms and conditions for the sale or provision by a licensed dealer that are specified in the exemption, (vi) the Minister, or (vii) a government laboratory; (c) transport, send or deliver a controlled substance; or (d) import or export a controlled substance.
Packaging — conditions	51 A licensed dealer that packages a controlled substance may only do so in accordance with their dealer’s licence issued under these Regulations.
Destruction	52 A licensed dealer specialized in destruction that destroys a controlled substance may only do so in accordance with their dealer’s licence issued under these Regulations.
Signature and attestation	11(3) The application must (a) be signed and dated by the proposed senior person in charge; and (b) include an attestation by that person that (i) all of the information and documents submitted in support of the application are correct and complete to the best of their knowledge, and (ii) they have the authority to bind the applicant.
Licence integrity	12(2) A person must not alter or deface in any manner a dealer’s licence.
Registration number integrity	230(2) A person must not alter or deface in any manner the document that sets out the registration number.

Explanation

Only regulated parties are allowed to conduct certain activities with controlled substances. This allows controlled substances to be managed properly, with strict security measures in place to minimize the risk of diversion to illegal markets. If you need to possess or conduct activities with controlled substances, it is important to understand when you need a dealer’s licence.

You can email the Controlled Drugs Section for questions about regulated activities.

Email: cds-sdc@hc-sc.gc.ca

How to comply

You are responsible for knowing the details in your licence application.

You must be knowledgeable about the activities and controlled substances listed on your licence. This means that you must know the requirements of the Controlled Drugs and Substances Act and the Controlled Substances Regulations (the regulations) as they relate to the activities which you are authorized to conduct with the substances listed on your licence.

You must know the current status (controlled or not controlled) of the substances you are handling. It is recommended that you check the status of a substance at the time that you apply for a licence and before you conduct activities with additional substances. For questions regarding the status of a substance, please email the Status team.

Email: status-demandedestatut@hc-sc.gc.ca

Only conduct the activities listed on your licence or as authorized by Health Canada. These activities can include:

• possession
• production
• packaging
• selling or providing
• sending, transporting and delivering
• importing
• exporting
• destroying

You must conduct the listed activities only at the specific address listed on your licence (the licensed site).

Only conduct activities with the controlled substances specified on your licence. If a controlled substance is not listed on your licence, you are not permitted to conduct any activities with it.

• Activities listed on the licence do not apply to all controlled substances on the licence, unless requested. For example, production of raw controlled material only applies to the substances on the licence that have a production amount listed.

Your licence must be kept up to date, including the activities and controlled substances. The Controlled Drugs Section needs to approve any additional controlled substances or any additional activities.

• The application to submit an amendment can be found on the Controlled Substances web page.

You must conduct activities according to the terms and conditions of your licence, if applicable.

You may only possess a controlled substance if required for your business, obtained under the regulations, or authorized as an agent or mandatary of a person authorized under the regulations to do so, and if the substance is listed on your licence.

You cannot alter a licence or registration issued to you under the regulations.

Agents and mandataries

Table 3: Regulations associated with agents and mandataries conducting regulated activities with controlled substances

Context	Section or subsection
Authorized persons
Authorizations — agents and mandataries	4 An agent or mandatary of a person, including an employee of that person or another person that is acting under a contract with that person, may conduct an activity if the following conditions are met: (a) in the case of the person, (i) the person is authorized under these Regulations to conduct the Activity, and (ii) if applicable, the provincial professional regulatory authority of the province in which they are practising does not prohibit the delegation of the Activity to the agent or mandatary; and (b) in the case of the agent or mandatary, (i) if applicable, they are authorized by the provincial professional regulatory authority of the province in which they are practising to conduct the Activity, (ii) the agent or mandatary does so as part of their role as agent or mandatary or their employment duties and functions or in the performance of their contract, and (iii) the agent or mandatary complies with the requirements that apply to the person referred to in paragraph (a).
Loss or theft — agent or mandatary	68 (1) If an agent or mandatary of a licensed dealer becomes aware of a loss or theft of a controlled substance, the agent or mandatary must notify the licensed dealer immediately.

Explanation

You can allow someone else, such as an employee or contractor, to carry out certain activities with controlled substances on your behalf, but only if specific conditions are met. This allows delegation to be done responsibly and legally, while maintaining accountability and compliance with the regulations.

How to comply

As the licensed dealer, you have overall responsibility for management and supervision of all activities involving controlled substances that are covered by your licence and for ensuring that those activities comply with the Act and its regulations.

It is recommended that you document who is conducting activities as your agent or mandatary and what activities you are delegating to them.

• You must be authorized under the regulations to conduct the activity yourself before it can be delegated to an agent or mandatary.

The person you delegate the activity to (your agent or mandatary) must:

• perform the activity as part of their job, contract, or official role, and
• follow all the same regulatory requirements that apply to you

Ceasing activities

Table 4: Regulations associated with ceasing activities with controlled substances

Context	Section or subsection
Notice – ten days	28(1) A licensed dealer must notify the Minister in writing within 10 days after one of the following changes occurs: (b) the licensed dealer ceases to produce or package a mixture or finished product that is set out in the most recent update of the information and label referred to in paragraph 11(1)(g).
Notice of cessation of activities	29(1) A licensed dealer that intends to cease conducting activities at their site — whether on or before the expiry of their licence — must notify the Minister in writing to that effect at least 30 days before ceasing those activities.
Content of notice	29(2) The notice must be signed and dated by the senior person in charge and contain the following information: (a) the expected date of the cessation of activities at the site; (b) a description of the manner in which any remaining controlled substances on the site as of that date will be disposed of by the licensed dealer, including (i) if some or all of them will be sold or provided to another licensed dealer that will be conducting activities at the same site, their name and, if applicable, title, (ii) if some or all of them will be sold or provided to another licensed dealer that will not be conducting activities at the same site, their name and, if applicable, title, as well as the municipal address of their site, and (iii) if some or all of them will be destroyed, the anticipated date of destruction and the municipal address of the place at which the destruction is to be carried out; (c) the municipal address of the place at which the licensed dealer’s documents will be kept after activities have ceased; and (d) the name, municipal address, telephone number and, if applicable, the email address of a person whom the Minister may contact for further information after activities have ceased.
Update	29(3) After having ceased to conduct the Activities, the licensed dealer must submit to the Minister a detailed update of the information referred to in subsection (2) if it differs from what was set out in the notice. The update must be signed and dated by the senior person in charge.

Explanation

If you decide to stop conducting activities with controlled substances before your licence expires, you must notify the Controlled Drugs Section.

How to comply

When you are producing or packaging products containing controlled substances, you must submit a list of these products to the Controlled Drugs Section.

• Should you stop producing or packaging a product, whether permanently or temporarily, you must update your product list accordingly.
• When you permanently stop producing or packaging a product, you must notify the Controlled Drugs Section in writing within 10 days.
• For example, if you are assembling 10 different products with drug identification numbers (DIN) with the same controlled substance and you stop assembly of 5 of these DIN products, you need to amend your product list, but the controlled substance would remain on your licence. Similarly, should you discontinue all DIN products containing a given controlled substance, while having to retain samples, you would update your product list accordingly, and the substance would still remain on your licence until you are no longer required to keep the retain samples.

If you plan to stop conducting all activities with controlled substances at your licensed site, you must notify the Controlled Drugs Section in writing at least 30 days before you stop conducting activities.

• You can notify the Controlled Drugs Section of any cessation of activities by email.

Email: cds-sdc@hc-sc.gc.ca

You must confirm that all controlled substances have been removed from the licensed site before the licence ends or expires. If controlled substances need to be destroyed (such as inventory, client returns and waste), you must do this while your licence is active. You cannot possess controlled substances without a licence. Please see the Destruction section for more details.

What to include in a notice of cessation of activities

The notice that you will stop all activities with controlled substances must be signed and dated by the Senior Person in Charge. If any information changes in this notice, you must update it. The Senior Person in Charge must sign and date any update.

See the section on Designated Personnel in this document for more information on the Senior Person in Charge.

You must include the following information in the notice of cessation of activities:

• the expected date of the cessation of activities at the licensed site
• a description of how you will dispose of any remaining controlled substances, including:
  1. if you will sell or provide some or all of them to another licensed dealer that will be conducting activities at the same location, the name and title of that dealer
  2. if you will sell or provide some or all of them to another licensed dealer that will not be conducting activities at the same location, the name and title of that dealer and the address of their licensed site
  3. if you will destroy some or all controlled substances, the anticipated date on which you will destroy them and the address of the location where you will destroy them
• the address of the location where your documents will be kept after activities have ceased
• the name, address, telephone number and email address of a person whom we may contact for further information after activities have ceased

Licence renewal

The Controlled Drugs Section provides advance notification to remind you of the expiry of your licence. The dealer’s licence renewal package will be sent to you before your licence expires, and will include an application form for you to complete and submit. It is your responsibility to renew your licence before the expiry date. If not, your site will no longer be able to legally conduct activities with, or possess, controlled substances.

Designated personnel

Persons in charge

Table 5: Regulations associated with persons in charge of controlled substances

Context	Section or subsection
Qualified person in charge present	53 A licensed dealer may conduct an activity in relation to a controlled substance at their site only if the qualified person in charge or an alternate qualified person in charge is present at the site.
Senior person in charge	8(1) An applicant for a dealer’s licence must designate only one individual, who may be the applicant if the applicant is an individual, as the senior person in charge who has overall responsibility for management of the Activities with respect to controlled substances that are specified in the licence application.
Qualifications	8(2) Only an individual who has sufficient knowledge of the provisions of the Act and these Regulations that are applicable to the Activities specified in the licence application to properly carry out their duties may be designated as a senior person in charge.
Qualified person in charge	9(1) An applicant for a dealer’s licence must designate only one individual, who may be the applicant if the applicant is an individual, as the qualified person in charge who is responsible for supervising the Activities with respect to controlled substances that are specified in the licence application and for ensuring that those activities comply with these Regulations, as well as with any terms or conditions of the licence and any permit issued under these Regulations.
Alternate qualified person in charge	9(2) An applicant for a dealer’s licence may designate an individual, who may be the applicant if the applicant is an individual, as an alternate qualified person in charge who is authorized to replace the qualified person in charge when that person is absent.
Qualifications	9(3) Only an individual who meets the following requirements may be designated as a qualified person in charge or an alternate qualified person in charge: (a) they work at the site specified in the dealer’s licence application; (b) they (i) hold a diploma, certificate or credential awarded by a post-secondary educational institution in Canada in a field or occupation that is relevant to their duties, such as pharmacy, medicine, dentistry, veterinary medicine, pharmacology, chemistry, biology, pharmacy technician, laboratory technician, pharmaceutical regulatory affairs or supply chain management or security, or (ii) hold a diploma, certificate or credential that is awarded by a foreign educational institution in a field or occupation referred to in subparagraph (i) and hold one of the following assessments that establishes the equivalency of the diploma, certificate or credential to one of the documents referred to in that subparagraph: (A) an equivalency assessment as defined in subsection 73(1) of the Immigration and Refugee Protection Regulations, or (B) an equivalency assessment issued by an institution or organization that is responsible for issuing equivalency assessments and is recognized by a province; (c) they have sufficient knowledge of and experience with the use and handling of the controlled substances specified in the dealer’s licence application to properly carry out their duties; and (d) they have sufficient knowledge of the provisions of the Act and these Regulations that are applicable to the Activities specified in the dealer’s licence application to properly carry out their duties.
Exception	9(4) An applicant for a dealer’s licence may designate an individual who does not meet any of the requirements set out in paragraph (3)(b) as a qualified person in charge or an alternate qualified person in charge if (a) no other individual working at the site meets those requirements; (b) those requirements are not necessary for the Activities specified in the licence application; and (c) the individual has sufficient knowledge acquired from any combination of education, training and work experience to properly carry out their duties.

Explanation

One of the requirements of holding a dealer’s licence is that you employ designated personnel (also known as Persons in Charge, or PIC). There are 3 designated personnel roles:

• Senior Person in Charge (Senior PIC)
• Qualified Person in Charge (QPIC)
• Alternate Qualified Person in Charge (A/QPIC), if applicable

The people in these 3 roles work together to support adequate control over activities with controlled substances.

It takes training and intentional effort to implement the systems and documentation required to comply with the regulations and effectively maintain control over your controlled substances inventory.

Roles and responsibilities of designated personnel

Designated personnel have specific duties and must have certain qualifications.

The Senior PIC is responsible for the management of all activities with controlled substances.

• The Senior PIC must understand the specific rules that apply to the dealer’s licensed activities.
• The Senior PIC is responsible for ensuring that adequate resources, such as personnel, are assigned to those activities.
• A Senior PIC cannot fill the QPIC role by default when the QPIC is absent; their duties are complementary, but distinct. For example, a Senior PIC cannot receive controlled substances. A Senior PIC cannot have the combination to the vault or safe, or keys to the cage. If a Senior PIC is designated as a QPIC, then the responsibilities of a QPIC would apply.

The QPIC is responsible for supervising activities with controlled substances and for ensuring that those activities comply with the regulations, including any terms or conditions of the licence and any permit issued. Adequacy of QPIC and A/QPIC supervision will be assessed during an inspection.

All designated personnel

• must be approved by the Controlled Drugs Section
• must be familiar with the relevant regulatory provisions and have knowledge about the use and handling of the controlled substances listed on your licence
• should be aware of the diversion risk of those controlled substances

You should document and communicate clear roles and responsibilities for the QPIC and A/QPICs. It should always be clear which person is working in the capacity of QPIC or A/QPIC.

How to comply

Activities

When documenting roles and responsibilities, activities may include:

• verifying inventory
• purchasing
• receiving
• manufacturing (such as mixing and tableting operations, etc.)
• analytical testing
• quality control sampling
• packing for transportation
• sending, transporting, and delivering

All activities with controlled substances at your licensed site must be done in accordance with a perpetual tracking system allowing for the reconciliation of the inventory.

You must designate 1 QPIC. This person must work at the site specified on your licence. Before a QPIC can supervise the activities with the controlled substances listed on your licence, the Controlled Drugs Section must approve the QPIC.

You may employ an A/QPIC at the licensed site to support the QPIC with routine activities as well as perform the duties of the QPIC when the QPIC is absent.

• The Controlled Drugs Section must approve any request for the addition of an A/QPIC. You may request to have more than 1 A/QPIC. Refer to the section Changes to persons in charge for more information.
• A QPIC, or an A/QPIC (when acting as the QPIC) must be at the licensed site while activities with controlled substances are happening. They are responsible for supervising each working shift during which activities with controlled substances are being conducted.
• The Senior PIC can also be designated as an A/QPIC in the instances where a QPIC leaves the organization without a replacement; however, this must be approved by the Controlled Drugs Section.

Secure environ

The QPIC or A/QPIC must be the only individual with keys or combinations to the secure environ.

• To minimize the risk of diversion, you should have mechanisms in place to maintain limited access to the secure environ.
• Do not share any keys, swipe cards, or lock combinations with an employee that is not a QPIC or A/QPIC.

Knowledge and training

To properly carry out their duties, the Senior PIC, QPIC and, if applicable, the A/QPIC must:

• be familiar with the provisions of the Controlled Drugs and Substances Act and the Controlled Substances Regulations
• have sufficient knowledge to properly carry out their duties
• have knowledge of the risk of the controlled substances under their care that may be diverted to an illegal market
• be familiar with guidance documents developed by Health Canada, including but not limited to the following:
  • Directive on Physical Security Requirements for Controlled Substances and Drugs Containing Cannabis
  • Guidance on reporting loss or theft of controlled substances and precursors (CS-GD-005)
  • Guidance on detecting, recording and reporting suspicious transactions for controlled substances and precursors (CS-GD-025).

You are responsible, through the Senior PIC, for providing adequate resources to train the QPIC, A/QPIC(s) as well as all other employees handling controlled substances. The personnel must be aware of the relevant regulatory requirements. They should receive initial and ongoing training relevant to their job responsibilities.

• training may include following a written training program and job shadowing, which should include being up to date on the regulations
• training should be provided before implementing new or revised procedures
• written evidence, such as training records, should be available for auditing purposes

Changes to persons in charge

Table 6: Regulations associated with changes to persons in charge of controlled substances

Context	Section or subsection
Changes requiring prior approval by Minister
Application	23(1) A licensed dealer must obtain the Minister’s approval before making any of the following changes by submitting a written application to the Minister: (c) the replacement of the senior person in charge; (d) the replacement of the qualified person in charge; or (e) the replacement or addition of an alternate qualified person in charge.
Notice — five days	27 A licensed dealer must notify the Minister in writing within five days after a person ceases to act as the qualified person in charge or an alternate qualified person in charge.
Notice — 10 days	28(1) A licensed dealer must notify the Minister in writing within 10 days after one of the following changes occurs: (a) a person ceases to act as the senior person in charge;

Explanation

Before making any changes to the designated personnel (QPIC, A/QPIC, Senior PIC), you must obtain approval from the Controlled Drugs Section. This allows us to know who is responsible for the regulated activities at the licensed site. The Controlled Drugs Section will issue a personnel list with the approved personnel under the licence.

Email: cds-sdc@hc-sc.gc.ca

How to comply

You must stop all controlled substance activities if the QPIC ceases to work at the site and there is no approved A/QPIC. Activities can resume once a new QPIC is approved.

You must have the Controlled Drugs Section’s approval before making any of the following changes to the designated personnel:

• replacing the Senior PIC
• replacing the QPIC
• replacing or adding an A/QPIC

If a QPIC, A/QPIC or Senior PIC leaves their position, you must notify the Controlled Drugs Section no later than:

• 5 days after a person stops to act as the QPIC or an A/QPIC
• 10 days after a person stops to act as the Senior PIC

The application to submit an amendment can be found on the Controlled Substances web page.

Security measures

Physical security measures

Table 7: Regulations associated with physical security measures of controlled substances

Context	Section or subsection
Protective measures	66 A licensed dealer must take all reasonable measures to ensure the security of any controlled substance, licence or permit in their possession.

Explanation

You must protect controlled substances from loss and theft. You are responsible for ensuring the security of the controlled substances in your possession. This includes controlled substances at your licensed site, during transportation, and during temporary storage.

How to comply

You must take any reasonable measures to secure:

• any dealer’s licence or any permit for controlled substances in your possession.
• any controlled substance in your possession. This includes while the controlled substance is at your licensed site and during transportation from your licensed site.

To establish physical security, you must comply with the:

• Directive on Physical Security Requirements for Controlled Substances and Drugs Containing Cannabis (the Directive), which establishes minimum security standards for the storage of controlled substances
• physical security measures approved by the Controlled Drugs Section during the application process for a new or amended licence. Refer to the section Changes to approved security measures for more information on amendment applications

The QPIC must verify that the alarm system is operational and checked regularly or at least once a year. This includes:

• testing the sensors and alarms to confirm that they are functioning properly and that they trigger an alarm response with the monitoring center, as applicable. The QPIC must do this for the licensed site and the approved secure environ
• keeping records of the results of sensor and alarm system testing. These records must be retained for 2 years

You must store controlled substances securely and only in the approved secure environ(s) listed on your licence.

• Note that each secure environ is distinct; and the security level is assigned to that area only. If you plan to store controlled substances in multiple secure environs, you must include them all in your licence application or amendment and they must be approved by the Controlled Drugs Section before you can use them to store controlled substances.

You must calculate the street value of all the controlled substances in an approved secure environ, including waste and samples, so that you do not exceed the security level approved on your licence. The street value must never exceed what is allowed by the approved security level.

• Street values for controlled substances are found in the Directive. Not all controlled substances will have a street value.
• Email the Controlled Drugs Section and Status team for any questions related to street value calculations.

Email: cds-sdc@hc-sc.gc.ca

Email: status-demandedestatut@hc-sc.gc.ca

Only the QPIC or A/QPIC can open and close the approved secure environ.

• Access to the approved secure environ must be restricted to persons whose presence is required for their work responsibilities or to authorized employees. This means that maintenance staff and contractors should not have access to a secure environ without being escorted by the QPIC or an A/QPIC.

You may store only controlled substances in a secure environ. You must not keep other drugs or articles, such as financial files, equipment, records, or packaging materials in the approved secure environ, unless they are directly related to controlled substance activities, and can only be accessed by authorized personnel.

Important: The QPIC or an A/QPIC must physically supervise all transactions with controlled substances at the licensed site. If there is no QPIC or A/QPIC present to supervise operations at the licensed site, you must store and lock all controlled substances in an approved secure environ. See the section on Designated personnel for more information about supervision.

Changes to approved security measures

Table 8: Regulations associated with changes to approved security measures of controlled substances

Context	Section or subsection
Application	23(1) A licensed dealer must obtain the Minister’s approval before making any of the following changes by submitting a written application to the Minister: (a) a change affecting the security measures in place at the site specified in the dealer’s licence;

Explanation

Security measures are designed to minimize the risk of diversion of controlled substances to illegal markets. Security measures are reviewed during the application process for a new or amended dealer’s licence and may be confirmed during an inspection. Once security measures are approved, they are expected to be maintained. Changes to the security measures approved during the application process must be evaluated and approved by the Controlled Drugs Section before they are implemented so that the security of controlled substances will not be compromised, even temporarily.

How to comply

You must submit any proposed changes affecting the physical security of your secure environ to the Controlled Drugs Section for review and approval, even if the change will not affect the security level.

The proposed changes could include:

• adding a ventilation opening to the vault
• replacing broken equipment in the secure environ
• adding or removing sensors from the secure environ
• adding or removing cameras from the secure environ

You must submit an application for amendment and obtain approval from the Controlled Drugs Section before implementing the change to security measures at the licensed site.

• The application for amendment form is found on the Controlled Substances web page.

In instances where you are making changes to your secure environ as a result of an inspection, you are required to submit these changes to the Controlled Drugs Section by the target date listed in your corrective action plan. Simply listing the changes in your corrective action plan is not considered a notification of change.

Email: cds-sdc@hc-sc.gc.ca

In the event of damaged security equipment that poses an immediate security risk, you should inform the Controlled Drugs Section. You may proceed with replacement of the equipment on an emergency basis so that overall security is not compromised. However, you must notify the Controlled Drugs Section immediately and submit an application for amendment.

In instances where you are replacing broken items in your secure environ where there is no impact on the security level, such as racking, freezers or fridges, there is no need to notify the Controlled Drugs Section.

Loss and theft detection and reporting

Table 9: Regulations associated with loss and theft detection and reporting of controlled substances

Context	Section or subsection
Protective measures	66 A licensed dealer must take all reasonable measures to ensure the security of any controlled substance, licence or permit in their possession.
Loss or theft — licences and permits	67 If a licensed dealer becomes aware of a loss or theft of their licence or permit, the dealer must provide a written report to the Minister within 72 hours after becoming aware of the loss or theft.
Loss or theft — agent or mandatary	68(1) If an agent or mandatary of a licensed dealer becomes aware of a loss or theft of a controlled substance, the agent or mandatary must notify the licensed dealer immediately.
Written report	68(2) If a licensed dealer becomes aware of a loss of a controlled substance that cannot be explained on the basis of normally accepted business activities, or of a theft of a controlled substance, or is notified by an agent or mandatary of such a loss or theft, the dealer must (a) in the case of a loss, provide a written report to the Minister within 72 hours after becoming aware or being notified of the loss; or (b) in the case of a theft, provide (i) a written report to a police force within 24 hours after becoming aware or being notified of the theft, and (ii) a written report to the Minister within 72 hours after becoming aware or being notified of the theft, including a confirmation that the report required under subparagraph (i) has been provided.
Partial protection against self-incrimination	70 A report provided under any of sections 67 to 69, or any evidence derived from it, is not to be used or received to incriminate the licensed dealer or their agent or mandatary in any criminal proceeding against them other than a prosecution under section 132, 136 or 137 of the Criminal Code.
Explainable loss of controlled substance	83 A licensed dealer that becomes aware of a loss of a controlled substance that can be explained on the basis of normally accepted business activities or that is notified by their agent or mandatary of such a loss, must record the following information: (a) the date on which the dealer became aware or was notified of the loss; (b) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; (c) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any; and (d) the explanation for the loss.

Explanation

High quality internal investigations of loss and theft, with effective corrective and preventive actions, are essential to reduce the risk of diversion to illegal markets.

Theft occurs when a party (person or group) removes some or all of your controlled substances inventory or documents without your consent.

Loss is defined as the physical disappearance of controlled substances that is not the result of a theft, and/or is unexplained at the time of discovery.

How to comply

Theft

You must always report thefts to a member of the police force and Health Canada. Police force includes local police, provincial police or the Royal Canadian Mounted Police (RCMP).

Loss

You must always report to Health Canada when your inventory disappears unexpectedly and for any loss of a finished product(s) packaged in their immediate container.

Unexplainable loss is always beyond what you would expect, based on normally accepted business practices.

Explainable loss

An explainable loss, also known as an operational loss, is a loss you would expect to occur based on the types of activities you conduct with controlled substances. Thresholds for explainable loss are the levels of loss you would expect to occur for each activity with controlled substances on a day-to-day basis. You must establish, justify with data, and document thresholds for explainable loss for each activity that you conduct with a controlled substance.

Activities such as production, testing, and packaging have explainable losses associated with them. Explainable losses are expected to occur during processes such as granulation, mixing, transferring bulk powders, tableting, and residual viscous liquids on containers.

If you determine that a loss can be explained based on normally accepted business activities, and therefore does not have to be reported to the National Monitoring Section, the following information must still be recorded:

• name, form and quantity of the lost controlled substances
• in the case of a mixture or finished product:
  • the name or if applicable, the brand name of the product or the name of the compound containing it
  • the form of the product or compound containing it
  • the strength per unit of the controlled substances in the product or compound
  • the number of units per package and the number of packages
  • its drug identification number (DIN), if any
• date on which you became aware or were notified of the loss
• explanation for the loss

Loss or theft detection

All sites should develop a procedure to detect, investigate and report a possible loss or theft of a controlled substance or a licence or permit issued by Health Canada.

To detect a loss or theft of a controlled substance in a timely manner, you should have a procedure in place for comparing the theoretical inventory against the physical inventory (which can sometimes only be accomplished by weighing).

You should document these procedures.

If one of your agents or mandataries finds out that a controlled substance has been lost or stolen, they must tell you right away. Your procedures should reflect the process and timelines to notify you of a loss or theft.

Internal investigations

You must conduct an internal investigation of all discrepancies in inventory, including discrepancies related to a loss in transit.

You should also:

• complete and resolve investigations of losses or thefts in a timely manner
• conduct your own internal investigations related to losses in transit, even if your client or the licensed dealer who provided the controlled substances completes and shares their own investigation
• document your findings in an auditable format
• take sufficient measures to fix any security issues identified by the internal investigation, where applicable

Documenting and resolving an internal investigation

Information to include in your internal investigation report:

• the signal that triggered the discovery of the loss or theft (how you noticed it)
• root cause of loss or theft, including detailed steps taken to determine the root cause (such as confirming details from the client). Root causes can include picking errors, inventory system issues or over shipments.
• ongoing information being gathered from the transportation company, if applicable
• corrective and preventive actions taken as a result of the investigation to prevent the issue from happening again

Corrective actions should include:

• any changes you have made to your procedures to reduce how often you experience loss or to address repeated root causes
• steps taken with the transport company, for losses in transit
• timelines for expected implementation. For solutions with long timelines for implementation, interim corrective actions should be implemented.

The internal investigation must not delay reporting the event to Health Canada. You should monitor the effectiveness of your corrective and preventive actions. If the problem persists, additional corrective and preventive actions may be required.

Investigations locating misplaced item(s), such as picking errors, should be documented and are considered explainable losses that do not need to be reported. If a report is submitted to the National Monitoring Section prior to the conclusion of an internal investigation, any additional information from that investigation should be provided to the National Monitoring Section as an amendment to the initial report.

Email: ocs.reporting-rapporter.bsc@hc-sc.gc.ca

You must keep a copy of the internal investigation report for a minimum of 2 years. Health Canada may request it at any time.

Reporting

Timing: notifying and reporting

If you experience, or are notified of, an unexplainable loss of a controlled substance, you must report the loss to Health Canada, in writing, within 72 hours after becoming aware of the event.

If you experience, or are notified of, a theft of a controlled substance, you must:

• notify the police within 24 hours of becoming aware of the event
• report the theft to Health Canada, in writing, within 72 hours after becoming aware of the event

If you experience, or are notified of, the loss or theft of documents issued by Health Canada (like a dealer’s licence or permit), you must report the loss or theft to the Health Canada office who issued the document by email within 72 hours of becoming aware of the event.

Email for a dealer’s licence: cds-sdc@hc-sc.gc.ca

Email for permits: permitspermis@hc-sc.gc.ca

How to report a loss or theft

You can fill out a loss or theft report:

• on the Health Canada E-Services Portal (fill in information online and submit from there), or
• via the loss or theft report form and email it to the National Monitoring Section

Email: ocs.reporting-rapporter.bsc@hc-sc.gc.ca

You should provide all information available at the time of submission, including all details from your internal investigation report, if available. Amendments to the report can be made if an internal investigation is still in progress.

For more information on how to fill out the loss or theft form, see our guidance on Reporting loss or theft of controlled substances and precursors (CS-GD-005).

Who reports?

The QPIC or an A/QPIC is responsible for reporting whether they discover the loss or theft or are informed of it.

• If someone other than the QPIC discovers a loss or a theft, that person should inform the QPIC as soon as possible.

When the loss or theft occurs during transit, and the delivery of a controlled substance is not completed, the QPIC or an A/QPIC of the licensed dealer who shipped the controlled substance is responsible to report the loss or theft.

Record keeping

Licensed dealer’s identification

Table 10: Regulations associated with controlled substance licensed dealer’s identification

Context	Section or subsection
Identification	54 A licensed dealer must include their name, as set out in their dealer’s licence, on all the means by which it identifies itself in regard to their activities in relation to a controlled substance, including labels, shipping documents, invoices and advertising.

Explanation

The regulations authorize licensed dealers to act as suppliers of controlled substances. Complete and consistent record keeping reinforces proper management of controlled substances and minimizes the risk of diversion to illegal markets.

How to comply

Any records related to controlled substance activities must carry the exact name of your business as it appears on your licence.

• You must include your licensed dealer name on all documents and records relating to controlled substances, such as orders, shipping documents, invoices, advertising, and product labels. See the section on Advertising in this document for more information on what is considered acceptable for advertising.
• In instances where multiple licensed dealers are involved with a given product, for example, 1 licensed dealer is the manufacturer and another is the distributor, the label of the product would reflect the manufacturer’s name to be clear which licensed dealer is selling/providing the product.

Required records and maintenance of records

Table 11: Regulations associated with controlled substance records and maintenance of records

Context	Section or subsection
Changes requiring prior approval by Minister
Application	23(1) A licensed dealer must obtain the Minister’s approval before making any of the following changes by submitting a written application to the Minister: (b) a change affecting the method of recording information referred to in paragraph 11(1)(j);
Information and documents	23(2) The licensed dealer must provide the Minister with the following with respect to a change referred to in subsection (1): (a) in the case of a change affecting the security measures in place at the site specified in the dealer’s licence or the method of recording information referred to in paragraph 11(1)(j), details of the change;
Recording information and retention and provision of documents
Method of recording	86 A licensed dealer that records any information under these Regulations must do so using a method that permits an audit of it to be made at any time.
Substances ordered and received	75 A licensed dealer that orders or receives a controlled substance must record the following information: (a) the name and, if applicable, title of the individual placing the order for the controlled substance or receiving it; (b) with respect to the person from whom the controlled substance is ordered or received, their name and, if applicable, title, as well as their municipal address; (c) the date of the order or receipt; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) subject to subparagraph (iv), its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) subject to subparagraph (iv), its form, its strength, the number of containers and, if applicable, the number of units per container, (iii) subject to subparagraph (iv), its drug identification number, if any, and (iv) if the finished product has been previously returned by an individual for the purposes of destruction to a pharmacist, pharmacy technician, practitioner, hospital or particular person, only the identifier marked on the collection container of the finished product and the number of collection containers.
Substances sold	76 A licensed dealer that sells or provides a controlled substance must record the following information: (a) the name and, if applicable, title of the individual selling or providing the controlled substance; (b) with respect to the person to whom the controlled substance is sold or provided, their name and, if applicable, title, as well as their municipal address; (c) the date of the sale or provision; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (e) in the case of a controlled substance that is a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Substances produced or packaged	77 A licensed dealer that produces or packages a controlled substance must record the following information with respect to the substance: (a) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (b) in the case of a mixture or finished product, (i) its name or, if applicable, its brand name, as well as the name and quantity of the controlled substance it uses to produce the mixture or finished product, or that is contained in the mixture or finished product that it packages, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Substances in stock	78 A licensed dealer that stores a controlled substance must record the following information with respect to the substance: (a) the date on which it is placed in stock; (b) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (c) in the case of a mixture or finished product, (i) subject to subparagraph (iv), its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) subject to subparagraph (iv), its form, its strength, the number of containers and, if applicable, the number of units per container, (iii) subject to subparagraph (iv), its drug identification number, if any, and (iv) if the finished product has been previously returned by an individual for the purposes of destruction to a pharmacist, pharmacy technician, practitioner, hospital or particular person, only the identifier marked on the collection container of the finished product and the number of collection containers.
Written orders	79 A licensed dealer that receives a written order for a controlled substance must record the following information: (a) the name and, if applicable, title of the individual receiving the order; and (b) the date of the order and the date on which it was received.
Transportation	80 A licensed dealer that delivers, sends or transports a controlled substance to another person must record the following information: (a) the dealer’s name and, if applicable, title, as well as their municipal address; (b) if an agent or mandatary of the dealer delivers, sends or transports the controlled substance, their name; (c) with respect to the other person, their name and, if applicable, title; (d) the municipal address of the place where the controlled substance will be delivered, sent or transported; (e) the date of the delivery, sending or transportation; (f) the means of transportation; (g) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (h) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Substances imported	81 A licensed dealer that imports a controlled substance must record the following information: (a) the date of the importation; (b) the name and municipal address of the exporter; (c) the country of exportation and any country of transit or transhipment; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Substances exported	82 A licensed dealer that exports a controlled substance must record the following information: (a) the date of the exportation; (b) the name and municipal address of the importer; (c) the country of final destination and any country of transit or transhipment; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.

Explanation

It is important to always maintain control over your controlled substances inventory. Careful documentation and record keeping are necessary to comply with the regulations and prevent and detect diversion.

You must have systems in place to maintain the accuracy and reliability of all records for controlled substance activities. Good record keeping allows you to know where controlled substances are at your licensed site and during transportation to minimize the risk of diversion to the illegal market.

How to comply

You must maintain a perpetual inventory which lists all controlled substances in your possession at any given time, including returns, finished products, substances to be destroyed, and retained or in process samples.

Upon receipt of a controlled substance, you must weigh, or count and verify, the controlled substance received and add it to your inventory system on the day of receipt.

In instances where you receive controlled substances in pallets consisting of boxes sealed in a tamper evident manner, 100% verification means conducting a count of the sealed boxes.

If you discover a damaged seal or any evidence of tampering, to resolve the issue, you should open the box with the damaged seal and count the items inside.

If you rely on sealed case counts and experience a loss from a vendor, to resolve the issue, you should open sealed boxes from that vendor and count the items inside until such time that losses are no longer an issue.

You must provide information about transactions you have conducted with controlled substances; such as copies of any books, records or documents upon request from Health Canada at any time (for example, during an inspection).

You must have prior approval from the Controlled Drugs Section before making any changes to the way you record your information.

Email: cds-sdc@hc-sc.gc.ca

What to record

Records should be complete and accurate. You must record the following information:

• for controlled substances you order:
  • name and title of the person who placed the order
  • name, title, and municipal address of the person you ordered from
  • date of the order
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
      • Note that if the finished product was previously returned to a pharmacist, pharmacy technician, practitioner, hospital or particular person for the purpose of destruction, only the identifier marked on the collection container (and number of collection containers) need to be recorded
      • See the section on Destruction of controlled substances previously returned by an individual or particular person for the purposes of destruction for more details.

• for controlled substances you receive:
  • name and title of the person who received the order
  • name, title, and municipal address of the person who sent it to you
  • date on which you received it
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
      • Note that if the finished product was previously returned to a pharmacist, pharmacy technician, practitioner, hospital or particular person for the purpose of destruction, only the identifier marked on the collection container (and number of collection containers) need to be recorded
      • See the section on Destruction of controlled substances previously returned by an individual or particular person for the purposes of destruction for more details.
• for controlled substances you sell or provide, including any returns to your suppliers:
  • name and title of the person selling or providing the controlled substance
  • name, title, and municipal address of the person to whom you sold or provided the controlled substance
  • the date on which you sold or provided the controlled substance
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
• for controlled substances you produce or package:
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name or brand name of the mixture or finished product you produce or package, and the name and quantity of the controlled substance it uses to produce the mixture/product or that it contains in the package
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
• for controlled substances you store:
  • the date the controlled substance is added to your inventory
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
      • Note that if the finished product was previously returned to a pharmacist, pharmacy technician, practitioner, hospital or particular person for the purpose of destruction, only the identifier marked on the collection container (and number of collection containers) need to be recorded
      • See the section on Destruction of controlled substances previously returned by an individual or particular person for the purposes of destruction for more details.
• for written orders you receive for a controlled substance:
  • name and title of the person receiving the order
  • the date of the order
  • the date you received the order
• for controlled substances you deliver, transport, or send:
  • name, title (if applicable), and municipal address on your dealer’s licence
  • name of the agent or mandatary who is delivering, transporting, or sending the controlled substance, if applicable
  • name and title of the person receiving the controlled substance
  • the municipal address of the place where the controlled substance will be delivered, transported, or sent
  • date on which you delivered, transported, or sent the substance
  • the means of transportation, or how the controlled substance will be delivered, transported, or sent
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
• for controlled substances you import:
  • date on which you imported it
  • name and municipal address of the exporter
  • country of exportation and any country of transit or transshipment
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any
• for controlled substances you export:
  • date on which you exported it
  • name and municipal address of the importer
  • country of final destination and any country of transit or transshipment
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    • name of the mixture or finished product, its brand name, name of the controlled substance it contains
    • form, strength, number of containers, number of units per container
    • drug identification number, if any

Electronic inventory management system

Electronic inventory management systems can help you maintain a perpetual inventory.

Before it is used to meet the regulations, you should confirm that the information in the electronic inventory management system is maintained in real-time. This means that the quantity in the inventory management system (theoretical count) matches a physical count at any given time.

Electronic inventory systems should be protected against system failures, for example with back-ups and audit trails.

In addition, electronic inventory management systems should have certain features to minimize the risk of diversion to the illegal market. See the Orders section of this document for a list of features to look for in electronic systems.

Your electronic inventory management system should not allow open access to change inventory quantities of controlled substances; however, if it does, you should monitor the system by having procedures in place to review all manual inventory adjustments. More specifically, verify that manual adjustments are:

• justified (demonstrated by a thorough investigation that includes a root cause analysis and appropriate corrective actions)
• documented
• made and approved in a timely manner
• approved only by the QPIC or A/QPIC
• supported by approved procedures

Auditability

Table 12: Regulations associated with auditability of records for controlled substances

Context	Section or subsection
Recording information and retention and provision of documents
Method of recording	86 A licensed dealer that records any information under these Regulations must do so using a method that permits an audit of it to be made at any time.
Documents to retain	87 A licensed dealer and a former licensed dealer must keep (a) any document containing the information that it is required to record under these Regulations for two years after the day on which the last record is recorded in the document; (b) every written order, in sequence as to date and number, for two years after the day on which it is received; and (c) every declaration, report and letter of authorization for two years after the day on which it is provided or received.
Place	88 The documents must be accessible (a) at the site specified in the licensed dealer’s licence; or (b) in the case of a document retained by a former licensed dealer, at a place in Canada.
Quality of documents	89 The documents must be complete and readily retrievable and the information in them must be legible and indelible.
Providing documents	90 A licensed dealer and a former licensed dealer must provide any documents that the Minister requests in the time and manner that the Minister specifies.
Information and documents	55 A licensed dealer must, not later than the date specified in the Minister’s written request to that effect, provide the Minister with any relevant information or document to demonstrate their compliance with the provisions of the Act and these Regulations.

Explanation

As a licensed dealer, you must maintain records that are easily retrievable and auditable so that you may provide these in a timely manner when requested by Health Canada.

How to comply

As a regulated party, you must:

• understand all your legal and regulatory obligations
• be prepared to be inspected at any reasonable time
• make records and documents readily available to Health Canada
• give the inspector assistance and provide them with any information requested
• confirm that your products, activities, and procedures comply with applicable laws

You must keep any document containing information that you are required to record pertaining to controlled substances in a manner that permits an audit to be made at any time. Records include:

• every declaration
• every written order
• letter of authorization,
• a copy of every report submitted to OCS, and
• any records showing that you comply with your legal obligations

Records also include the controlled substances inventory records to allow for inventory verification during an inspection.

Examples of documents that may be requested for audit include:

• receiving records
• purchasing records
• inventory records (physical or electronic)
• import or export permits and declarations
• transportation documents such as waybills
• reports, such as monthly activities reports and loss or theft reports

For more information on Health Canada inspections, refer to the section on Inspections in this document.

If you choose to rely on a third party to hold any records required by the regulations, then you must confirm that those records are available for an audit at any time, are accurate, indelible, and will be maintained by the third party for 2 years.

• We recommend that you have a service agreement stating the requirements and periodic audits of the third party to confirm that they are maintaining the records to your satisfaction.
• The 2 years start after the day on which the last record is recorded in the document.

System to manage activities with controlled substances

You should have an overall system in place to manage and review your procedures for activities with controlled substances. While a quality management system is not a requirement, it is the simplest way to manage the controls needed to meet the regulations.

The key elements of a quality management system include:

• quality documents written in clear and direct language to maintain consistency in their application
• review and approval of all quality documents before they are implemented (with appropriate notification and approval of any changes made)
• a system to monitor and update the quality documents, as necessary
• training of employees on these procedures so that they understand what they must do and the importance of following the procedures as part of their role in minimising the risk of diversion

Monthly activities report

Table 13: Regulations associated with monthly activities reports for controlled substances

Context	Section or subsection
Monthly report	85(1) Subject to subsection (2), a licensed dealer must provide to the Minister, within 15 days after the end of each month, a monthly report that contains the name and quantity of each controlled substance (a) that is set out in any of Schedules 1 to 4 that the licensed dealer receives, produces, packages, sells, provides, imports, exports or destroys during the month; (b) that is contained in a mixture or finished product that the licensed dealer receives, packages, sells, provides, imports, exports or destroys during the month or that the dealer has used to produce a mixture or finished product during the month; (c) that is in the physical inventory taken at the site specified in their licence at the end of the month; and (d) that has been lost in the course of conducting activities during the month and whose loss can be explained on the basis of normally accepted business activities.
Non-renewal or revocation of licence	85(2) If a licensed dealer’s licence expires without being renewed or is revoked, the dealer must provide to the Minister, within three months after the expiration or revocation, a report in respect of the portion of the month during which the licence was valid that contains the information referred to in subsection (1), in which the quantity in physical inventory is to be calculated as of the date of expiry or revocation.

Explanation

The monthly activities report summarizes all authorized activities for all controlled substances at your licensed site. The reports allow us to fulfill our international obligations to monitor the movement of controlled substances in and out of Canada and allow you to be sure that your product has moved securely through the supply chain.

How to comply

You must submit a monthly activities report using the template provided by the National Monitoring Section.

• The report template will be sent to you every year in January or within 1 month of obtaining a dealer’s licence.
• Follow the instructions provided with the report template.

The report of activities conducted during a given month is due on the 15^th of the following month. If no activities were conducted during the reporting period, you must submit a nil report (only the cover page is needed for a nil report).

To fill out the monthly activities report:

• complete a full physical inventory count
• using your records from the month, complete the monthly activities report template as provided by the National Monitoring Section

For additional guidance on the monthly activities report, you can email the National Monitoring Section.

Email: ocscontrolleddrugsreport-rapportsustancescontrolleesbsc@hc-sc.gc.ca

Monthly inventory counts

Explanation

It is important to know how controlled substances inventory moves through your facility and that it all balances to verify that nothing was lost. This requires periodic inventory counts in all areas where controlled substances are found.

How to comply

You must keep a signed and dated record of the name, form, and quantity of any controlled substance in stock at the end of each month. To do this, perform a physical inventory at the end of each month. You must use an actual count (or weight if applicable) of the physical inventory and not the theoretical quantity from an electronic inventory system.

• The inventory can be done either at the end of the last day of the month or prior to doing any transactions for the following month.
• You should verify tamper-evident seals of containers during the inventory, if applicable. Inventory records should include what seal was verified and by whom. A tamper-evident seal means that, if someone tried to open the container, you would know.
• The monthly physical inventory must include all controlled substances at your licensed site such as finished product, raw materials, reference standards, samples, complaint samples, products to be destroyed and returns.
• Use the physical inventory counts to complete the monthly activities report.

If you identify any differences between the theoretical and physical count, you must investigate and document these discrepancies. You must also explain and document any manual adjustments made to your records. Any unexplainable losses greater than the threshold for normal business activities must be reported to the National Monitoring Section within 72 hours of discovery. See the Loss and theft detection and reporting section for more information on loss or theft detection, internal investigations and reporting.

Suspicious transactions

Table 14: Regulations associated with suspicious transactions of controlled substances

Context	Section or subsection
Suspicious transaction	69(1) A licensed dealer must provide a written report containing the following information to the Minister within 72 hours after becoming aware of a transaction occurring in the course of their activities that it has reasonable grounds to suspect may be related to the diversion of a controlled substance to an illicit market or use: (a) with respect to the licensed dealer, (i) in the case of an individual, their name and, if applicable, title, as well as their municipal address and telephone number, or (ii) in the case of an organization, its name, municipal address and telephone number, as well as the title of the position held by the individual making the report; (b) with respect to the other party to the transaction, their name and municipal address; (c) details of the transaction, including its date and time, as well as its type; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any; and (f) a detailed description of the reasons for the dealer’s suspicions.
Good faith	69(2) No civil proceedings lie against a licensed dealer for having provided the report in good faith.
Non-disclosure	69(3) A licensed dealer must not disclose that it has provided the report or disclose details of it with the intent to prejudice a criminal investigation, whether or not a criminal investigation has begun.
Partial protection against self-incrimination	70 A report provided under any of sections 67 to 69, or any evidence derived from it, is not to be used or received to incriminate the licensed dealer or their agent or mandatary in any criminal proceeding against them other than a prosecution under section 132, 136 or 137 of the Criminal Code.

Explanation

It is important that you take reasonable measures to validate the identity of your customers. You should understand the normal and expected transactions conducted by your customers and have a system in place that can flag transactions that may appear suspicious in nature. This practice supports that you are taking every reasonable step to prevent the diversion of controlled substances.

You will not be subject to any criminal or civil liability for reporting a suspicious transaction, provided the report is made in good faith.

How to comply

How to detect suspicious transactions

You must have a system in place to detect suspicious transactions that is documented in a written procedure,.

At minimum, the system should:

• have indicators to flag potential suspicious transactions
• include a ledger or log that you will use to keep a record of suspicious transactions
• include when you were made aware of a potential suspicious transaction by an agent or mandatary

A list of indicators to assist you in the identification of suspicious transactions can be found in Appendix A of our Guidance on detecting, recording and reporting suspicious transactions for controlled substances and precursors (CS-GD-025). The list is not exhaustive. While your system may flag to you a potential suspicious transaction, it is your responsibility to then determine if there are reasonable grounds to suspect the transaction could be related to diversion. You must investigate and follow up with the client. For example, a client may suddenly order much more of a given substance than they typically do. This, alone, does not constitute reasonable grounds to suspect that the transaction may be related to diversion. You must investigate further, and, if the investigation results are satisfactory, you do not need to report the transaction to the National Compliance Section.

Some examples of satisfactory investigation results include:

• drug shortages
• public health trends
• administrative errors (such as accidentally ordering too much)
• verbal explanations provided by a pharmacist in good standing whose identity you validated.

In addition, if a client orders more of a controlled substance than usual and they advise you that they will continue to order more and they provide a reasonable explanation, then the subsequent transactions involving that product may also not need to be reported, so long as they are consistent with the explanation or the new ordering pattern that the client described.

You must keep the results of your investigation for 2 years in an auditable format. You must not disclose that you have identified a suspicious transaction to your clients, to prevent interference with a criminal investigation, regardless of whether a criminal investigation has begun.

How to report

During your activities, if you, or your agent or mandatary, have reasonable grounds to suspect that a transaction may be related to the diversion of a controlled substance to an illegal market, you must inform the National Compliance Section within 72 hours after becoming aware of the transaction.

You must report all suspicious transactions, including orders that you fulfill and orders that you do not complete. The suspicious transaction report form and any attachments can be emailed to the National Compliance Section.

Email:compliance-conformite@hc-sc.gc.ca

What to include in a suspicious transaction report

A suspicious transaction report must include:

• if you are an individual filling it out, your name, title, municipal address and telephone number
• if you are a company filling it out, your company’s name, address, telephone number and the title of the individual making the report
• the name and address of the other party to the transaction
• details of the transaction, including the date, time, type
• the name, form and quantity of the controlled substance
• in the case of a product or compound, the name, form, strength, the number of units per package and the number of packages and the drug identification number that is assigned to the product, if any
• a detailed description of the reasons for suspecting that the transaction may be related to the diversion of a controlled substance

For information on how to report a suspicious transaction to our office, refer to our Guidance on detecting, recording and reporting suspicious transactions for controlled substances and precursors (CS-GD-025).

Importation and exportation

Import or export permit

Table 15: Regulations associated with import or export permits for controlled substances

Context	Section or subsection
Authorized activities	50 A licensed dealer may conduct the following activities if it does so in accordance with their dealer’s licence and any permit issued under these Regulations: (d) import or export a controlled substance.
Permit integrity	35(2) A person must not alter or deface in any manner an import permit.
Providing copy of permit	38 The holder of an import permit must provide a copy of the permit to the customs office at the time of importation.
Import Permits
Application	34(1) A licensed dealer must submit to the Minister, before each importation of a controlled substance, an application for an import permit that contains the following information: (a) their name and, if applicable, title, as well as their municipal address; (b) their dealer’s licence number and their business registration number assigned by the Minister of National Revenue; (c) the name and municipal address of the proposed customs broker for the licensed dealer, if any; (d) the name of the customs office where the importation is anticipated and the proposed date of importation; (e) the name and municipal address, in the country of export, of the exporter from whom the controlled substance is being obtained; (f) the name of the carrier that is proposed to transport the controlled substance to the customs office where the importation is anticipated; (g) each proposed mode of transportation and any proposed country of transit or transhipment; (h) in the case of a controlled substance set out in any of Schedules 1 to 4, (i) its name as set out in the dealer’s licence, (ii) its CAS registry number, if any, (iii) if it is a salt, the name of the salt, (iv) its form, (v) its purity and anhydrous content, and (vi) its quantity; and (i) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Signature and attestation	34(2) The application must (a) be signed and dated by the qualified person in charge or an alternate qualified person in charge; and (b) include an attestation by that person that, to the best of their knowledge, (i) the importation does not contravene the laws of the country of exportation or any country of transit or transhipment, and (ii) all of the information and documents submitted in support of the application are correct and complete.
Additional information and documents	34(3) The licensed dealer must, not later than the date specified in the Minister’s written request to that effect, provide the Minister with any information or document that the Minister determines is necessary to complete the review of the application.
Permit integrity	43(2) A person must not alter or deface in any manner an export permit.
Providing copy of permit	46 The holder of an export permit must provide a copy of the permit to the customs office at the time of exportation.
Export
Application	42(1) A licensed dealer must submit to the Minister, before each exportation of a controlled substance, an application for an export permit that contains the following information and document: (a) their name and, if applicable, title, as well as their municipal address; (b) their dealer’s licence number and their business registration number assigned by the Minister of National Revenue; (c) the name and municipal address of the proposed customs broker for the licensed dealer, if any; (d) the name of the customs office where the exportation is anticipated and the proposed date of exportation; (e) the name and municipal address of the importer in the country of final destination; (f) the name of the carrier that is proposed to transport the controlled substance from the customs office where the exportation is anticipated; (g) each proposed mode of transportation and any proposed country of transit or transhipment; (h) in the case of a controlled substance set out in any of Schedules 1 to 4, (i) its name as set out in the dealer’s licence, (ii) its CAS registry number, if any, (iii) if it is a salt, the name of the salt, (iv) its form, (v) its purity and anhydrous content, and (vi) its quantity; (i) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any; and (j) a copy of the import authorization issued by the competent authority in the country of final destination that sets out the name of the importer and the municipal address of their site in that country.
Signature and attestation	42(2) The application must (a) be signed and dated by the qualified person in charge or an alternate qualified person in charge; and (b) include an attestation by that person that, to the best of their knowledge, (i) the exportation does not contravene the laws of the country of final destination or any country of transit or transhipment, and (ii) all of the information and documents submitted in support of the application are correct and complete.
Additional information and documents	42(3) The licensed dealer must, not later than the date specified in the Minister’s written request to that effect, provide the Minister with any information or document that the Minister determines is necessary to complete the review of the application.
Providing copy of permit	46 The holder of an export permit must provide a copy of the permit to the customs office at the time of exportation.

Explanation

Permits document the entry and exit of controlled substances in and out of Canada.

Proper documentation is required for the movement of controlled substances across our borders and helps us fulfill our international obligations.

You can email the Permits Section for any general enquiries on import and export permits.

Email: permitspermis@hc-sc.gc.ca

How to comply

Only a licensed dealer can import or export a controlled substance.

• You must have a permit to import or export a controlled substance.
• You must apply to the Permits Section and obtain a permit before each import or export of a controlled substance.
• The permit application is available at:
  • Application for import permit for controlled substance or class A precursor
  • Application for export permit for controlled substance or precursors

Permits are only valid:

• for the exact substance or preparation (including preparation type, package size and concentration) listed on the permit, which should match the product label and the monthly activities report
• up to the maximum quantity indicated on the permit
• for 1 shipment (shipments cannot be split)
• for the time frame indicated on the permit
• for the exact importer and exporter listed on the permit

The expiry date specified on the permit indicates the last day that the shipment authorized by the permit may enter or exit Canada.

All information on the permit must be accurate. For example, the name and the address of where the controlled substances were shipped must be the same as the address found on the import or export permit.

• If you identify errors prior to the shipment, such as with the name and address, quantity, or name of the substances, on the permit, email the Permits Section and they will issue a new permit with the correct information.

Email: permitspermis@hc-sc.gc.ca

You must verify that an official copy of the permit is:

• for exports, attached to the controlled substances shipment on the way to the destination
• maintained in the records of the licensed dealer importing or exporting the controlled substance

A copy of the permit must be provided to the customs office at the time of import or at the time of an export when requested.

Packaging - for transportation and export

Table 16: Regulations associated with packaging controlled substances for transport and export

Context	Section or subsection
Packaging — conditions	51 A licensed dealer that packages a controlled substance may only do so in accordance with their dealer’s licence issued under these Regulations.
Requirements during transport	65(1) A licensed dealer that takes delivery of a controlled substance that it has imported or that delivers, sends or transports a controlled substance to another person may only do so if it (a) ensures that its outermost container is inconspicuous, without any mark identifying its contents, and sealed in such a manner that the container cannot be opened without breaking the seal; (b) ensures that all inner containers are sealed in such a manner that they cannot be opened without breaking the seal; (e) in the case of an imported controlled substance, delivers, sends or transports it directly to the site specified in their licence after it is released under the Customs Act; and (f) in the case of a controlled substance that is to be exported, delivers, sends or transports it directly from the site specified in their licence to the customs office where it will be exported.

Explanation

It is essential that controlled substances be tamper sealed to facilitate detection of losses during transport.

How to comply

If you are exporting controlled substances, you must:

• send controlled substances directly from the site specified on your licence to the customs office where it will be exported
• securely pack the controlled substances in a tamper-evident package. Tamper-evident means you will know if someone tried to open the package

If you are importing controlled substances, you must have the controlled substances sent directly to the site specified on your licence, and ensure that during delivery:

• all inner containers are securely packed in a tamper-evident package. Tamper-evident means you will know if someone tried to open the package
• the outermost container is inconspicuous, without any mark identifying its contents

Engaging with the exporter on this topic may help promote awareness of and compliance with applicable packaging requirements.

Importation or exportation declaration

Table 17: Regulations associated with the declaration of an import or export of controlled substances

Context	Section or subsection
Import permit
Declaration	39 The holder of an import permit must provide the Minister, within 15 days after the day of release of the controlled substance specified in the permit in accordance with the Customs Act, with a declaration that contains the following information: (a) their name and, if applicable, title; (b) their dealer’s licence number and the number of the import permit; (c) the name of the customs office from which the controlled substance was released and the date of the release; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, (i) its name as set out in the dealer’s licence, (ii) if it is a salt, the name of the salt, (iii) its form, and (iv) its quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Export permits
Declaration	47 The holder of an export permit must provide the Minister, within 15 days after the day of export of the controlled substance specified in the permit, with a declaration that contains the following information: (a) their name and, if applicable, title; (b) their dealer’s licence number and the number of the export permit; (c) the name of the customs office from which the controlled substance was exported and the date of export; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, (i) its name as set out in the dealer’s licence, (ii) if it is a salt, the name of the salt, (iii) its form, and (iv) its quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.

Explanation

Once a permit is issued, you must notify the Permits Section to let us know what happened with the shipment, even if the permit was not used or if it expired. This is called an importation declaration or exportation declaration, and it confirms that the information in the permit is consistent with what was imported or exported in keeping with our international reporting obligations for controlled substances.

You can email the Permits Section for any general enquiries on import and export permits and declarations.

Email: permitspermis@hc-sc.gc.ca

How to comply

You must notify the Permits Section by email with a declaration within 15 days after the product is imported or exported.

• You must complete a declaration with a quantity of zero even if you do not use the permit, or the permit has expired.
• The declaration form is supplied when a permit is issued, or you can obtain it by emailing the Permits Section.

Email: permitspermis@hc-sc.gc.ca

You should send the declaration as soon as possible to prevent discrepancies in the monthly activities report. See the section on the Monthly activities report for more information.

The declaration must contain the:

• name and title of the permit holder
• dealer’s licence number
• permit number for the shipment
• name, form, and quantity of the controlled substance being shipped
  • for a salt, include the name of the salt
  • for preparations, include the preparation type and the package size listed on the permit
  • for mixture or finished products, include the name or brand name, name of the controlled substance it contains, DIN (if applicable), form, strength per unit, number of units per package and the number of packages
• name of the customs office where the shipment is released
• date of import or export. The date of import or export is the date the controlled substance was released from customs (not the date that it arrived at or left your licensed site)
• signature from the QPIC or A/QPIC to confirm that all the information in the declaration is correct and complete to the best of their knowledge
  • for imports, the QPIC or A/QPIC who will receive the shipment signs the declaration after it is released under the Customs Act
  • for exports, the QPIC or A/QPIC at the licensed site from which the shipment will be transported to the port of exit signs the declaration

Import shipments may be held by customs for further investigation. The 15 day period starts once the import has been released by customs. You should keep all documentation on the release of the shipment from customs.

Once a shipment is released by Canada Border Services Agency (CBSA), the importer or customs broker is usually notified about the release of the shipment. This date is also identifiable through broker records or notifications from the carrier. The 15 days starts once the import has been released by customs. You should keep all documentation on the release of the shipment from customs.

You must also submit a declaration (with a quantity of zero) for any unused import or export permits:

• when your permits expire
• when your licensed site closes
• when you receive a new licence following a name or Certificate of Incorporation change

Email: permitspermis@hc-sc.gc.ca

Transportation

Table 18: Regulations associated with the transport of controlled substances

Context	Section or subsection
Protective measures	66 A licensed dealer must take all reasonable measures to ensure the security of any controlled substance, licence or permit in their possession.
Delivery, Sending and Transportation
Requirements during transport	65(1) A licensed dealer that takes delivery of a controlled substance that it has imported or that delivers, sends or transports a controlled substance to another person may only do so if it (a) ensures that its outermost container is inconspicuous, without any mark identifying its contents, and sealed in such a manner that the container cannot be opened without breaking the seal; (b) ensures that all inner containers are sealed in such a manner that they cannot be opened without breaking the seal; (c) takes all reasonable measures to ensure the security of the controlled substance while it is being delivered, sent or transported; (d) uses a method of delivery, sending or transportation that ensures the tracking of the controlled substance until the consignee receives it;

Explanation

When making a delivery of controlled substances, you must take all reasonable measures to secure the controlled substances during transportation and until they reach their final destination to prevent their diversion to an illegal market.

How to comply

If you are sending a controlled substance, you are responsible for the security of that controlled substance in transit.

• You must take precautions to secure any controlled substance during transportation to provide protection against loss or theft. For example, you should assess and be prepared for the worst-case scenario to determine the impact and the risk of diversion to illegal markets.
• You must choose a transport company that is able to safeguard its security in transit.
• You must seal the packages in a tamper-evident manner. For example, you can use tamper-evident tape to facilitate clear identification of tampering of boxes containing controlled substances. Tamper-evident means that if someone were to open the package, you or the intended recipient would know.
• You should not display any identification of the controlled substance, such as name, potency, or quantities, on the boxes or label. You should seal and store shipping containers filled with controlled substances in a discreet manner that does not distinguish them from other shipping containers.

Controlled substances must be tracked throughout handling and transport up to the final recipient.

• This may include, but is not limited to, a chain of signatures identifying individuals (by name or employee identifier) who handle the substance.
• Transportation methods should allow for accurate documentation of how the substance is handled.

You must conduct an internal investigation for all discrepancies in inventory, including loss or theft during transportation. See the investigating loss or theft during transportation section for more details.

Selecting a transport company

You must select a transport company that can meet the regulatory requirement of keeping controlled substances secure in transit. The transport company should be educated on the documents that you are required to produce.

A signed service agreement between you and the transport company is strongly recommended and it should include clear definitions of each party’s responsibilities when it comes to:

• the safe transport of packages
• method of tracking, such as chain of signatures
• investigation protocol for losses in transit
• process and timelines for notifying you of a loss or theft
• implementation of corrective actions should a loss or theft occur

If a transport company cannot support your compliance with the regulatory requirements for the secure transport of controlled substances, then you should explore an alternate carrier.

Who should report a loss or theft during transportation (loss in transit)

It is the sender’s responsibility to maintain the security of the controlled substances in transit.

The official individual is responsible for reporting the loss or theft. For a controlled substances licensed dealer, the QPIC or their alternate would represent the official individual.

The official individual that discovers or is informed of an incident in transit must investigate and report the incident. The report must include:

• a statement that the substance was lost in transit
• the name of the company transporting the controlled substances
• the shipment number or tracking number, if applicable
• the name of the other party involved in the transaction (either who the shipment came from or who was meant to receive it)

Only the official individual who arranged the shipment (usually the supplier) can report confirmed incidents in transit.

Investigating loss or theft during transportation (loss in transit)

A comprehensive internal investigation should be initiated by both the sender and recipient without delay after an actual or a suspected loss or theft in transit.

• Both parties should do their own investigation, but they are encouraged to work together to resolve the issue.
• If you are the sender, you are responsible for engaging any party, such as the transport company, that may have come into possession of the controlled substance before and during transportation. As the sender, you are the one ultimately responsible for the security of the substances in transit.

You should implement corrective actions to prevent the re-occurrence of losses or thefts such as changes to security measures, service agreements, or chosen transport company.

• The QPIC must be confident that the transport company has taken satisfactory corrective actions that will prevent a loss in transit from happening again. If the QPIC is not satisfied with the corrective actions taken by the transport company, you should consider clarifying your expectations or revisiting your service agreement with the transport company, when applicable.

You must maintain and keep a copy of the internal investigation report for at least 2 years. Health Canada may request a copy at any time.

Sales

Selling to authorized persons

Table 19: Regulations associated with the sale and provision of controlled substances to authorized persons

Context

Section or subsection

Authorized activities

50 A licensed dealer may conduct the following activities if it does so in accordance with their dealer’s licence and any permit issued under these Regulations: (b) sell or provide a controlled substance to (i) another licensed dealer, (ii) with the exception of a restricted drug, a pharmacist, other than one who is practising in a hospital, (iii) a practitioner, (iv) with the exception of a restricted drug, a hospital, (v) a person exempted under subsection 56(1) of the Act with respect to that controlled substance, if there are terms and conditions for the sale or provision by a licensed dealer that are specified in the exemption, (vi) the Minister, or (vii) a government laboratory;

Explanation

You can only sell or provide controlled substances to persons authorized by the regulations.

How to comply

You can sell or provide any controlled substance to:

• another licensed dealer
• a pharmacist (with the exception of a restricted drug) who is not practicing in a hospital
• a practitioner
• a hospital (with the exception of a restricted drug)
• a person to whom an exemption relating to the substance has been granted under section 56 of the Controlled Drugs and Substances Act
• the Minister
• a government laboratory

You cannot sell a restricted drug to a pharmacist or a hospital; however, you can sell a restricted drug to an institution or practitioner if the institution or practitioner first submits an application to Health Canada to purchase the drug, and Health Canada issues a prior written authorization for the sale.

If you are providing or selling to:

• a section 56 exemption holder, the terms and conditions of that exemption must be followed, including required documentation.
• another licensed dealer, you should verify that their licence is valid, and that the relevant controlled substance is listed on their licence.

You should have a procedure in place to verify the status of the person to whom the controlled substances are sold or provided. Individuals such as pharmacists or practitioners must be in good standing with their college at the time of the transaction. You cannot sell to anyone who has an active prohibition placed on their licence by their provincial professional regulatory authority. See the Prohibition section.

Prohibition

Table 20: Regulations associated with prohibition on selling or providing controlled substances to a pharmacist or practitioner

Context	Section or subsection
Sale to a pharmacist
Exception - prohibition	57(2) A licensed dealer must not sell or provide to the pharmacist a controlled substance that is the subject of a prohibition on the pharmacist’s professional practice imposed by the provincial professional regulatory authority.
Sale to a practitioner
Exception – prohibition	58(3) A licensed dealer must not sell or provide to the practitioner a controlled substance that is the subject of a prohibition on the practitioner’s professional practice imposed by the provincial professional regulatory authority.

How to comply

You cannot sell to a pharmacist or practitioner who has a prohibition placed on their licence by their provincial professional regulatory authority.

• You are responsible for ensuring that the pharmacist or practitioner is in good standing with their provincial professional regulatory authority at the time of the transaction.
• You can confirm this by reviewing the relevant provincial professional regulatory authority website.
• You should have a system in place for checking this information.

Orders

Table 21: Regulations associated with written orders of controlled substances

Context	Section or subsection
Sale of Controlled Substances
Sale to another licensed dealer	56 A licensed dealer that sells or provides a controlled substance to another licensed dealer may only do so if it first receives from the other licensed dealer a written order that is signed and dated and that contains the following: (a) with respect to the other licensed dealer placing the order, their name and, if applicable, title, as well as their municipal address; (b) with respect to the licensed dealer selling or providing the controlled substance, their name and, if applicable, title, as well as their municipal address; (c) the date of the order; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any; and (f) in the case of a controlled substance sold or provided for the purposes of destruction, a statement to that effect.
Sale to a pharmacist	57(1) A licensed dealer that sells or provides a controlled substance to a pharmacist may only do so if it first receives from the pharmacist a written order that is signed and dated and that contains the following information: (a) with respect to the pharmacist, their name and the name and municipal address of the place where they practise; (b) with respect to the licensed dealer, their name and, if applicable, title, as well as their municipal address; (c) the date of the order; (d) in the case of a controlled substance set out in any of Schedules 1 to 3, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Sale to a practitioner	58(1) A licensed dealer that sells or provides a controlled substance, other than a restricted drug, to a practitioner may only do so if it first receives from the practitioner a written order that is signed and dated and that contains the following information: (a) with respect to the practitioner, their name and the name and municipal address of the place where they practise; (b) with respect to the licensed dealer, their name and, if applicable, title, as well as their municipal address; (c) the date of the order; (d) in the case of a controlled substance set out in any of Schedules 1 to 3, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Restricted drugs	58(2) A licensed dealer that sells or provides a restricted drug to a practitioner may only do so if (a) the licensed dealer first receives a letter of authorization in which it is named; (b) the practitioner is named in the letter of authorization and the municipal address of the place where they practise is specified in that letter; and (c) the licensed dealer sells or provides the restricted drug only in the quantity specified in the letter of authorization and, if applicable, in the form and strength specified in that letter.
Sale to a hospital	59 A licensed dealer that sells or provides a controlled substance to a hospital may only do so if it first receives from the hospital a written order that is signed and dated by a person permitted to place an order on the hospital’s behalf and that contains the following information: (a) with respect to the hospital, its name and municipal address, as well as the name and title of the person placing the order; (b) with respect to the licensed dealer, their name and, if applicable, title, as well as their municipal address; (c) the date of the order; (d) in the case of a controlled substance set out in any of Schedules 1 to 3, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Sale to an exempted person	60 A licensed dealer that sells or provides a controlled substance to a person exempted under subsection 56(1) of the Act with respect to that substance may only do so in accordance with the terms and conditions for the sale or provision by the licensed dealer that are specified in the exemption and if it first receives from the exempted person a copy of that exemption.
Sale to Minister	61 A licensed dealer that sells or provides a controlled substance to the Minister may only do so if it first receives from the Minister a written order that is signed and dated on the Minister’s behalf and that contains the following information: (a) with respect to the individual signing the order, their name and, if applicable, title, as well as the municipal address of the place where the controlled substance is to be delivered, sent or transported; (b) with respect to the licensed dealer, their name and, if applicable, title, as well as their municipal address and licence number; (c) the date of the order; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Sale to a government laboratory	62 A licensed dealer that sells or provides a controlled substance to a government laboratory may only do so if it first receives from the government laboratory a written order that is signed and dated and that contains the following information: (a) with respect to the government laboratory, its name and municipal address; (b) with respect to the licensed dealer, their name and, if applicable, title, as well as their municipal address and licence number; (c) the date of the order; (d) in the case of a controlled substance set out in any of Schedules 1 to 4, its name, form and quantity; and (e) in the case of a mixture or finished product, (i) its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) its form, its strength, the number of containers and, if applicable, the number of units per container, and (iii) its drug identification number, if any.
Verification of Identity
Orders	64 A licensed dealer that receives an order from a person for a controlled substance must verify the person’s name and, if applicable, their title as well as their signature if it is not known to the licensed dealer.

Explanation

You may only sell or provide controlled substances if you first receive a written order so that you can verify the identity of the person placing the order, thus minimizing the risk of diversion. The orders also help to keep track of the movement of controlled substances and will help with inventory and reconciliation.

Written orders

How to comply

You cannot sell or provide a controlled substance without a signed written order.

The signed written order must contain the following information if it comes:

• From another licensed dealer:
  • name, title, and municipal address of the other licensed dealer
  • your name, title, and municipal address
  • date of the order
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    1. name of the mixture or finished product, its brand name, name of the controlled substance it contains
    2. form, strength, number of containers, number of units per container
    3. drug identification number, if any
  • for destruction: a statement explaining that the controlled substance is being sold or provided for the purpose of destruction
• From a pharmacist:
  • name and municipal address of the place where the pharmacist practices
  • your name, title, and municipal address
  • date of the order
  • name, form, and quantity of any controlled substance except restricted drugs
  • for a mixture or finished product,
    1. name of the mixture or finished product, its brand name, name of the controlled substance it contains
    2. form, strength, number of containers, number of units per container
    3. drug identification number, if any
• From a practitioner:
  • name and municipal address of the place where the practitioner practices
  • your name, title, and municipal address
  • date of the order
  • name, form, and quantity of any controlled substance except restricted drugs
  • for a mixture or finished product,
    1. name of the mixture or finished product, its brand name, name of the controlled substance it contains
    2. form, strength, number of containers, number of units per container
    3. drug identification number, if any
• restricted drugs: the written order must contain all of the above information anda letter of authorization issued by Health Canada that includes:
  1. your name
  2. the practitioner’s name and the municipal address where they practice
     Important: You can only sell/provide to the practitioner the exact quantity, form, and strength of the restricted drug specified in the letter of authorization
• From a hospital:
  • name and municipal address of the hospital
  • name and title of the person placing the order (this person must be permitted to place an order on the hospital’s behalf)
  • your name, title, and municipal address
  • date of the order
  • name, form, and quantity of any controlled substance except restricted drugs
  • for a mixture or finished product,
    1. name of the mixture or finished product, its brand name, name of the controlled substance it contains
    2. form, strength, number of containers, number of units per container
    3. drug identification number, if any
• From an exempted person:
  • a copy of the exemption
  • the information listed in the terms and conditions for the sale or provision specified in the exemption
• From the Minister:
  • name and title of the individual signing the order on the Minister’s behalf
  • municipal address of the place where the controlled substance will be delivered, sent, or transported
  • your name, title, municipal address, and licence number
  • date of the order
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    1. name of the mixture or finished product, its brand name, name of the controlled substance it contains
    2. form, strength, number of containers, number of units per container
    3. drug identification number, if any
• From a government laboratory:
  • name and municipal address of the government laboratory
  • your name, title, municipal address, and licence number
  • date of the order
  • name, form, and quantity of any controlled substance
  • for a mixture or finished product,
    1. name of the mixture or finished product, its brand name, name of the controlled substance it contains
    2. form, strength, number of containers, number of units per container
    3. drug identification number, if any

You must verify that the person placing the order is authorized to order controlled substances. You must verify the name, title, and signature of the person on the order if these are unknown to you.

You must ship the controlled substances to the person or entity at the municipal address indicated on the order. The quantity sold or provided must not exceed the quantity on the order.

You should maintain a list of individuals who are authorized to place an order on your behalf.

Electronic orders

Electronic ordering is acceptable if the digital or electronic signature generated by an electronic ordering system can be authenticated like one signed by hand. You are responsible for ensuring that the system you use allows you to comply with the regulations.

Electronic ordering systems should include the following features:

• secure transactions such that the integrity and security of the information transmitted is protected
• limited access to the data through a series of security checks
• authentication of persons placing orders and those supplying controlled substances so that only licensed dealers, pharmacists, practitioners, hospitals, or other authorized persons order and receive controlled substances
• traceability of controlled substances from order to delivery to maintain the integrity of the custody chain
• retention of accurate data, including the name and quantity of controlled substances ordered and supplied
• the ability to access data and to generate reports on demand

You should implement password protection for orders sent by email as an additional security measure. You should also implement a 2-stage authentication procedure for orders sent through secure fax, such as verifying the client’s name, address, and signature, and calling the client to confirm the order’s legitimacy.

You are not required to obtain the original written order from your clients upon filling orders received electronically, such as by fax, email, or online portal. You must keep all records of electronic orders at the licensed site for a minimum of 2 years in an auditable format.

Multiple deliveries

Table 22: Regulations associated with multiple deliveries of controlled substances

Context	Section or subsection
Anticipated multiple sales	63(1) A licensed dealer that sells or provides a controlled substance, other than a restricted drug, may do so more than once in respect of one order, within six months after the order was made, if the order indicates (a) the number of sales or provisions; (b) the specific quantity for each sale or provision; and (c) the intervals between each sale or provision.
Multiple sales — insufficient stock	63(2) A licensed dealer may sell or provide a controlled substance more than once in respect of one order if, at the time of receipt of the order, the dealer temporarily does not have in stock the quantity of the substance ordered, in which case the dealer may sell or provide the quantity of the substance that the dealer has available and sell or provide the balance later.

How to comply

Anticipated multiple sales

Restricted drugs cannot be delivered in multiple shipments for anticipated future sales.

You can sell or provide a controlled substance (except restricted drugs) more than once from a single written order if the order clearly states:

• how many times the substance will be sold or provided
• how much (the quantity) will be sold or provided each time
• the time gaps between each sale or provision

You can only sell or provide a controlled substance (except restricted drugs) multiple times from a single written order within 6 months of the original order date.

Documentation for these transactions should clearly indicate that the order was fulfilled in multiple deliveries. For example, documentation could include:

• a statement noting multiple deliveries (for example, “Order fulfilled in multiple shipments due to inventory availability”)
• the date on which each shipment was sent out
• proof of delivery for each shipment (for example, signed receipt, delivery confirmation)
• customer communication records (for example, email or portal messages explaining split delivery)
• invoice or billing details showing shipment dates and itemized deliveries
• internal system notes or logs documenting the reason for split delivery and fulfillment status

Insufficient stock

If you temporarily do not have enough stock to fill an order for controlled substances, including restricted drugs, when it’s received, you can provide what you have available right away. It is recommended that you and deliver the remaining balance within 6 months of the original order date.

Documentation is the same as what is expected for anticipated multiple sales.

Destruction

Table 23: Regulations associated with the destruction of controlled substances

Context	Section or subsection
Destruction	52 A licensed dealer specialized in destruction that destroys a controlled substance may only do so in accordance with their dealer’s licence issued under these Regulations.
Destruction at site	71 A licensed dealer that intends to destroy a controlled substance at the site specified in their licence must ensure that the following conditions are met: (a) the licensed dealer obtains the prior approval of the Minister; (b) the destruction is carried out in the presence of two of the following persons, at least one of whom must be a person referred to in subparagraph (i): (i) the senior person in charge, the qualified person in charge or an alternate qualified person in charge, or (ii) a person who works for or provides services to the licensed dealer and holds a senior position; (c) the destruction is carried out in accordance with a method that complies with all federal, provincial and municipal environmental protection legislation applicable to the place of destruction; and (d) as soon as the destruction is completed, the person who carried out the destruction and each of the two persons referred to in paragraph (b) who were present at the destruction sign and date a joint declaration attesting that the controlled substance was destroyed, to which each signatory must add in printed letters their name and, if applicable, title.
Destruction elsewhere than at site	72 A licensed dealer that intends to destroy a controlled substance elsewhere than at the site specified in their licence must ensure that the following conditions are met: (a) the licensed dealer obtains the prior approval of the Minister; (b) the licensed dealer takes all reasonable measures to ensure the security of the controlled substance while it is being transported in order to prevent its diversion to an illicit market or use; (c) the destruction is carried out by a person working for a business that specializes in the destruction of dangerous goods, other than a licensed dealer specialized in destruction, and in the presence of another person working for that business; (d) the destruction is carried out in accordance with a method that complies with all federal, provincial and municipal environmental protection legislation applicable to the place of destruction; and (e) as soon as the destruction is completed, the person who carried out the destruction provides the licensed dealer with a dated declaration attesting that the controlled substance was destroyed and containing (i) the municipal address of the place of destruction, (ii) the date of destruction, (iii) the method of destruction, (iv) in the case of a controlled substance set out in any of Schedules 1 to 4, its name and quantity, (v) in the case of a mixture or finished product, (A) subject to clause (D), its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (B) subject to clause (D), its form, its strength, the number of containers and, if applicable, the number of units per container, (C) subject to clause (D), its drug identification number, if any, and (D) if the finished product has been previously returned by an individual for the purposes of destruction to a pharmacist, pharmacy technician, practitioner, hospital or particular person, only the identifier marked on the collection container of the finished product and the number of collection containers, and (vi) the names, in printed letters, and signatures of the person who carried out the destruction and the other person who was present at the destruction.
Documents
Destruction	84 A licensed dealer that destroys a controlled substance at the site specified in their licence must record the following information: (a) the name and, if applicable, title of the person who carried out the destruction and of the other persons who were present at the destruction; (b) the municipal address of the place of destruction; (c) the date of destruction; (d) the method of destruction; (e) in the case of a controlled substance set out in any of Schedules 1 to 4, its name and quantity; and (f) in the case of a mixture or finished product, (i) subject to subparagraph (iv), its name or, if applicable, brand name, as well as the name of the controlled substance it contains, (ii) subject to subparagraph (iv), its form, its strength, the number of containers and, if applicable, the number of units per container, (iii) subject to subparagraph (iv), its drug identification number, if any, and (iv) if the finished product has been previously returned by an individual for the purposes of destruction to a pharmacist, pharmacy technician, practitioner, hospital or particular person, only the identifier marked on the collection container of the finished product and the number of collection containers.
Delivery, Sending and Transportation
Requirements during transport	65(1) A licensed dealer that takes delivery of a controlled substance that it has imported or that delivers, sends or transports a controlled substance to another person may only do so if it (a) ensures that its outermost container is inconspicuous, without any mark identifying its contents, and sealed in such a manner that the container cannot be opened without breaking the seal; (b) ensures that all inner containers are sealed in such a manner that they cannot be opened without breaking the seal; (c) takes all reasonable measures to ensure the security of the controlled substance while it is being delivered, sent or transported; (d) uses a method of delivery, sending or transportation that ensures the tracking of the controlled substance until the consignee receives it;

Explanation

Destruction procedures, when properly followed, help minimize the risk of diversion to illegal markets by ensuring that controlled substances have completely left the supply chain. Destruction methods must alter or denature the controlled substance to such an extent that its consumption is rendered impossible or improbable.

The recommended procedures for approvals, witnessing, transportation and acceptable methods are detailed in the guidance document Destruction of Narcotics, Controlled and Restricted Drugs and Targeted Substances by Licensed Dealers (CS-GD-020).

Approval before destruction

How to comply

You must get approval from Health Canada before destroying any controlled substances (including laboratory standards and returns). Email the Controlled Substances Program Destructions team for approval and guidance through the application process.

Email: destructions@hc-sc.gc.ca

To get approval, you must provide certain information. This includes an inventory of all controlled substances to be destroyed, their street value, a description of the destruction method, as well as a signed and dated attestation from the QPIC or A/QPIC that the proposed method complies with applicable legislation and that the submitted information is complete and correct.

The QPIC or A/QPIC must compile all drug products containing controlled substances for destruction.

You must conduct destruction using a method that complies with all federal, provincial, and municipal environmental protection legislation where the destruction will take place.

On-site destruction

How to comply

When destruction is performed at your licensed site, qualified witnesses must be present for the full destruction process to confirm that controlled substances were in fact destroyed and not diverted.

At least 2 qualified witnesses who work for you must be present to witness the destruction. At least 1 of the witnesses must be a designated personnel (Senior PIC, QPIC or an A/QPIC). The second witness must be a person who works for or provides services to you and holds a senior position such as:

• physician, pharmacist, veterinarian, or nurse practitioner (all currently licensed and working for the licensed dealer)
• senior management officer at the licensed dealer (such as Manager of Controlled Substances Division or Vice President)

Police officers may also act as witnesses for destructions.

Only the 2 witnesses and any person(s) required to complete the destruction, such as the operator of the equipment, may be present at the destruction.

As soon as the destruction is completed, you must record the following:

• name and title in printed letters (so that it is legible), and signature, of the person who carried out the destruction as well as the 2 witnesses
• municipal address of the place of destruction
• date of destruction
• method of destruction
• name and quantity of any controlled substance
• for a mixture or finished product,
  • name of the mixture or finished product, its brand name, name of the controlled substance it contains
  • form, strength, number of containers, number of units per container
  • drug identification number, if any
    1. Note that if the finished product was previously returned to a pharmacist, pharmacy technician, practitioner, hospital or particular person for the purpose of destruction, only the identifier marked on the collection container (and number of collection containers) need to be recorded

See the section on Destruction of controlled substances previously returned by an individual or particular person for the purposes of destruction for more details.

You must maintain the above records for a minimum of 2 years.

Off-site destruction

Explanation

You must uphold the same level of care and oversight when controlled substances are destroyed off-site as you do when they are destroyed at your own licensed site. This supports the expectation that controlled substances are fully removed from the supply chain, no matter where the destruction takes place.

How to comply

If you would like to destroy controlled substances elsewhere than at your licensed site, you have 2 options:

1. you can either sell the controlled substances to a licensed dealer specializing in the destruction of controlled substances, or
2. you can use a company specializing in the destruction of dangerous goods, that is not a licensed dealer.

1. When you sell to another licensed dealer specializing in destruction

If you send controlled substances to another licensed dealer for destruction, this is considered a sell or provide transaction. A licensed dealer specializing in the destruction of controlled substances must conduct the destruction.

You must receive a written order when sending controlled substances to another licensed dealer for destruction. This could be accomplished through normal business practices such as receipts and invoices exchanged between you and the other licensed dealer. This written order is signed by the QPIC or the A/QPIC, who verifies and attests to the contents of the shipment; therefore, they are accountable for the physical inventory that is sold or provided.

At the licensed dealer specializing in destruction, the QPIC or an A/QPIC at that site must receive the substances since they are the only persons authorized to open the approved secure environ.

The QPIC or an A/QPIC at the licensed dealer specializing in destruction verifies the accuracy of all goods received against the written order within 24 hours and enters it in the inventory system.

2. When you accompany controlled substances to an off-site destruction

If you are using a business that specializes in the destruction of dangerous goods and that is not a licensed dealer, you must accompany the controlled substances to that site. You must take all reasonable measures to secure the controlled substances during transportation to the off-site location.

• Your QPIC or A/QPIC must witness the destruction. The other witnesses for an off-site destruction must be: the person performing the destruction (who works for the business that specializes in the destruction of dangerous goods), and another person working for that business.

The person who carried out the destruction must immediately provide you with a dated declaration that attests that the controlled substances were completely destroyed and contains the following information:

• names in printed letters (so that they are legible) and signatures of the person who carried out the destruction and the other persons present at the destruction
• municipal address of the place of destruction
• date of destruction
• method of destruction
• name and quantity of any controlled substance
• for a mixture or finished product,
  • name of the mixture or finished product, its brand name, name of the controlled substance it contains
  • form, strength, number of containers, number of units per container
  • drug identification number, if any
    1. Note that if the finished product was previously returned to a pharmacist, pharmacy technician, practitioner, hospital or particular person for the purpose of destruction, only the identifier marked on the collection container (and number of collection containers) need to be recorded

       See the section on Destruction of controlled substances previously returned by an individual or particular person for the purposes of destruction for more details.

Destruction of controlled substances previously returned by an individual or particular person for the purposes of destruction

Explanation

Also known as post-consumer returns, a controlled substance previously returned by an individual for the purposes of destruction is an unused or expired substance that is, or contains, a controlled substance, that has been returned by an individual to a pharmacist, pharmacy technician, practitioner, hospital or particular person, for the purpose of destruction.

How to comply

If you handle controlled substances previously returned by an individual or particular person for the purposes of destruction, you are required to have minimal secure environs in accordance with the Directive on Physical Security Requirements for Controlled Substances and Drugs Containing Cannabis, including sufficient space to manage the volume of goods.

• These products must be stored in a manner that prevents their diversion, such as in a restricted-access area. Since these products are commonly mixed with other prescription and non-prescription medications, their illicit market value is unknown. Consequently, these products will not contribute to the value of inventory permitted by your Security Directive level.

You should destroy controlled substances previously returned by an individual or particular person for the purposes of destruction on a regular basis, as an accumulation may increase the risk of diversion.

A declaration for controlled substances previously returned by an individual or particular person for the purposes of destruction must be completed as soon as the destruction is completed and contain the following:

• names in printed letters (so that they are legible) and signatures of the person who carried out the destruction, including the other person(s) present at the destruction (witnesses)
• municipal address of the place of destruction
• date of destruction
• method of destruction
• the identifier marked on the collection container(s)
• the number of collection containers

You are required to maintain inventory of controlled substances previously returned by an individual or particular person for the purposes of destruction, which includes recording the containers of returns in stock with their unique identifiers. You are not required to include these activities in the monthly activities report when you destroy controlled substances previously returned by an individual or particular person for the purposes of destruction.

You must keep appropriate records for at least 2 years from the date of destruction, in a manner that permits an audit to be made.

Particular persons

Table 24: Regulations associated with destruction and particular persons

Context	Section or subsection
General
Definitions	1 (1) The following definitions apply in the Regulations. particular person means a person that, in the course of that person’s operations, unexpectedly receives a controlled substance from an individual for the purposes of destruction.
Particular persons
Sale of controlled substances
Authorization	221 A particular person may sell or provide a controlled substance to a licensed dealer, pharmacist or police force for the purposes of destruction.
Delivery, sending and transportation
Authorization	222 A particular person may deliver, send or transport a controlled substance to a licensed dealer, pharmacist or police force for the purposes of destruction.
Return for destruction	224 An individual who has reasonable grounds to believe that a controlled substance in their possession was obtained in accordance with the provisions of the Act and its regulations may, for the purposes of destruction, deliver, transport, sell or provide the substance directly to one of the following persons: (d) a particular person.

Explanation

Particular persons may come into the possession of controlled substances unexpectedly and need to sell or provide these to an LD where they can be safely destroyed because particular persons are not authorized to conduct the destruction themselves.

How to comply

You may receive controlled substances from a “particular person” (someone who, in the course of their business operations, unexpectedly received the substance for destruction). The substance must be received solely for the purpose of destruction. No resale or reuse.

Keep clear records of who provided the substance and a description of how they came into its possession (the reason).

Advertising

Prohibition on advertising to the general public

Table 25: Regulations which prohibit the advertisement of controlled substances to the general public

Context	Section or subsection
Advertising
Restrictions	235 A person that advertises a controlled substance may only do so if (a) the substance is not a restricted drug; (b) the advertisement is directed to a person that is not part of the general public; and
Security
Protective measures	66 A licensed dealer must take all reasonable measures to ensure the security of any controlled substance, licence or permit in their possession.

Explanation

You cannot advertise or promote controlled substances to the general public.

How to comply

You cannot

• advertise or list a controlled substance on a web page, social media, flyer, etc., that is accessible to the general public.
  • If you partner with a company that does not hold a licence, such as an affiliate or subsidiary, you must verify that this unlicensed company is not advertising your activities to the public. In any public communication, it must be clear which business holds a valid licence and is authorized to provide controlled substances.
• publicly display your licence. For example, do not display your licence in your lobby or on your web page or social media. You may mention on your web page that you hold a valid licence, but the licence itself cannot be displayed.

Information on controlled substances, other than a restricted drug, may be included in published literature or trade publications only intended for licensed dealers, pharmacists, pharmacy technicians, practitioners, or hospitals.

Other advertisement

Table 26: Regulations associated with the written advertisement of controlled substances, other than to the general public

Context	Section or subsection
Advertising
Restrictions	235 A person that advertises a controlled substance may only do so if (a) the substance is not a restricted drug; (c) in the case of a written advertisement, (i) the advertisement appears in a document distributed to, or in a trade publication for, (A) a licensed dealer, (B) a pharmacist, pharmacy technician or practitioner, or (C) a hospital, and (ii) the advertisement contains, in a conspicuous place, a legible and intelligible statement that the substance is a controlled substance.

Explanation

You cannot advertise a restricted drug. If you advertise a controlled substance, other than a restricted drug, in accordance with the regulations, meaning other than to the general public, you must clearly show that the written advertisement is for a controlled substance.

How to comply

Check the substance type. Make sure that the substance is not listed as a restricted drug under Schedule 4 of the regulations.

Limit your audience. Only advertise in written materials sent to or intended for:

• licensed dealers
• pharmacists
• pharmacy technicians
• practitioners
• hospitals

Include a statement that clearly and visibly says that the substance is a controlled substance.

If you are the owner of a controlled substance, you may also require a licence even if you do not physically handle the controlled substance.

For more information about what is considered advertising, refer to Health Canada’s Guidance on distinction between advertising and other activities for health products or contact the National Compliance Section at compliance-conformite@hc-sc.gc.ca