Health Canada gives a licence holder 24 hours to notify the police and 10 days to notify the Minister after a cannabis theft or a reportable loss. That clock starts on the date of discovery, not the date your internal investigation closes.
Cannabis loss and theft reporting is the duty, set out in the Cannabis Regulations, for a licence holder to tell Health Canada about any theft of cannabis and any loss that normal operations cannot explain. The report goes in on the Loss or Theft Report Form for Cannabis (CS-FRM-011). Losses that normal business activity does explain are not reported at all. They are written up in an incident report, signed, and held on site for two years.
For an exporting Licensed Producer, the stakes run past a single form. Canada aggregates national loss and theft data for the United Nations under its treaty obligations, and a German or Australian partner will ask how you investigate inventory discrepancies during supplier qualification. Misread the categories and you either flood Ottawa with noise or miss something an inspector finds later.
What counts as a reportable loss
A reportable loss is a loss that cannot be explained on the basis of normally accepted operations or business activities. One sentence carries the whole test, and it is where producers get the line wrong in both directions.
Health Canada's guidance on reporting loss or theft of cannabis names the categories you file under:
- Cannabis lost or misplaced while it is being transported, delivered, or sent between locations, filed as a loss in transit.
- Product stolen during that same movement, filed as a theft in transit.
- An inventory count that falls short of your records beyond the limits your organisation set for itself.
- Waste you can account for, but not on the basis of normal business activity, which Health Canada calls unusual waste.
- Theft at the site, broken out as armed robbery, break and entry, grab theft, or pilferage by an employee.
- Packaging errors, manufacturer's shortages, and yield loss nobody can explain.
What you record instead of report
Product rendered unserviceable by spillage or breakage is not a reportable loss. Neither is a drop in market value, and neither is yield loss that sits inside limits you defined in advance. Those events still need paperwork: an incident report signed by the official individual and a witness, kept on site for two years, showing the date, the product name, the THC and CBD concentration, the quantity, and a summary of what happened. Surpluses follow the same path. You do not report them, but you record them.
| Event | Report to Health Canada | What stays on file |
|---|---|---|
| Count short beyond your defined limits | Yes, CS-FRM-011 | Report plus investigation notes |
| Pilferage by an employee | Yes, plus police within 24 hours | Report plus police incident number |
| Carrier loses a pallet in transit | Yes | Report plus carrier investigation summary |
| Jar dropped, product unusable | No | Signed incident report, two years |
| Yield loss inside predefined limits | No | Signed incident report, two years |
Volume has nothing to do with it. What decides the question is whether your own written limits account for the gap, which means the limits have to exist before the gap does. Producers who never wrote them down end up negotiating the definition with an inspector after the fact. That conversation goes badly.
The 24-hour and 10-day reporting clock
Two deadlines run in parallel, and they are set by what kind of regulated party you are.
| Regulated party | Report to police within | Report to the Minister within |
|---|---|---|
| Licence holder | 24 hours | 10 days |
| Pharmacist, practitioner, or hospital | Not required | 10 days |
| Registered or designated person | 24 hours | 72 hours |
Both clocks start on the date of discovery, defined as the day you became aware that a loss or theft had occurred. That date applies even when you only suspect it and the investigation is still open. If your standard operating procedure tells staff to file once the investigation closes, that procedure is wrong. Rewrite it this quarter.
Filing, amending, and retracting
The form goes to the Controlled Substances and Cannabis Branch, submitted by email as the preferred route. When the internal investigation finishes, you send the new detail as an amendment referencing the original submission date. If the cannabis turns up, you file a further amendment and the original report is retracted. Under section 37 of the Cannabis Regulations, the responsible person at your site is the official individual who owns the accuracy of what you sent.
One detail exporters miss: the loss or theft of a document is reportable too. A misplaced licence, registration certificate, import permit, or export permit gets reported to the same branch. Police notification is only mandatory for losses and thefts of cannabis itself, though Health Canada advises telling your local force about any reportable loss.
Ten days reads as generous until a Friday discovery meets a weekend and a carrier who takes six working days to answer an email. Treat the deadline as five.
Losses and thefts in transit
Transit is where responsibility gets argued about, and the rule is more definite than most supply agreements assume. The Canadian organisation sending, delivering, or transporting cannabis owns the product while it is in transit within Canada, until the recipient actually receives it. If the shipment goes missing before that handover, the sender files the report, names the transport company on the form, and attaches a summary of the carrier's own investigation.
After the chain of signature is complete, the position flips. A packaging error or shortage discovered by the receiver is reported by the receiver's official individual, because they discovered it. That single line settles most of the finger-pointing between a producer and a domestic distributor.
How this plays out on an export shipment
Picture a pallet leaving Montreal on a Monday under an export permit. The importer counts it in on the Thursday of the following week and comes up short against the packing list. Your clock did not start when the truck left. It started the day someone at your facility learned about the shortfall, and the police notification is due 24 hours after that, even though the product left Canadian soil days earlier.
Three records have to agree when that happens: the quantity on the export permit, the figure in your CTLS monthly report, and the weight that physically shipped. A gap between any two of them is usually how the discrepancy surfaces in the first place. Producers with tight batch traceability catch it during reconciliation. Everyone else hears about it from the importer, which is also how a shortfall turns into a rejected batch conversation.
Write the transit reporting duty into your supply agreements rather than discovering it mid-incident. The regulator does not care what your contract says. It asks who held the product.
What importers read into your loss record
Loss reporting exists to detect diversion. Canada is a party to the Single Convention on Narcotic Drugs and reports national loss and theft figures onward, with the International Narcotics Control Board mandated to keep controlled substances out of the illegal market. Your file is one line in that picture, and the buyers on the other side of an export permit know it.
Supplier qualification for the German, Australian, and Israeli medical channels tends to probe the same ground: who holds security clearance, how often you reconcile inventory, what your acceptable limits are per process step, and whether discrepancies get written up or explained away. A producer who can hand over two years of signed incident reports and a short, clean loss history is answering a due diligence question before it is asked.
The overlap with recalls
A discrepancy investigation and a recall often start from the same reconciliation. Product that cannot be accounted for raises a diversion question. Product that can be accounted for but failed specification raises a quality question. Same trigger, two different regulatory paths, and the documentation you built for one usually carries the other. Physical security changes are worth flagging here as well, since alterations to a site or to areas holding cannabis may need Health Canada approval before you implement them.
AlphaLeaf is a Health Canada Licensed Producer in Montreal, growing indoor, hand-trimmed flower from refined genetics. Our batch records, ISO/IEC 17025 test data, and export authorisation under the Cannabis Act are maintained to survive an outside auditor reading them cold, which is the standard EU and Australian medical importers hold a Canadian supplier to.
If you are qualifying a Canadian supplier this quarter, ask to see how inventory discrepancies get documented before you ask about price. Talk to our team and we will walk you through ours. Ask for the loss log. Read it.
Frequently Asked Questions
What is a reportable loss of cannabis under the Cannabis Act?
A reportable loss is one that cannot be explained on the basis of normally accepted operations or business activities. It includes unexplained inventory shortfalls, loss or theft in transit, unusual waste, packaging errors, and unexplained yield loss. Explainable events such as spillage or in-limit yield loss are not reported, but must be recorded in an incident report kept on site for two years.
How long does a Canadian licence holder have to report a cannabis loss or theft?
A licence holder must report to the police within 24 hours of the date of discovery and submit the report to the Minister within 10 days. Registered and designated persons report to police within 24 hours and to the Minister within 72 hours. Pharmacists, practitioners, and hospitals report to the Minister within 10 days and are not required to notify police.
Which form do Canadian producers use to report a cannabis loss or theft?
The Loss or Theft Report Form for Cannabis, form number CS-FRM-011, submitted to Health Canada's Controlled Substances and Cannabis Branch. Email is the preferred submission method. Later findings from an internal investigation are sent on the same form as an amendment referencing the original submission date.
Who reports a cannabis loss that happens in transit?
The Canadian organisation sending, delivering, or transporting the cannabis is responsible for it while in transit in Canada, until the recipient receives it, so the sender files the report. Once the chain of signature is complete, a shortage or packaging error found by the receiver is reported by the receiving party's official individual.
Does spilled or broken cannabis have to be reported to Health Canada?
No. Cannabis rendered unserviceable through spillage or breakage does not meet the definition of a reportable loss. It requires an incident report signed by the official individual and a witness, held on site for at least two years, listing the date, product name, THC and CBD concentration, quantity, and a summary of the incident.
Do international cannabis importers review a producer's loss and theft history?
Yes. Loss and theft data feeds the diversion statistics Canada reports internationally, and supplier qualification for medical channels such as Germany, Australia, and Israel commonly covers diversion controls, security clearance coverage, inventory reconciliation frequency, and how discrepancies are investigated and documented.
