Many business owners and entrepreneurs in the Cannabis Industry believe that their work is not eligible for Scientific Research & Experimental Development (SR&ED) funding. In their view, they only follow standard procedures and do neither basic research, applied research, nor experimental development. However, when an SR&ED advisor with experience in the field of Cannabis carefully examines the processes and activities, it is very likely he can select eligible SR&ED projects.
The Cannabis Industry is currently in its infancy in Canada and worldwide; therefore, open-source information related to the field is inadequate and sometimes contradictory. Therefore, SR&ED can be found in nearly every area of the company’s operations, making the company qualified for cash refunds for expenses on wages, consumed materials, and subcontractors, including testing labs.
Here are some examples of such projects.
Equipment customization and automation
A frequent issue with equipment vendors is the guarantee that the product will work within your companies given specs. How many times after purchasing the product does your business have to customize the product for any reason – reprogram, code, rebuild, develop algorithms, etc.? If the issue is not solved on the first attempt but requires an iterative approach, all this work is probably SR&ED eligible.
Growing Plants
There are several SR&ED project types that can be found in growth rooms. A common but sometimes ignored example is when you try to bridge connections between any growing condition (soil, light, humidity, nutrients, and so on) and the resulting product quality (yield, potency, terpenes profile). Of course, the eligible work is not restricted to this.
The plants have several development stages, and there are many different lines and breeds of plants with various properties. Each growth stage, each genetic variation, needs somewhat different growth conditions. When you apply conditions that work well for one plant type to another, plant properties will probably not be the same. If you try to optimize growth ways to customize them, it is very likely there is SR&ED to claim.
Cannabis ProductsSince the domain is still in its infancy, but the public interest is very high, there is a demand for Cannabis products, which needs new methods and processes to be developed. The most common examples across the field of such processes are winterization, decarboxylation, oil extraction with supercritical carbon dioxide, its distillation, topical and edible products preparation, and much more. All of them are novel, and most likely, when you try to develop such novel products or methods, you do SR&ED eligible work. There is also SR&ED eligibility in non-high-tech investigations and development. Sometimes even simple grinding, trimming, drying, and packing the plants and the buds can be improved. One has to be innovative to optimize the process and to avoid losses. Such activities can be considered SR&ED eligible.