Environmental and building due diligence for BC facilities

Updated September 2026 · General information, not legal or tax advice

The short answer

Before buying, lending on or re-leasing a cannabis or commercial facility in BC, check five things: whether the site's past uses trigger a Site Disclosure Statement under the Environmental Management Act; what an environmental site assessment shows; how chemicals, pesticides and wastewater were handled; whether water use is properly licensed; and whether the building, electrical, gas and fire-safety work was permitted and inspected. Gaps in any of these can delay a sale, a licence or a new tenancy, and some carry cleanup costs.

This page is general information. Environmental and building questions depend on the specific site; qualified environmental consultants, engineers and a BC lawyer should be involved in any transaction.

Site Disclosure Statements and Schedule 2 activities

BC's contaminated sites regime uses a Site Disclosure Statement (SDS) to flag properties that may be contaminated. The province says an SDS is needed when a site has been used for one of the industrial or commercial activities listed in Schedule 2 of the Contaminated Sites Regulation and a trigger event occurs (Government of BC).

Trigger events

• Selling the property. The SDS goes to the prospective buyer, not the ministry.
• Applying to a municipality or approving officer for zoning, development, building or subdivision approval. The local government forwards it to the ministry.
• Decommissioning or ceasing operations. The SDS goes to the ministry within 6 months.
• Insolvency, bankruptcy, foreclosure or receivership.
• An order from a director.

(Government of BC). A Miller Thomson bulletin on the February 2021 amendments describes the ceasing-operations trigger as applying after operations stop for 12 months, and the insolvency trigger as applying within 90 days of filing a proposal or seeking creditor protection (Miller Thomson). Some sites are exempt under Division 3 of the regulation, although a municipality may still ask for an SDS (Government of BC). The province's Site Registry can be searched for past records on a property.

Schedule 2 items relevant to cannabis and commercial buildings

Growing cannabis is not itself listed in Schedule 2. But activities that often happen at cultivation, processing and other commercial sites are, including (Contaminated Sites Regulation, Schedule 2):

• chemical, fertilizer or pesticide bulk storage (A2, A5, A12);
• medical, chemical, radiological or biological laboratories (E5);
• appliance, equipment or engine maintenance and repair (E1);
• petroleum product storage in non-mobile above-ground or underground tanks, except above-ground tanks for emergency generators or with secondary containment (F7);
• solvent manufacturing or bulk storage (F10); and
• hazardous waste storage, treatment or disposal (H18).

Whether a particular facility's storage counts as "bulk" or falls within an exemption is a technical and legal question. For tenant departures, see tenant exit and decommissioning.

Phase I and Phase II environmental site assessments

A Phase I environmental site assessment gathers and interprets information about a site's history and condition without sampling. CSA Group's standard CSA Z768-01 sets a framework and minimum requirements for Phase I assessments in Canada, and states that measuring, sampling and analysis fall under Phase II work (CSA Group). If a Phase I identifies concerns, a Phase II samples soil, groundwater or other media. Buyers and lenders can use these reports to decide whether to proceed and on what terms. For former cannabis sites, a consultant would typically look at fuel tanks for generators and boilers, chemical and fertilizer storage rooms, extraction areas, laboratories, floor drains and sumps, septic fields, and waste storage and composting areas.

Chemicals, pesticides and wastewater

Licensed cannabis producers may use only pest control products approved for use on cannabis (Health Canada). For due diligence, the question is less about product approval than about what was stored on site, how, and how it was disposed of.

BC's Ministry of Environment sets out several points for cannabis operations (BC Ministry of Environment – Cannabis waste management fact sheet):

• Liquid wastes, including leachate and fertigation water, must not be discharged to the environment without a valid authorization. Discharge to a municipal sewer is an option only if the waste meets municipal effluent standards.
• Installing a wastewater treatment system requires Director approval under the Code of Practice for Agricultural Environmental Management before construction.
• Processing facilities require a waste discharge permit under the Environmental Management Act for air emissions and solid or liquid waste from processing.
• Extraction with solvents such as ethanol, butane or propane may produce hazardous waste, and the operator is responsible for classifying and disposing of it properly.

A buyer or landlord can ask for copies of any waste discharge authorizations, sewer use permits, hazardous waste manifests and disposal records, and should confirm that chemical inventories were removed when operations stopped.

Water licences and groundwater

Under BC's Water Sustainability Act, anyone diverting and using groundwater for non-domestic purposes, including irrigation, commercial or industrial use, must have a water licence. The Act took effect February 29, 2016. Existing non-domestic users had until March 1, 2022 to apply and keep a priority date based on when they began using the water. Those who missed the deadline are treated as new applicants, with a junior priority date, and cannot lawfully use the water until licensed (Government of BC – Requirements for groundwater users). The province also states that cannabis operations drawing water from a stream or aquifer must first obtain a water authorization (Government of BC – Environmental management for the cannabis industry).

For a well-supplied facility, ask for the water licence, its authorized volume and purpose, and evidence that annual rentals are paid. A licence tied to one purpose may not cover a different future use.

Building, electrical, gas and fire safety

Building permits and occupancy

Local governments issue building permits and final occupancy approvals. The BC Building Code 2024 applies to building permits applied for from March 8, 2024; the City of Vancouver has its own building bylaw (Government of BC). Key questions: were all buildings and additions permitted and given final inspection or occupancy; what occupancy classification was the building approved for; and would the buyer's intended use need a change of occupancy, with code upgrades that come with it? Health Canada expects licence applicants to comply with local building permits, electrical and fire safety rules (Health Canada).

Electrical and other regulated equipment

In most of BC, electrical installation permits are issued by Technical Safety BC, and for commercial work a licensed electrical contractor with a named field safety representative must obtain the permit. Burnaby, Maple Ridge, North Vancouver, Surrey, Victoria, Vancouver and West Vancouver run their own permitting (Technical Safety BC – Electrical installation permits). An electrical operating permit is required in cases including equipment with a rated service capacity over 250 kVA, supply over 750 volts, equipment in hazardous locations, and fire alarm or emergency systems; Technical Safety BC lists greenhouses and manufacturing facilities among the facility types that typically need one (Technical Safety BC – Electrical operating permits). Technical Safety BC also regulates gas, boilers and pressure vessels, and refrigeration (Technical Safety BC), all common in grow and processing facilities.

Fire code and extraction

The BC Fire Code 2024 adopts the National Fire Code with BC amendments, and the province does not publish a consolidated version (Government of BC – BC Fire Code). Division B of the National Fire Code includes Part 4, Flammable and Combustible Liquids, and Part 5, Hazardous Processes and Operations (National Fire Code of Canada 2020), which are the parts most relevant to solvent storage and extraction rooms. Ask for fire inspection reports, extraction equipment certifications and any engineering sign-off for hazardous-location electrical work.

Mould and moisture

Grow rooms run at high humidity, and buildings left idle after a grower leaves can develop condensation, mould and corrosion, particularly if HVAC was shut off. A building inspection should look at wall and ceiling assemblies, insulation, roof penetrations, drains and ductwork. If mould is found, a qualified assessor can advise on the scope of remediation.

Due diligence checklist

• Site history and SDSList past uses against Schedule 2, ask whether an SDS applies, and search the Site Registry.
• Phase I ESAOrder a Phase I to CSA Z768-01, and a Phase II if it recommends one.
• Tanks and storageLocate fuel tanks, chemical rooms, solvent storage and waste areas; confirm secondary containment.
• Waste and wastewater recordsObtain discharge authorizations, sewer permits and hazardous waste disposal records.
• Water licenceConfirm any groundwater or surface water licence, its purpose and volume, and rental payments.
• Building permits and occupancyConfirm permits and final inspections for every structure and addition.
• Electrical and gasGet permit history and any operating permits from Technical Safety BC or the municipality.
• Fire safetyReview fire inspections, sprinkler and alarm records, and extraction room approvals.
• Moisture and mouldCommission a building condition assessment, especially for vacant facilities.
• Zoning and ALRConfirm the intended use is permitted; see zoning in BC.

How Sean can help

Sean Phillips, REALTOR® with Coldwell Banker Executives Realty, sells cannabis and commercial buildings across BC and has worked on Health Canada licence applications since 2014 as an independent site-evidence and licensing-readiness consultant. He offers a paid pre-purchase site audit and other consulting, quoted per site, to help buyers and lenders identify what to ask environmental consultants, engineers and inspectors. For sellers, organizing these records before listing can make a sale smoother; see selling a cannabis grow facility or contact Sean.