Under the Canadian Constitution Act, provinces have jurisdiction over property and civil rights. This includes all private law and commercial transactions, including local trades. The division of powers affirmatively answers the much asked question of whether or not recreational cannabis sales will be left to the provinces to regulate or not. Although we do not yet know how and what sales will look like until legislation comes out, we can look to see what certain provinces and municipalities are doing in advance of that to prepare. Specifically, if recreational retail looks anything like dispensaries, Vancouver’s regulatory framework will be a source of guidance for other provinces across Canada.
Vancouver, which has been clear in its goals to implement a regulatory framework, was the first city in Canada to issue a business license to a medical marijuana dispensary as of last May. Vancouver may issue permits for dispensaries, labelled as a Medical Marijuana Related Use (“MMRU”) business license. Immediately, 176 dispensaries applied.
Under Vancouver’s MMRU licensing regime, medical marijuana-related retail dealers operating for-profit must pay annual licensing fees of $30,000 within the City of Vancouver. Compassion clubs, which are defined as being owned by non-profit organizations that offer health services on site, have licensing fees of $1,000. The city’s MMRU licensing process zoned specific areas where businesses may apply for these business licenses. Restrictions include requirements that dispensaries are a 300-metre distance from schools, community centres and other dispensaries, among others. The Board of Variance will hear appeals from dispensaries that have their business license applications rejected based on rules such as these.
A newsworthy topic in Vancouver has been the regulation of edibles. The Vancouver Island Health Authority (“VIHA”) was left to regulate the sale of edibles. VIHA issued a ban from the sale of cannabis edible products, taking the position that the sale of edibles contravenes the BC Food Premises Regulation, as cannabis is not recognized as a food ingredient. Non-compliance with VIHA’s ban may impede the issuance of a business license for dispensary-applicants. If edibles are observed as being sold at facilities on site visits or otherwise, VIHA will issue violation tickets and other similar warnings. Similarly, in 27 cases, the City has filed injunctions against unlicensed dispensaries operating outside of the MMRU regime. These injunctions are going to be challenged in Court based on unconstitutionality principles.
Until the recreational legislation is released and the provinces decide concretely on how to regulate, Vancouver serves as an excellent case study of what works and what doesn’t. It is certain to be considered as other provinces and municipalities begin to consider and implement sales in the recreational cannabis market and broader industry.