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Marihuana Dispensaries

Marihuana Dispensaries. Don Lidstone, Q.C. Lidstone & Company Barristers and Solicitors AKBLG Annual Conference June 16, 2016. Overview. Legal Status of Dispensaries and Marihuana possession/production generally Enforcement/Regulatory options Criminal law Business Licensing Zoning

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Marihuana Dispensaries

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  1. Marihuana Dispensaries Don Lidstone, Q.C. Lidstone & Company Barristers and Solicitors AKBLGAnnual Conference June 16, 2016

  2. Overview • Legal Status of Dispensaries and Marihuana possession/production generally • Enforcement/Regulatory options • Criminal law • Business Licensing • Zoning • Mechanics of enforcement • Tips and Tricks

  3. Legality of Marihuana Dispensaries • They’re not! • Controlled Drugs and Substances Act: Possession of substance 4. (1) Except as authorized under the regulations, no person shall possess a substance included in Schedule I, II or III. • Cannabis, including marihuana, is a Schedule II substance • Only lawful access to marihuana at present is by way of the MMARs or MMPRs

  4. MMARs • Enacted in 2001 • MMARs allow for production/possession as follows: • ATPs: authorization to possess • PPLs: personal-use production licence • DPLs: designated-person production licence • Only at the production site and area authorized in the licence (including residences) • No provision for retail sale in the MMARs

  5. MMPRs • In force in July 2013 • Existing ATPs, PPLs, DPLs to expire March 31, 2014 • Then, commercial producers licensed under MMPRs may distribute to authorized users via: • secure shipping (primary mechanism); or • pharmacist, authorized health care practitioner, hospital (purchased from licensed producer: “Authorized Distributor”) • No provision for retail sale

  6. Constitutional Challenge to the MMPRs: Allard v. Canada • Federal Court decision March 21, 2014 • Interlocutory Injunction granted • Effect: • people with ATPs, PPLs or DPLs granted under the MMARs may continue to use those pending determination of constitutionality of MMPR regime

  7. Allard round 2 • Federal Court decision February 24, 2016 • MMPR’s: no force and effect (infringe constitutional rights medical marihuana users) • Declaration suspended 6 months enable Feds to adopt new regs • Justice Manson order of March 21, 2014, preserving rights under the MMAR regime, remains in effect • Feds not appealing

  8. Current state of the law • Until earlier of new fed regsor August 24, 2016 • legal to possess marihuana pursuant to an MMAR licence • legal to possess marihuana pursuant to an MMPR licence or authorization • Neither MMARs nor MMPRs permit retail sale of marihuana. • Dispensary business selling marihuana from store front operating contrary to Controlled Drugs and Substances Actand unlawful

  9. Enforcement/Regulation 1. Criminal Law: • Police raids - Examples: • April 2015: Parksville • July 2015: Edmonton • January 2016: Toronto • April 2016: Campbell River, Chilliwack x 2 • Police warnings- “voluntary closure” in Grand Forks

  10. Health Minister Jane Philpott delivered an impassioned speech at a UN special session on drugs on Wednesday, where she announced Canada will introduce legislation next spring to spark the process of legalizing and regulating marijuana. … Liberals to unveil marijuana legislation next year United Nations — The Canadian Press Published Wednesday, Apr. 20, 2016 10:49AM EDT

  11. Enforcement/Regulation (cont’d) 2. Business Licensing Regime • Many business licence bylaws already prohibit the licensing of dispensaries • Require compliance with all applicable regulatory requirements (including federal) and proof of applicable certifications, approvals • Provisions like these in bylaws can enable the refusal of licences for dispensaries (for now) • Dispensaries operating without licences can be subject to enforcement

  12. Abbotsford (City) v. Weeds Glass & Gifts Ltd., 2016 BCSC 135 • Facts: • Dispensary applied for business licence, City because dispensary not comply with B/L bylaw. Dispensary opened, operational despite warnings/ demand letters • City sought injunction • Ruling: • Injunction issued. City had established breach of B/L bylaw. No extraordinary circumstances warranted refusal of injunction • Dispensary closed since order took effect • Appeal filed (but stay of order refused)

  13. Enforcement/Regulation (cont’d) 3. Business Licensing Regime - Vancouver • Requirements to operate: • DP and a B/L • In a commercial zone • At least 300m from schools, community centers, neighbourhood houses, youth facilities that serve vulnerable youth, other marihuana-related businesses • Fee – B/L fee for compassion clubs is $1,000, $30,000 for medical marihuana retail dealers • Sign good-neighbour agreement

  14. Enforcement/Regulation (cont’d) • Current Practical Reality in Vancouver • More than 100 dispensaries without required permits • Up to 40 dispensaries being licensed • City had a ‘grace’ period for all dispensaries which expired end of April 2016 • Started ticketing in May (violators face fines up to $750)

  15. Three large jars full of marijuana buds sits on the counter at VanCity Weed, a Robson Street dispensary that plans to stay open beyond a Vancouver city deadline. (Rafferty Baker/CBC) Deadline looms for 100-plus pot shops while 100s more line up to open Marijuana dispensaries in violation of new city bylaws must close by Friday or face fines CBC News Posted: Apr 26, 2016 8:09 PM PT Last Updated: Apr 26, 2016 9:11 PM PT

  16. Enforcement/Regulation (cont’d) Business Licensing Regime • Limitation: statutory power to regulate business not include the power to prohibit (most) business • Prince George (City) v. Payne, [1978] 1 S.C.R. 458 • Common Exchange Ltd. et al v. City of Langley, 2000 BCSC 1724 • Once marihuana legalized (if retail sale of marihuana also legalized), business licence bylaws may be rendered ineffective as a means of precluding dispensaries

  17. Enforcement/Regulation (cont’d) 3. Use of Zoning Powers • power to zone includes power to prohibit any use • Courts have upheld prohibitions on body rub parlours, casinos, pawn shops • Constraints • Conflict with federal law (not likely problem as long as marihuana illegal) • Constitutional rights of users (complete ban on dispensaries throughout every zone may impermissibly interfere with rights of users)

  18. Mechanics of Enforcement • Tickets, bylaw notices • Statutory injunction: s. 274 of the Community Charter • once prove breach of the bylaw, will almost always be granted • Civil burden of proof, faster process • Can be costly • Offence Act prosecution • Quasi criminal, can impose punitive fines • Higher burden, trial with live witnesses, resource intensive

  19. Tips and Tricks - Bylaws • Business licence bylaws should: • broadly define business • require business licence even if a dispensary is operated by a society or on non-profit basis • Zoning Bylaws should: • broadly define and prohibit marihuana operations • particularly until the new federal regime • tailor zoning thereafter

  20. Tips and Tricks – Bylaws (cont’d) • Both Business and Zoning Bylaws should: • require dispensaries to comply with all applicable bylaws as well as provincial and federal laws • Section 15(2) of the Community Charter enables municipalities to adopt provincial or national requirements • Provide each day of violation is separate offence • be designated as enforceable by bylaw notice and ticket with significant fines (max $500, $1000)

  21. Tips and Tricks – Enforcement • To shut down dispensaries: • Progressive enforcement (warnings, demand letter, tickets/BON’s, then injunction) • Issue tickets/BON’s to landlords • Successful in Abbotsford • Each owner can be fined separately R. v. Morshedian and Janani, 2015 BCPC 368

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