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BC Supreme Court decision orders illegal marijuana dispensaries to shut down

As of October 17, 2018, all cannabis retail stores require a provincial licence to operate

"This decision reaffirms the City's authority over land use and our municipal business licensing for cannabis retail" says Kaye Krishna, General Manager, Development, Buildings and Licensing.

December 14 2018 –

The City of Vancouver is pleased with the BC Supreme Court decision today ordering all illegal marijuana dispensaries named in the suit to shut down.

In total, the City filed 53 injunctions against marijuana-related businesses operating outside City regulations, starting in April 2016 when enforcement action started. Some of the operators closed prior to the case being heard in court. The remaining 28 stores that participated in the test case will now have to cease operations or face court ordered fines, jail time, or both.

"This decision reaffirms the City's authority over land use and our municipal business licensing for cannabis retail, and confirms the regulatory regime introduced in 2015 was well within the City's jurisdiction to establish," says Kaye Krishna, General Manager, Development, Buildings and Licensing. "It also signals that any cannabis retail store operating outside City regulations can and will be enforced against using all the tools at the City's disposal to the fullest extent moving forward."

The BC Supreme Court decision also sets the precedent for future cases should an illegal operator file a challenge to an injunction.

Cannabis legalisation update

As of October 17, 2018, all cannabis retail stores require a provincial licence to operate in Vancouver, which is regulated and enforced by the BC Liquor and Cannabis Regulation Branch under the Cannabis Control and Licensing Act .

Vancouver operators also require a municipal development permit and a municipal business licence as they have been required to do since 2016.

The Province will forward applications they receive to the City for recommendation of approval. The City reviews those applications to determine whether to issue a recommendation. Those without a valid municipal development permit for cannabis retail use will not be considered. A recommendation from the City does not guarantee that the provincial licence will be granted.

Since September 19, the City has received notification from the Province of 14 Vancouver applications. The City has notified 10 of their next steps, and is currently reviewing the remaining four in order to provide them with their next steps. Of the 10 that have been notified, nine of those applicants have previously been issued development permits (land use approval), which is the first step that needs to be completed.

The City has issued four letters of recommendation to the province to date. When the provincial licence is granted, the operator can apply for a municipal business licence. As with all business licence applications, valid occupancy permits are required.

Businesses operating that do not have a Provincial licence, or have not applied for a Provincial licence to the City's knowledge, may be subject to provincial and municipal enforcement.

Enforcement background

From 2013 to 2015, the number of illegal marijuana-related (MMRU) businesses in Vancouver grew by 100% per year, and in the first six months of 2015 there was an increase from 60 to 100 businesses. If left unregulated, illegal dispensaries can pose a significant risk to public health and safety, particularly in youth.

While the City has no jurisdiction to regulate the sale of marijuana, it does have clear jurisdiction to regulate how and where businesses can operate.

In April 2016, the City introduced the medical marijuana-related use model. All existing dispensaries at that time were given until April 29, 2016 to cease operations or face enforcement action.

Thirty-one stores complied with City instructions to close before that deadline, and another 71 stores have since complied with regulations and have closed or are no longer selling marijuana.

On May 31, 2016, the first set of injunctions was filed against 17 MMRU retail businesses that remained open after the April 29 deadline. In total, the City issued 53 injunctions against illegal dispensaries, the majority of which agreed to a test case that was scheduled on September 4, 2018 before the BC Supreme Court.

To date the City has issued 3,713 tickets totaling close to $3 million against those operating outside the regulations.

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