April 26, 2017

Cannabis Legalization: Weeding Out the Regulations

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As the Federal Government recently introduced its legislation to legalize and regulate recreational cannabis, it is clear that legalization is now imminent. This raises a number of questions: What will this system look like? Who will be able to sell these products, and to whom? Where will these products be sold? Will the legislation effectively drive out criminal elements or will the illegal sale of weed continue, presenting continued challenges for police services? What will this mean for municipalities?

Many of these questions will be answered through regulation at the Federal and Provincial level, however local government will have an important role to play too. Issues of zoning, development permits, and licensing for storefronts will need to be addressed. The sooner local governments begin to consider these issues, the better prepared they will be when the time comes to regulate at the municipal level. 

The Task Force on Cannabis Legalization and Regulation recently released its “Framework for the Legalization and Regulation of Cannabis in Canada”. Their mandate was to provide advice on the design of a new legislative and regulatory framework for legal access to cannabis, consistent with the Government’s commitment to “legalize, regulate, and restrict access” to marijuana. The new legislation reflects many of the recommendations outlined in the Framework.

Under the new legislation, provinces will regulate the retail distribution of cannabis. The Task Force recognized in its Framework the importance of engaging with municipal governments in implementing some of its recommendations. In particular, they recommend that provinces work closely with municipalities in regulating retail sales of cannabis products. They also recommend jurisdictions extend current restrictions on public smoking of tobacco products to cannabis products, and permit dedicated places to consume cannabis if they wish.

The storefronts envisioned by the Task Force are dedicated stores, avoiding co-location with alcohol or tobacco sales wherever possible. The recommendations include the use of legislation and bylaws to regulate the density of storefronts, and to ensure storefronts are a sufficient distance from schools, parks, community centres, etc.

In 2015, Vancouver City Council developed and approved a bylaw regulating and licensing medical marijuana dispensaries, despite storefronts being illegal under Federal laws at the time. The city became the first city in Canada to regulate medical marijuana retailers. The bylaw reflects a number of the recommendations which have since been made by the Task Force. Under the bylaw, businesses require a licence at a fee of $30,000. The businesses are required to be at least 300 metres from schools, community centres, neighbourhood houses, youth facilities, as well as other marijuana related businesses to control density. Further, the development permit includes a process to notify the community of the store. 

Vancouver decided to adopt the regulations due to the explosion of marijuana-related businesses that occurred from 2013 – 2015. There was a lack of a clear and transparent regulatory framework from the Federal Government with respect to such businesses, and a clear need for regulation.

The Council looked to Colorado and Washington State for guidance in developing its regulations. In 2012, they became the first two US states to legalize the personal possession and retail sale of cannabis. This required developing a comprehensive regulatory framework to take cannabis from a criminal prohibition to retail sales.

Washington State took measures to control both the density of stores as well as proximity to schools, parks etc. by refusing to issue a licence for any business within 1,000 feet of such establishments. At the municipal level, Seattle City Council adopted legislation which puts limits on where larger-scale marijuana activities, including the processing, selling, or delivery of marijuana products can occur in Seattle.

In Colorado, local governments have the opportunity to prohibit or place limits on the medical or retail sale of marijuana, including the number and location of businesses and hours of operation. There is optional licensing at the local level for retail sales. The City of Boulder has requirements for licenses, and has limits on the location of such businesses. No recreational marijuana business may operate in residential zone districts or in buildings with residences. Further, a license will be refused if the business is within 1,000 feet of a school, or within 500 feet of three other marijuana businesses.

It’s time for municipalities throughout Atlantic Canada to start thinking about what legal cannabis sales will look like at the local level. The Task Force recommendations and precedents from other jurisdictions make it clear that local governments will need to contemplate limitations on the location and number of storefronts and other community related factors. This will require further review of what has and hasn’t worked in other jurisdictions, and engaging with the community to meet local needs and expectations going forward.

Kevin Latimer, Q.C., is a partner in the Halifax office of Cox & Palmer, and counsel to UNSM. He practices in the areas of municipal and planning law, administrative law, and public law litigation and can be reached at 902-491-4212 or e-mail at coxandpalmer.com.

Contributions by Brittany Larsen, Articled Clerk.

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