By: Andrea Hill

A British Columbia court has rejected a constitutional claim by a dispensary against municipal licensing and zoning by-laws, ruling that a city may craft its by-laws so as to shut out dispensaries. Abbotsford (City) v. Mary Jane’s Glass & Gifts Ltd. featured a challenge by the owner of a chain of dispensaries to the refusal by the City of Abbotsford to officially recognize dispensary businesses.

Dispensaries are illegal under federal law.  The Access to Cannabis for Medical Purposes Regulations (the “ACMPR”), which govern the production and distribution of medical cannabis in Canada, only authorize distribution of cannabis by courier and do not allow for storefront sales of any kind.  However, some British Columbia cities, including Vancouver and Victoria, have begun issuing business licences to dispensaries and imposing corresponding zoning restrictions in an effort to control their proliferation.

In Abbotsford, the Supreme Court of British Columbia ruled that even though such neighbouring cities have issued business licences to dispensaries and incorporated dispensaries into their zoning plans, Abbotsford retained the right to refuse to follow suit.

The dispensary operator in Abbotsford argued that the city was precluded from regulating dispensaries because the federal government has enacted regulations governing the distribution of medical cannabis, an argument the Court rejected.  The Court noted that both the ACMPR and municipal zoning regulations prohibited dispensaries, and therefore it was simple to comply with both at the same time – by not operating a dispensary.

The Court distinguished between the “core of the federal law criminal power” – being the authority to create prohibitions accompanied by penal sanctions – from decisions about where and when cannabis may be sold.  Such decisions, the Court found, do not fall exclusively within the power of the federal government to determine, and therefore also may be regulated by other levels of government, including provinces and municipalities.  “The mere existence of federal legislation in a given field”, stated the Court, “does not oust provincial or municipal authority to regulate the same subject matter.”

This decision is interesting for its consideration of the relationship between federal laws governing medical cannabis and the dispensaries which defy them.

Although the decision is not binding on courts outside of British Columbia, it is significant for the Canadian cannabis industry because it is one of the first decisions to consider how jurisdiction over cannabis distribution and sale may be split between various levels of government.

A Canadian recreational cannabis regime, widely expected to be introduced in new legislation this spring, is anticipated to involve participation by both federal and provincial governments.  The Abbotsford decision supports the likelihood that questions of how and where to allow access to cannabis will fall within provincial and municipal jurisdiction.

Click here to view the full decision: http://canlii.org.

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Andrea Hill is a corporate and securities lawyer with SkyLaw Professional Corporation. Recognized as one of Canada’s leading legal experts in corporate cannabis law, Andrea is sought out by cannabis-oriented companies, their investors, and the media for her nuanced grasp of the cannabis regulatory landscape. She writes for the Globe and Mail on the business impact of changes to cannabis laws, and works with a broad variety of clients in the cannabis space, including publicly-listed licensed producers of marijuana, licence applicants, and ancillary businesses such as tech companies focused on the cannabis industry.

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