Storefront Marihuana Dispensaries: Failed Constitutional Challenge

In the case of Abbotsford (City) v. Mary Jane’s Glass & Gifts Ltd., the Supreme Court of British Columbia granted two declarations sought by the City of Abbotsford, and ruled that the operators of Mary Jane’s Glass & Gifts Ltd. were in breach of the City of Abbotsford’s Business License Bylaw and Zoning Bylaw.

Further, the Court found that the City’s Business License and Zoning Bylaws are constitutionally valid and do not unjustly infringe Section 7 (life, liberty and security of person) or Section 15 (equality rights) of the Charter of Rights and Freedoms.

The decision in this case is not surprising.  It confirms the basic assumption that storefronts selling marihuana for any purpose are illegal.  The federal laws in place related to access to marihuana for medical purposes do not authorize retail marihuana dispensaries.

Mary Jane’s Glass & Gifts Ltd. (the “Company”) operated a retail store selling cannabis and cannabis products in the City of Abbotsford.

The Company applied for a business license and in the first instance described the business as “medical cannabis retailer”.  This application was later withdrawn by the Company.  The Company then submitted a second business application for “retail sale of glass products and gifts”.

The City of Abbotsford Business License Inspector refused to issue the business license for the medical cannabis retailer use and the company did not request reconsideration of that decision.

Apparently, based on inspections of the premises, City of Abbotsford Bylaw Enforcement staff observed the operation of a medical marihuana dispensary.  No business licenses were issued to the Company for this operation.

The property from which the Company operated is located in the C-5 zone under the City of Abbotsford’s Zoning Bylaw.  This zone does not permit the retail sale of cannabis or cannabis products or any related uses.  This would be expected, since the retail sale of marihuana from a storefront is illegal under federal law.

Section 140.3 of the Zoning Bylaw specifically prohibited “cultivating, growing, producing, packaging, storing, distributing, dispensing, trading or selling of cannabis in any zone unless specifically provided for in that zone”.

Medical marihuana production is a permitted use in the agricultural zones contained in the City of Abbotsford’s Zoning Bylaw.  “Medical marihuana production facility” is defined as:

“means the use of a building for the production, selling, providing, shipping, delivery or destroying of cannabis (including marihuana) authorized by a valve license issued pursuant to the Federal Marihuana for Medical Purposes Regulation, as amended or replaced from time to time”.

Based on these facts, the Court determined that the the Company and its operators were in breach of the Business License Bylaw and the Zoning Bylaw.  The City was granted injunctions restraining the Company and the Respondent, Briere, from carrying on business in contravention of the Business License; operating a business without a business license; and conducting a use contrary to the zoning.

In deciding that the Zoning and Business License Bylaw did not unjustly infringe Sections 7 and 15 of the Charter of Rights and Freedoms, the Court accepted the arguments advanced by the Attorney General in relation to the constitutional challenge. The Court determined that the pith and substance of the Zoning Bylaw is the regulation of land and building use and that this class of subject properly fits within the provincial heads of power under Section 92(13) – Property and Civil Rights – and Section 92(16) – Matters of a Merely Local or Private Nature – of the Constitution Act, 1867.

The Court commented that criminal law is under federal jurisdiction; however, there is no exclusive federal jurisdiction to regulate marihuana cultivation, and distribution or sales.

The Court relied on the Supreme Court of Canada decision in Chaterjee v. Ontario (AG), 2009 SCC 19, in concluding that although there may be some degree of overlap between provincial and federal matters, a provincial law will not be invalidated because of an incidental intrusion into criminal law.  In this case, the dominant feature of the Zoning Bylaw related to land use and community planning rather than criminal sanction.  There was no evidence that by prohibiting the operation of marihuana dispensaries in the C-5 zone, the City sought to enact criminal law.

The Court pointed out that the Zoning Bylaw does not restrict access to medical marihuana since, under the federal law, medical marihuana is not available through retail dispensaries.  The Court accepts the Attorney General’s argument, following the test in Quebec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39 – does the provincial law impair the exercise of the core federal competence?  How and where medical marihuana may be sold is not analogous to a previously recognized core of federal jurisdiction and consequently the doctrine of interjurisdictional immunity did not apply.

On the second branch of paramountcy, in which dual compliance is possible but where the provincial law is incompatible with the purpose of the federal legislation, the Court found that in order for federal law to be paramount to provincial law under this dual compliance scenario, the purpose of the federal law must be frustrated.  And the test is high:

“Permissive federal legislation, without more, will not establish that a federal purpose is frustrated when provincial legislation restricts the scope of the federal permission”.

The finding of the Court on this constitutional issue is not remarkable.  There is no issue of paramountcy because the federal law does not permit storefront marihuana dispensaries.  The Access to Cannabis for Medical Purposes Regulations does not make marihuana available through retail dispensaries and therefore the provincial law does not conflict with any federal law or specific federal purpose.

It is yet to be seen how the federal government may or may not amend its legislation in respect of the sale of marihuana on a retail basis.  In the event the federal legislation allows for storefront retail sale of marihuana, it is unlikely that the new federal law would dictate where marihuana might be sold on a retail basis.  As we have suggested previously, in respect of medical marihuana production facilities, if a local government were to prohibit that use entirely, a Charter challenge may have greater traction.

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