Are the City of Victoria's marijuana regulations working?

And what will happen next summer when recreational cannabis becomes legal in Canada?

FOR THREE YEARS, Chris Zmuda soaked in the sweet smell of success wafting from his Downtown deli, the Taste of Europe, on Douglas Street. With the help of three employees, Zmuda happily served lunches made from the Polish recipes he acquired from his home country, and built a loyal group of customers eager to feast on kapuska soup and homemade pierogies.

But in March of last year, his deli turned into a cannabis sandwich thanks to the arrival of two marijuana dispensaries on either side of his business. They were 20 metres apart, even though City of Victoria regulations call for a distance of at least 400 metres between dispensaries. Only one of them has a license to operate legally.

The 1400 block of Douglas Street, just down the street from City Hall, where Chris Zmuda says his deli was squeezed out of business by the smell from nearby pot shops

It didn’t take long before Zmuda noticed a dramatic change in business. “The customers didn’t like it. People stopped coming because they smelled marijuana inside the store. My business went into the toilet,” said Zmuda, who approached the City numerous times about the bylaw infraction pertaining to the distance between the dispensaries.

The City has taken the unlicensed dispensary to court, but a decision has yet to be made on its future. In the meantime, Zmuda decided to move his business to a location on Yates Street. It’s a move he feels he shouldn’t have had to make. “I spent my life savings to invest in providing Victorians a unique kind of food and I worked hard to establish my business,” he said. “Now I am broke because of this situation.”

ZMUDA IS NOT ALONE among Downtown businesses and residents when it comes to being impacted by the area’s numerous medical marijuana dispensaries.

In order to get a handle on the number of medicinal dispensaries sprouting up in Victoria, the City developed and put cannabis regulations in place in November 2016, making it the first municipality on Vancouver Island to do so.

Under the regulations, businesses selling cannabis are required to go through a rezoning process, then apply for a $5000 business licence to operate legally. They also can’t be within 200 metres of a school, must be 400 metres from other permitted marijuana storefronts, and follow a number of other rules, such as no consumption on site. These rules or policies, with the exception of proximity to a school, can and have been waived by City council.

Following a 60-day grace period that allowed dispensaries time to adjust to the new regulations, the City announced it would take legal action against those who failed to comply. A year later, at least 32 marijuana dispensaries are now operating in the City of Victoria. Only seven of those have been approved for business licenses and another five are in the process of getting one.

According to the City, 39 rezoning applications have been submitted, but some of those are for new operations. So far council has approved 11 of those applications and 11 have been declined. Ten dispensaries have shut down, but some continue to ignore the rules, causing bylaw officers to hand out more than $135,000 in fines.

The City is currently taking court action against three dispensaries and recently won its first injunction when the BC Supreme Court sided with council’s decision to deny a rezoning application to the Green Dragon Medicinal Society, which is located 155 metres from the Chinese Public School.

Mayor Lisa Helps called the decision significant, noting it was the first time the City’s marijuana regulations were tested before the court. “Unless we have the legal authority of the court with an injunction, we feel we don’t have the grounds to shut them down,” said Helps. The City, she noted, is also looking at taking legal action against landlords who continue to lease space to dispensaries that won’t follow the rules.

Helps admits the process isn’t perfect, but she feels the City has the right framework and so far it seems to be working. In some cases, she said council can consider variances to the separation distance of 400 metres if the dispensaries are small in size.

The City’s main focus is on medicinal dispensaries that have come to council, been turned down, but continue to operate. Once the federal government officially makes recreational marijuana legal—expected in August—and the Province’s regulations around that legalization come into effect, Helps expects things will change dramatically.

THOUGH A LOT OF QUESTIONS REMAIN around the coming legalization, we do know that in BC, recreational marijuana will be  sold from both private and government-operated stand-alone retail stores where customers will need to be at least 19.

The BC Liquor Distribution Branch (LDB) will be the sole, wholesale distributor of non-medical cannabis for the Province while the Liquor Control and Licensing Branch will be given the responsibility to license and oversee private stores. An early registration process for those interested in applying for a cannabis retail licence will be launched this spring.

Helps is confident that when the Province becomes the wholesaler  and a provincial licence is needed to operate, that will make the shops that continue to ignore the City shut down right away. “The Province has way more of a hammer than we do,” she said. “I can’t wait until the rules come into effect. It would be like a liquor store being open without a provincial licence and selling liquor that people have made in their basement. It’s unthinkable.”

But it may not be as simple or as clearly a provincial matter as Helps suggests.

The Province won’t cap the number of retail licences available and a license won’t be issued without the support of local governments, which have the authority to make decisions based on the needs of their communities, so city councils will still be involved.

Moreover, the status of the current “medicinal” retailers is still a bit murky. The federal government has said it will be reviewing the medicinal cannabis system within five years. A Health Canada spokesperson recently told CTV News it will be up to the provinces to decide whether to licence medical cannabis dispensaries separately from recreational stores. A BC government spokesperson told Focus that at this time, all dispensaries are being treated the same.

Alex Robb, director and general manager of Trees Dispensary, which became the first cannabis retailer to be rezoned under the City of Victoria’s new rules, said there’s a grey area that hasn’t been covered by either the federal or provincial government’s legalization plan.

Trees began as a medical cannabis storefront, but has decided to proceed with the provincial licencing framework over fears it could be shut down. “There’s a lot to lose if we were to try and go against the system even though we disagree with some of what’s included in the planned legalization. In some ways we are more vulnerable than when we started,” said Robb, who believes, like Helps, that the Province will have additional enforcement tools. “It’s a difficult and stressful time to continue to be activists working to provide access for people [with medical needs] when there’s a framework being created that we can retail cannabis to the population at large.”

Some of the city’s medicinal pot shops have a large and loyal network of supporters, like the Victoria Cannabis Buyers Club, which has been operating at its current location at 818-826 Johnson Street for almost 17 years. The organization, unlike most of the cannabis shops, has a consumption lounge on site; it had been granted an exemption to an on-site consumption ban in 2016.

In January it went through a public hearing for a rezoning application at which numerous supporters turned up. Even though there are two approved dispensaries already operating within 400 metres, it was approved by City council. Most councillors cited the Cannabis Buyers Club’s longevity and that it had gone unnoticed for many years to justify their support for it, despite the proximity to other cannabis shops.

The outcome, however, wasn’t without its detractors. One woman, who lives in a new condo building near the Cannabis Buyers Club and rents space for an art studio next to it, told council, “I don’t want to debate the ethics of cannabis, however, I think this location is different because the smell is atrocious outside and inside the building. It makes it very difficult for me to take people in [the studio].”

VICTORIA POLICE, although they monitor the pot shops, won’t get involved unless they believe they are contributing to violent crime or seriously disrupting the surrounding community.

Police Chief Del Manak said the current medicinal dispensaries become a priority only when officers receive information that organized crime is involved, if they’re dealing to youth, if they’re disruptive to the public peace, or if it’s advertised that clients don’t need a medical reason to purchase the drug.

“The operation of a storefront cannabis retail business is contrary to federal law and is therefore subject to investigation and prosecution at any time,” said Manak. “However, given the unusual circumstances surrounding access to cannabis, including various court decisions regarding access to ‘medical’ cannabis and the federal government’s stated commitment to the legalization of non-medical cannabis, the Victoria Police Department has determined that at a strategic level, our approach to enforcement of cannabis storefront operations will take a variety of factors into account.”

In January 2017, police raided Remedy Medicinals on Fisgard Street after 30 pounds of marijuana was discovered on a Helijet flight a few weeks earlier. The 23-year-old owner of the dispensary was later charged with possession of a controlled substance for the purpose of trafficking. Police cited the transport via commercial aircraft as a concern that potentially put the public, passengers, and crew at risk.

Chris Zmuda could be forgiven for pointing out that many of the current shops contain enough cannabis to put neighbouring businesses at risk. With his Taste of Europe now on Yates Street, he doesn’t have any cannabis shops in his building—or even the same block. Yet. But who knows what will happen after the coming legalization of recreational cannabis.

A journalist since 2003, Pamela has spent the bulk of her career covering court and crime for various newspapers in western Canada, including the Regina Leader-Post and the Edmonton Sun. An avid traveller, Pamela also specializes in travel writing and recently published a true crime book, Deadmonton.