While some have questioned the legality of municipalities like Vancouver and Victoria regulating illegal marijuana dispensaries, there is already a precedent in place for the issuing of business licenses and ‘regulation’ or at least allowance of illegal practices in various Canadian cities.

When it comes to federal prohibition of certain activities, some municipalities have a history of circumventing the rules. Indeed, sex parlours, head shops, needle exchange programs (NEPs), and even illicit supervised injection sites exist in Canadian cities. Now, the proliferation of cannabis dispensaries has become the only latest trend in civic insubordination.

In this article, I examine those non-cannabis entities that survive via municipal shielding from federal enforcement. In the context of dispensaries, the objective is to illustrate that it’s not uncommon for local governments to shape policy that is outside of their jurisdiction, either through regulation or non-enforcement.

Needle Exchange Programs

There is an indication that NEPs violate provisions of the Controlled Drugs and Substances Act (CDSA) and the Criminal Code. Under these Acts, it is unlawful to possess any object or paraphernalia that contains a controlled substance or is intended to be used for putting such substances into the human body.

These laws create legal risks for needle providing staff and drug users who seek syringe exchanges. But this didn’t stop the very first programs from opening unofficially in Toronto in 1987, and then officially in Vancouver and Toronto in 1989. Furthermore, although the laws have not changed, NEPs now receive funding at all levels of government.

Sex Parlours

Under federal law, prostitution is not illegal. However, within the Criminal Code, numerous residual activities are illicit, making it very difficult to participate without committing a crime. The illegal activities include: living off the avails of prostitution, operating a bawdy house, and public communication for the purpose of payment for a sexual service.

Despite these rules, it looks as though not all cities abide by them. For instance, in Vancouver, there are two types of business licenses that seemingly aim to evade the Criminal Code provisions; escort services and body rub parlours.

While the bylaws for such businesses do not explicitly permit sexual interactions, there are many aspects that appear to imply permissibility. First off, there are separate licence categories for dating services and escort services. Regarding the latter, escorts must be at least 19 years old, while no specific age is mentioned for dating service employees. Additionally, employee and patron names must be recorded for dating services. Meanwhile, only the employee name is required for escort services, which is probably an incentive, and cue, for patrons who want to choose the service that is going to include sexual transactions. If this isn’t the case, then why bother having the separate licensing class for escort services?

The bylaw definition for “body rub” in Vancouver “includes the manipulating, touching or stimulating by any means, of a person’s body or part thereof, but does not include medical, therapeutic or cosmetic massage treatment given by a person duly licensed.” So, as you can see, the “body rub” description not only implies sexual contact is allowed, but it also separates body rub parlours from licensed health services that involve bodily contact.

Head Shops

Stores that sell paraphernalia, such as bongs, pipes, and vaporizers are also operating in a grey area. Under the Criminal Code (section 462.2) it is illegal to sell those items to people who will use them to consume controlled substances. However, because the products can also be utilized for legal drugs, like tobacco, it can be difficult to prove that head shops are breaking the law. This uncertainty is what allows such enterprises to flourish despite the legal risks involved.

Supervised Injection Sites

Insite, which opened in 2003 in Vancouver, is the first and only legal supervised injection site in North America. The facility is allowed to operate under an exemption to the CDSA, which is granted by Health Canada. Operational oversight and funding is handled by Vancouver Coastal Health.

The benefits of Insite are well-documented. These include: fewer overdose deaths, reduced disease transmission, promotion of addiction treatment services, and lowered health care costs.  Considering those results, it is surprising that Insite is the only legal supervised injection site around.

What isn’t surprising, then, is that illegal sites open up from time to time to fill the void, such as those that have been introduced by the Vancouver Area Network of Drug Users (VANDU). Without a CDSA exemption, VANDU runs their sites covertly, typically in undisclosed locations in the downtown eastside neighbourhood of Vancouver. The operations sometimes carry on for months before being shut down by police. Yet the organization continues to open new sites, with their rationale being that Insite alone lacks the capacity to serve the entire community.

So, although VANDU’s efforts are not sanctioned, given that the organization endures and repeatedly defies laws for extended periods, it seems the city does, to some degree, tolerate their actions.

Final Comments

When it comes to federal prohibition of certain activities, some municipalities have a history of circumventing the rules. With respect to dispensaries, Vancouver has already begun a licensing process, and Victoria appears to be on the cusp of doing the same. In Toronto, where council has not signified any plan to follow suit, the number of dispensaries has risen from about 12 to 60 in under a year, which illustrates a significant tolerance for businesses that are otherwise illegal.

As Vancouver transitions from a landscape of non-enforcement to regulation, it looks like there will be a drastic reduction in the number of dispensaries in that city. The regulatory process has three stages. The first involves meeting the bylaw zoning requirements. So far, out of 176 applicants, only 16 have proceeded to the second stage (development application) while 4 are currently in stage three (business license application). No business licenses have been granted yet.

In addition, out of the first 8 Board of Variance appeals by enterprises that do not meet the bylaw requirements, 7 were rejected. The other was adjourned pending results of a new distance measurement in relation to a nearby school.

The Board, perhaps being unsure of its role, might be having difficulty defining “site specific hardship” in these cases, which is the only issue that they can address through their authority under the Vancouver Charter. However, it’s also possible that the Board doesn’t want to address it. During the hearings on March 2, 2016, Robert Laurie, President of AD LUCEM LAW CORPORATION and Advisory Board Member at CAMCD, stated: “This is not about regulating, it’s an elimination strategy, that’s all it is.”

Source: https://news.liftcannabis.ca/2016/03/22/cities-have-a-history-of-regulating-illegal-business/