11741780VANCOUVER — Three pot dispensaries have passed the second hurdle in the City of Vancouver regulatory process designed to exert some control over the shops that had grown to more than 100 by last year.

The MPN Health Society on Kingsway, the Buddha Barn Medicinal Cannabis Society on Fourth Avenue in Kitsilano and the Herb Co. on Main Street have had their development applications approved by the city.

They still must apply for a business licence, which requires criminal records checks of owners and staff.

Another dispensary — the Green Room Society on East 57th — has had its development application rejected because the city concluded the use of the location as a dispensary was “unsatisfactory” and objections have been raised by neighbouring property owners.

The dispensaries were among 16 marijuana locations that had made it through to the development application stage.

Under Vancouver’s rules, shops are restricted to commercial zones and cannot be within 300 metres of schools, community centres, neighbourhood houses, facilities that serve vulnerable youth and other marijuana-related businesses. Most applicants were rejected under those rules before even getting to the development application stage.

“Probably, we made it so far because we’ve been working closely with the City of Vancouver,” said Tina Zlati, a director of the MPN Health Society. “They managed to give us really good guidelines of what they are expecting. So, that was really helpful.”

Under the new process, the city received 176 applications but only dozens are expected to get approval as shops try to maintain a toehold in the medical pot dispensary business and wait for new rules from the federal Liberal government that has promised to legalize and regulate access to marijuana.

The city says it expects the development application review of the 16 to be complete in a week or so.

No firm date has been set for completion of business licence reviews.

As the dispensaries try to win approval, there is little information on the applicants themselves offered in city documentation. The names of owners and staff are often blacked out, which the city has said has been done for privacy reasons.

A search of B.C. corporate and society registry documents by The Vancouver Sun shows that most society directors are from the Lower Mainland, although there also societies with directors from Vancouver Island, the B.C. Interior and as far away as Toronto.

The MPN Health Society includes a director from Edmonton, Realtor Samuel Petrov, as well as Genna Zimmel and Zlati from Vancouver. Zlati and Zimmel say they have an interest in marijuana’s health properties. The society outlined a plan to the city for a wellness centre that provides access to natural medication, physical fitness and nutritional advice. “As we move forward into gaining our business licence, we will be more wellness integrated,” said Zimmel.

The marijuana shops in Vancouver — which are illegal under federal law — do not have to declare whether they intend to be a non-profit compassion club or a for-profit dispensary until the business licence stage, according to a statement from the city.

Zlati said they will apply as a non-profit compassion club, which has a $1,000 licensing fee compared to the $30,00o for medical-marijuana dispensaries.

Asked if MPN Health Society was trying to get a toehold in the pot business in anticipation of legalization, Zlati would only say they are using the process that is available to them in Vancouver.

Both Zlati and Zimmel have had stock options in publicly-traded Aurora Cannabis, one of the 20 industrial-sized pot growers licensed by Health Canada to sell directly to patients, according to documents filed on the Canadian Securities Exchange, an alternative and much smaller exchange to the Toronto Stock Exchange.

Zlati said the options were for investment purposes only and there is no business-to-business relationship between MPN Health and Aurora Cannabis.

Werner Antweiler, a Sauder School of Business professor at the University of B.C., said there is little doubt that players that hope to be part of a legalized marijuana industry are trying to position themselves to have a foot in the door.

However, he said it’s impossible to know exactly what the rules will be or what kind of business model will work.

Antweiler said there could be a big shake out where many existing players will not survive.

Andreaa Toma, the city’s director of licensing, said Vancouver’s new process will be help inform its land use and business licensing process — the only powers the city has when it comes to pot shops — regardless of the shape of the new federal rules on marijuana. “I think there are so many things that need to be worked out as this is going to be a huge industry,” said Toma.

The society records also show that two of the 16 dispensaries that made it to the development application stage — Scooter Health on Kingsway and Apple Health on 7th Avenue in Point Grey — have the same set of directors. Those are Douglas Graham Stephen of Vancouver, Brayden Taekema of Port Alberni, Kolten Taekema of North Saanich, Andrew Earnest Wharton of Vancouver and Michael Joseph Wilgosh of Vancouver. Representatives of the societies did not respond to a request for an interview.

Also among the 16 applicants under consideration for a development application is the Stressed and Depressed Association on East 41st Street. One of its five directors is David Malmo-Levine, a long time pot activist, who took a 1996 charge for possession of marijuana for the purpose of trafficking all the way to the Supreme Court of Canada. Malmo-Levine was challenging the constitutionality of the country’s laws but lost.

He doesn’t like the city’s process, but is applying he said in order to keep Stressed and Depressed operating to generate income to continue his fight to liberalize pot rules.

He says whether their pot dispensary will be approved by the city is an open question. “I have a colourful legal history and so it depends on how hardass they want to be,” he said. “But we don’t have any complaints from neighbours, so that’s not going to be a factor.”