The vote was not unanimous, as Coun. Elizabeth Ball said the city has no right to regulate dispensaries for pot because it's illegal in Canada.
"We need to work with our federal government if we want to do things right. As a lawmaker, I can't say, 'Oh, I pick and choose this law.' I can't," Ball said outside chambers.
The city is considering new regulations to control illegal pot dispensaries. The rules would include a $30,000 licensing fee and require stores to be 300 metres from schools, community centres and each other.
Since 2012, pot dispensaries have quadrupled in Vancouver, going from fewer than 20 to 80 now. The city has blamed the rise on federal law changes that restricted medical marijuana access.
The federal government has balked at the city's proposal and on Tuesday sent new letters to Vancouver's council, police and health authority warning against regulation.
Health Minister Rona Ambrose and Public Safety Minister Steven Blaney co-signed a letter to council and police warning that storefront sales of marijuana are illegal.
"Like the vast majority of Canadians, the government expects that police will enforce the laws of Canada as written," the letter said.
In a separate letter, Health Canada told Vancouver Coastal Health's chief medical health officer Dr. Patricia Daly that the federal laws are the "best model" for enabling patient access.
The laws, which prevent patients from growing their own pot and instead require them to buy it from a commercial producer, are currently the subject of a court challenge.
Daly told reporters outside council chambers that she fully supports the city's proposal and blames Health Canada's rules for the increase in pot shops in Vancouver.
"They've created a program that has made it very, very difficult for people whose physicians feel they can benefit from this product from getting access to it in a timely way," she said.
A staff report that city manager Penny Ballem presented to council will now go to a public hearing.
The report said less than a quarter of the 80 medical marijuana dispensaries would likely be allowed to stay where they are if the city approves the plan.
But the new rules could also create new capacity for pot shops under new commercial zoning bylaws, potentially increasing the number of stores to 100.
Dispensaries would have to apply for a licence and face a review that would rank them based on factors including the number of complaints and police incidents.
Where two nearby shops have the same ranking, a lottery would decide which one gets to stay.
The report recommended not allowing food such as brownies because the city can't control the contents, but oils would be permitted.
Some activists who attended the meeting expressed dismay about the food rule, saying sick people shouldn't be expected to cook their own medicine.
— Follow @ellekane on Twitter.