City staff plan to present their proposal to the mayor and council next week. If applied, it would set a precedent for Canada's fastest-budding marijuana industry.
"In the greyness and the confusion ... that we're in right now in terms of the status of the federal approach, the city has decided that we have to step in," city manager Penny Ballem said Wednesday.
"We don't have jurisdiction over the sale of marijuana, but we do have a very clear jurisdiction over businesses."
More than 80 medical marijuana stores have opened in
Vancouver in last two years, with 20 them starting up in the last four months alone.
Councillors have previously said the city has lost patience with the federal government, which upholds criminalization and opposes legitimizing dispensaries.
The proposal aims to balance the needs of people accessing medical cannabis with community safety, security and aesthetics, Ballem said.
The rules would require retailers to pay a $30,000 licensing fee, notify the public before opening a store that must be located at least 300 metres from schools, community centres and other marijuana-related businesses.
The city looked to Washington and Colorado for best practices in drafting the regulations, said Ballem, who wasn't aware of any other Canadian city that's taken the same approach.
The federal government is aware of the city's actions but has so far stayed mum, Ballem said.
"The reaction that we've had from all the public sectors — school boards, health, the police and the public — is something needs to happen."
Marijuana advocate Dana Larsen, who has run the Medicinal Cannabis Dispensary for seven years, said the local industry welcomes oversight and that he's optimistic any issues can be worked out.
"I'm hoping what comes out of this is an example for the rest of Canada on how you can properly regulate cannabis dispensaries," said Larsen, who is also vice-president of the Canadian Association of Medical Cannabis Dispensaries.
"If they wanted to crack down, they would have cracked down years ago and not let it proliferate the way it has."
Ballem said some outlets will be forced to move or close because the distancing rules will be non-negotiable. Once the rules are approved, current businesses will have 30 days to make an application.
The $30,000 licence is substantially higher than the maximum $12,000 that other businesses must pay but Ballem said extra staff will be needed to cover assessments and paperwork for the marijuana industry.
Larsen said he was aware of only one dispensary in the country currently operating with a specific business licence for medical marijuana and that it's located in West Kelowna, B.C.
Toronto has about nine dispensaries, he said, some of which might have business licences but didn't apply to sell medical marijuana.
Larsen said more than half the dispensaries in Canada are located in Vancouver, but more are opening in B.C. communities such as Victoria, Nanaimo, Grand Forks and Parksville, as well as in Calgary and Saskatoon.
The city said in a news release that a public hearing may be held on the issue.
Vancouver's first marijuana-related business opened in 1997.
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