Pot-legalization advocates, dispensary owners and patients crammed city hall on Wednesday evening as the hearing began.
City manager Penny Ballem says the number of authorized medical marijuana users in British Columbia accounts for nearly half of all those in Canada.
The city is proposing new regulations to control the rapid growth of illegal pot shops, which have multiplied from fewer than 20 to 94 over the past three years.
The regulations would include a new business licence category, a $30,000 fee and a requirement that stores be 300 metres away from schools, community centres and other pot shops.
Ballem says the city hopes to reduce youth exposure and serious crime and is now considering allowing up to five licences per owner rather than just one.
"We have tried to achieve a really balanced approach here to allow people who need to access marijuana for medical issues to be actually able to do that but to protect the public," she says.
"Some people think we're too strict and some people's input is that we're too lenient."
Selling marijuana over the counter is illegal in Canada — regardless of whether it's medical or recreational — and the federal government has strongly warned against the plan.
The city has said that the federal government's strict medical marijuana laws have fostered the rise of dispensaries in Vancouver.
Dispensary owners are split on the proposed regulations, with some complaining the hefty fee and location requirements will put them out of business, while others support the rules as a step toward legalization.
The hearing is expected to stretch over several days