"The federal government lost control of this file. As usual, health — which is a provincial matter — eventually fell to the municipalities," Campbell told the Early Edition's Stephen Quinn.
The former Liberal, now independent senator has been advocating for the legalization of marijuana for over a decade.
He says the city's decision to step in with regulations doesn't surprise him at all.
"Vancouver has a long history of being activists, from Gordon Campbell and needle exchanges to Insite [supervised injection site]."
Campbell is also an advisor for Vodis, a Vancouver company aiming to receive a license from Health Canada to sell medical marijuana. He says that relationship doesn't taint his opinion of regulating pot shops.
"I have to make clear I have no involvement in any dispensaries of any kind."
Bigger fish to fry
Multiple members of the federal cabinet have been vocal about their opposition to the regulations. Federal Health Minister Rona Ambrose said she has been disappointed with the Vancouver Police Department not cracking down on dispensaries, and wants to see law enforcement take action to close them down.
Campbell calls that a waste of time.
"There are bigger fish to fry than marijuana sellers. We as a city chose not to follow that route.
"We don't waste our police resources running around chasing nickle and dimes. The issue became somehow we have to regulate these, and so they have."
Campbell, also the former chief coroner of BC, says he's confused about the Conservative government's continued opposition to the use of marijuana in a medical capacity.
"Government has lost it on this one. the supreme court says this is medicine … and at the same time the minister continues to rant. It's bizarre.
"I think she's a good minister just not an especially a good health minister."
To hear the full interview, click the audio labelled: Larry Campbell calls out federal government for opposing Vancouver's regulation of marijuana shops.