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Role of local governments regulating pot unclear

Focus on: ‘We are in a bit of limbo right now’
Powered By Law Times NewsBusiness & Legal Issues||Written By Shannon Kari
Role of local governments regulating pot unclear

The sale of marijuana for recreational uses will be legal 12 months from now, but the role of local governments in overseeing and regulating these operations is still very much up in the air.

As a result, most Ontario municipalities do not have any bylaws or rules in place and are instead waiting for the federal and provincial governments to enact legislation that will determine which types of businesses can sell cannabis.

“We are in a bit of limbo right now,” says Joy Hulton, solicitor for York Region, just north of Toronto. “We are in a holding pattern,” she adds.

The legislation introduced in April by the federal government is now at the committee stage. It would permit possession of up to 30 grams of dried marijuana for adults, as well as the right to grow four plants in a private residence.  

Marijuana “edibles” will not be legal when the legislation takes effect on July 1, 2018, although the federal government says that will change at some point in the future.

Provincial governments will be responsible for setting the laws that determine how cannabis can be distributed and sold. To date, there has been very little information made public by the Ontario government as to what it intends to do in this area. The federal government set 18 as the minimum age to be permitted to purchase marijuana, but Ontario would be entitled to raise that to 19, for example, the same as the age of majority for alcohol.

It is also unclear as to whether sales will be open to retail operations such as marijuana dispensaries that are now selling cannabis illegally or restricted to an LCBO-style or drugstore-like setting.

The extent of the future role for municipalities in this area really depends on what action the province takes, Hulton explains. While the federal task force into marijuana legalization explicitly warned against permitting alcohol and cannabis to be sold in the same location, the province could set up a government-run retail operation — similar to the LCBO.

“There would be less responsibility for municipalities” if the province follows an LCBO model, says Hulton.

“If there is an open retail market, then municipalities would have a big role in licensing,” she suggests.

The York Region solicitor is part of an Association of Municipalities of Ontario task force on marijuana that has been in discussions with the province on this issue.

A recent report issued by AMO stated that the organization is calling for municipalities to have the right to opt out of permitting marijuana sales through licensing regulations.

As well, it is asking for increased public health funding and a dedicated tax for municipalities to deal with increased costs associated with legalizing marijuana.

In Denver, for example, there is a 3.5-per-cent special municipal sales tax on cannabis and 10-per-cent special state tax (in addition to another 7.5 per cent in regular state and municipal sales taxes).

Municipalities are seeking more say in the rules around marijuana sales, including where retail outlets will be allowed to operate, says Hulton. In the past, she notes, there has been very little consultation in areas such as where the province would put a casino, for example, even over the opposition of a local community.

“They are saying, ‘Don’t do this to us again,’” she says.

As well, other issues such as restrictions on smoking in public establishments, similar to tobacco, need to be finalized, Hulton says. She adds that enforcement responsibilities need to be clarified once possession of small amounts of cannabis is legalized.

In Toronto, there has been little open discussion by the municipal government in terms of what it intends to do once marijuana is legalized. The city’s legal services branch declined to comment to Law Times as a result of the “uncertainties” around the issue at this time.

One of the only spots in Ontario to take action so far is Brantford.

Earlier this month, a committee approved a measure that would prohibit retail marijuana outlets in the city. It’s expected to be passed by council. The zoning changes have been classified as a temporary measure in city documents, with staff required to report back to council once the federal and provincial government have enacted marijuana legislation.

At least one city solicitor in the province, though, is not convinced that legalizing cannabis will cause significant challenges for municipalities.

“There seems to be a lot more angst than there should be,” says Ken Beaman, a Niagara Falls city solicitor. “We don’t have this fuss about liquor stores. No one says they should not be near schools. There is a bit of a reefer madness reaction,” says Beaman in respect to controversies over where any marijuana retail outlet might be located.