After 10 years, Dana LarsenB次元官网网址檚 high-profile dispensary on East Hastings Street in Vancouver was forced to end all sales of cannabis or be held in contempt of court.
It was one of several illicit dispensaries operating in the city ordered to close by the B.C. Supreme Court. A similar fate is expected for many similar B.C. operations that fail to obtain a provincial license.
LarsenB次元官网网址檚 other dispensary on Thurlow Street in downtown Vancouver does have a development permit and continues to serve customers.
B次元官网网址淣ow we have huge lineups there, as all of our customers from the downtown eastside have to truck over there to buy their cannabis, which to me, is kind of absurd,B次元官网网址� Larsen said.
Larsen is one of VancouverB次元官网网址檚 most prominent cannabis advocates.
He is the co-founder of the Vancouver seed bank, an organization that gave growers access to cannabis seeds. He also helped organize the first ever 4/20 celebrations in Vancouver, and has published several books about cannabis. He has spent most of his life advocating for legal cannabis in Canada.
But now that legalization has happened, Larsen is left feeling disappointed.
B次元官网网址淚n your imagination you think thereB次元官网网址檚 going to be a day where they announce they were wrong and you were right, and prohibition was a racist, bigoted, ignorant bunch of nonsense that never should have started, but that day is probably still a long way away. This kind of corporatized, punitive, and restrictive cannabis, if you look historically, I suppose itB次元官网网址檚 not surprising,B次元官网网址� Larsen said.
Since legalization, many Canadians have taken to social media to express concerns around cannabis regulations ranging from quality, to fair access, and lack of retail locations.
As it stands now, only licensed retailers are permitted to sell cannabis, and that cannabis must come from a licensed producer. Retailers must also navigate a complex approval process that relies heavily on municipal governments. These regulations have led the B.C. government to adjust their estimated cannabis revenues from $200 million to $68 million.
Many dispensaries have remained open in spite of the regulations.
One of those retailers is Trees, a dispensary chain based on Vancouver Island. Trees operates eight locations B次元官网网址� five in Victoria, two in Nanaimo, and one in VancouverB次元官网网址檚 downtown eastside.
It began with three cannabis compassion clubs in 2014: the Vancouver Island Health Advocacy Centre in Nanaimo, Shiva Compassion Society in Victoria, and the Dank Bank which was also in Victoria.
The owners ran into financial trouble when they were audited by the Canadian Revenue Agency. But an investor from Vancouver saw that Trees would be a potentially successful business model, and moved to buy the compassion clubs in January 2015.
Shortly after the investment, Alex Robb, a PhD student from the University of Victoria was hired at Trees. He worked his way through the company to become the CEO, and has guided Trees through the process of licensing all their locations.
According to Robb the system is fairly complex.
Dispensaries must make an application to the Liquor and Cannabis Regulation Branch, (LCRB) to open a retail store. The LCRB returns the completed application to the local government, and the location must be approved for rezoning.
If rezoning is approved, the application goes back to the LCRB for the business to be deemed B次元官网网址渇it and proper.B次元官网网址�
The dispensary must then notify all residents and businesses within 50 metres about the opening of a store. Public feedback is brought to the municipal government which gives the final note of approval to the province. If the municipal government approves a location, the LRCB then approves or rejects the license.
Once the license is approved, municipalities can issue a business license and dispensaries can operate with their license to order cannabis from the Liquor Distribution Branch, (BCLDB). Orders have been plagued by supply shortages and have left some dispensaries unable to meet demand.
The process may vary throughout B.C. as different municipalities have different regulations and bylaws.
B次元官网网址淭his was one of the reasons for B.C.B次元官网网址檚 delays,B次元官网网址� Robb said. B次元官网网址淭he B.C. government decided they wanted to create a system where the local governments had a lot of say in the land use, zoning, and the rules by which a cannabis retail store would be run.B次元官网网址�
B次元官网网址淭hen there were the municipal elections in September. So, a lot of cities, not only did they not have a chance to get the rules in place that would determine how they would choose zoning, or land use for cannabis, but there was also a whole new slate of city councillors elected that had to be educated on the issue, and what their powers as local government are.B次元官网网址�
Trees is currently at the stage of financial background checks with the province, and has provided all business records spanning their four year history.
B次元官网网址淭hey want to know that youB次元官网网址檙e financially able and the money doesnB次元官网网址檛 come from organized crime,B次元官网网址� Robb said. B次元官网网址淭rees has been in operation since 2015, so we have four and a half years of business history. We had to go back and find the loans, from a grower actually, that launched the business in the first place.B次元官网网址�
To date, Trees has spent hundreds of thousands of dollars to get its eight locations licensed. Robb broke down the licensing costs for one location in Victoria to give an example.
B次元官网网址淭he application for the license provincially was $7,500. The application for the rezoning was $7,500. Once youB次元官网网址檙e rezoned, you have to schedule a public hearing, which is an additional $2,000. Then thereB次元官网网址檚 an additional $1,500 licence fee after theyB次元官网网址檝e approved you in principle,B次元官网网址� he said.
B次元官网网址淪o itB次元官网网址檚 $15,000 to apply, then if you get past a certain step itB次元官网网址檚 an additional $5,000. The applications alone are $20,000. Then you have to pay architectB次元官网网址檚 fees, legal fees, so youB次元官网网址檙e looking at about $8,000 in professional fees. IB次元官网网址檇 say itB次元官网网址檚 about $30,000 just to get the application together.B次元官网网址�
After the approval process, Robb said businesses would want $60,000 to $100,000 to purchase inventory for the BCLDB. Altogether, one store could cost a minimum of $200,000.
These costs create a higher barrier for investors and entrepreneurs looking to enter the industry, however they are comparable to opening a private liquor store.
In typical retail businesses like a cafe or restaurant, the fees are much lower, and businesses often open quickly after their application is approved. With cannabis retailers, the costs are far greater, and the approval process could leave businesses waiting a year or longer. An added challenge is that most banks will not give loans to entrepreneurs wanting to open cannabis stores.
The delays associated with licensing a cannabis store are part of the reason why Trees has remained open, despite technically being an illicit retailer.
B次元官网网址淲eB次元官网网址檝e continued to operate because we had been operating for four years. WeB次元官网网址檝e been proceeding through the application process, we are anticipating being licensed in a matter of weeks,B次元官网网址� Robb said. B次元官网网址淭he reason we decided not to close down was we saw the process was going to take several months. And we saw that the election cycle was coming for municipal governments.B次元官网网址�
B次元官网网址淲e employ 170 people. WeB次元官网网址檙e a significant hub of south Vancouver IslandB次元官网网址檚 economic activity in terms of the ongoing cannabis economy. We have nine different leases that we have to pay, so to close down without knowing we would be able to open in two months, or six months, or nine months B次元官网网址� it turned out the first store to be licensed in Victoria was six months B次元官网网址� weB次元官网网址檙e hoping we can be licensed nine months after legalization.B次元官网网址�
TreesB次元官网网址� decision to remain open likely wonB次元官网网址檛 impact their application, as the municipalities where their stores operate have allowed them to do so.
All products sold at Trees are sourced from a network of unlicensed growers on Vancouver Island. This means that all cannabis products currently sold at Trees are illegal under the federal Cannabis Act and the Cannabis Control Licensing Act of B.C. Once they become licensed they will only sell BCLDB products.
The Ministry of Public safety said in a statement that all legal non-medical cannabis has an excise stamp attached to its packaging, and products without the stamp are not legal for sale in B.C. This could leave customers liable for a $575 fine for purchasing illicit cannabis from a dispensary, with a potential maximum fine of $10,000 and up to 6 months in prison, or both.
Robb says thatB次元官网网址檚 a risk most consumers are aware of and willing to take.
B次元官网网址淚 absolutely am certain they are aware. We train all of our staff to explain we are in the process of being licensed, weB次元官网网址檙e still open because weB次元官网网址檝e been open for years serving the community in this area, and weB次元官网网址檙e continuing to do so while our license is in process. We make no claim to be a licensed store, and I think that everybody probably knows that weB次元官网网址檙e not,B次元官网网址� Robb said.
Despite operating illegally for four and a half years, Trees has consistently paid all relevant taxes. They have paid GST for their entire period of operation, as well as corporate income taxes and payroll remittance. Since legalization on October 17, they have paid a little over $1 million in PST. The government would not accept PST from cannabis sales prior to legalization.
While Trees is likely to be approved by the provincial government, not all legacy cannabis stores are so hopeful.
Richard Scott is the owner of The Globe in Nanaimo, a heritage hotel steps away from the Nanaimo courthouse that has at times been a hotel, public house, strip club, and cannabis compassion club.
The Globe has been a B次元官网网址渃annabis friendlyB次元官网网址� establishment since 2015 when it opened as an illicit dispensary and compassion club. It was raided by the RCMP in December 2015, although no charges were brought and the Globe reopened one day after the raid occurred.
Scott says he isnB次元官网网址檛 holding his breath when it comes to the GlobeB次元官网网址檚 pending dispensary license. The operation has been approved by NanaimoB次元官网网址檚 municipal government, but Scott suspects the province will ultimately deny his application.
In the meantime, he has ceased selling cannabis and operates the Globe as a cannabis-friendly hotel with an auxiliary restaurant and lounge. Municipal bylaws do not allow for smoking inside restaurants, a bylaw that many have said will prevent B.C. from opening cannabis cafes and compassion lounges. Scott says the key to avoiding trouble with the bylaw is by being neighbourly.
B次元官网网址淚tB次元官网网址檚 been quite smooth. We tend to be neighbourly. WeB次元官网网址檙e right next door to the courthouse, so if we were going to get any complaints itB次元官网网址檇 be from them.B次元官网网址�
B次元官网网址淚 try to keep the smell down until after five, and I tell everybody that comes in that we donB次元官网网址檛 smoke flower until after five. If the cannabis smoke was to go wafting through the courthouse, the judge would shut us down in a day,B次元官网网址� he said.
Scott believes that there needs to be more compassion clubs like the Globe to give cannabis users a safe space where they can consume cannabis. It is common for landlords and property managers to restrict cannabis use. Some municipalities have banned the consumption of cannabis in public spaces, while others have ruled that cannabis can be smoked anywhere cigarettes can be smoked. Nanaimo is one of the municipalities that allows cannabis to be smoked in public.
B次元官网网址淒o we really want to have more people smoking on the streets? Do we want people sitting in the park with their bongs smoking dabs out in plain view for the kids to see? If we want to hide it from the kids, which is the idea of legalization, then where do people go? Well there has to be pubs, public houses for safe consumption,B次元官网网址� Scott said.
As unlicensed dispensaries wait for approval from municipal and provincial governments, Community Safety Unit (CSU) officers have begun visiting unlicensed retailers to raise awareness about cannabis laws, and the consequences for violating them. The Ministry of Public Safety expects many unlicensed locations will close voluntarily as more licensed retailers appear in the province.
CSU officers did visit LarsenB次元官网网址檚 Vancouver dispensary before it was closed.
B次元官网网址淚 think most people like dispensaries and if they were just to come and raid everybody, especially in Vancouver, thereB次元官网网址檇 be a lot of pushback. I think thatB次元官网网址檚 why theyB次元官网网址檝e created this system where they have allowed more places to operate with development permits, even though theyB次元官网网址檙e selling B次元官网网址榠llicitB次元官网网址� cannabis,B次元官网网址� Larsen said.
For Larsen, the current state of legalized cannabis is just another step toward improved access for all Canadians.
B次元官网网址淚 hope that we get a government that will acknowledge that cannabis was good and prohibition was wrong,B次元官网网址� he said. B次元官网网址淓ven though weB次元官网网址檙e seeing a lot of dispensaries shutting down, and things evolving, if you look back a couple years ago there were 100 dispensaries in Vancouver. If you look back a few years earlier than that, there were three. Now thereB次元官网网址檚 25 in the process, and six that are government regulated.
B次元官网网址淓ven though thereB次元官网网址檚 a lot of flaws there, to me that still looks like weB次元官网网址檙e winning.B次元官网网址�
