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A Vancouver family known for owning hundreds of run-down residential rentals that have been the subject of numerous municipal bylaw violations is in the advanced stages of pursuing a federal licence to produce medical cannabis on B.C.’s Sunshine Coast.

According to documents obtained by The Globe and Mail, the Sahota family’s application appears to be one step closer to being approved by Health Canada to start cultivating its first test crop. Their application, if granted, would provide the family a foothold in the potentially lucrative recreational market when marijuana is legalized, to the consternation of housing advocates who last summer fought the family’s attempt to open a dispensary in Vancouver.

The Globe has chronicled how the family, led by three elderly and reclusive siblings – Parkash, Gurdyal (Gudy) and Pal – has been the target of city investigations and fines related to poor maintenance of some of their properties. As well, British Columbia’s civil-forfeiture office once pursued the family for an illegal grow-operation at one of their larger houses on the city’s west side, although the charges were later dropped.

Related: B.C. government considers buyout of Sahotas’ single-room occupancy problem buildings

Investigation: For low-income residents in Vancouver, a different kind of real estate crisis

Ajantha (Sam) Dharmapala, who worked for the family as a desk clerk and bookkeeper from 2008 until 2016, questioned how the Sahotas could be licensed to grow marijuana given their disregard for rules as landlords.

“How can Health Canada give that kind of serious licence to people like the Sahotas?” asked Mr. Dharmapala, who helped lead the campaign to stop the family’s dispensary application, which the City of Vancouver’s independent Board of Variance ultimately rejected.

The property of the proposed cannabis farm, located in an industrial park in Port Mellon, northwest of Vancouver, was bought for $1.2-million three years ago. The purchase was made by a firm registered to a property that the three elderly siblings own, located next to their primary residence in the Kerrisdale neighbourhood.

The company, Sunshine Coast Cannabis Farms, has a valid building permit from the local regional district to make $1.5-million worth of repairs to an existing structure on the proposed production site.

The director of the company is listed as Kiran Kaur Sahota, who is also the president of Yang-Myung Holdings Ltd., which owns the Astoria Hotel − one of the family’s five aging single-room occupancy (SRO) hotels.

Last week, provincial Housing Minister Selina Robinson announced her government was considering buying these SRO properties to improve their decrepit conditions. Her comments came after The Globe detailed how hundreds of rental units owned by the family have been allowed to deteriorate − in violation of various bylaws − as vulnerable renters, many on social assistance, struggle to live in this de facto form of social housing.

Kiran Sahota did not return an e-mail last week asking for comment on the cannabis farm, nor did the Sahota family’s Vancouver lawyer, Michael Katzalay. Gudy Sahota answered his phone last Wednesday, but quickly hung up when a reporter identified themself and asked about the cannabis investment.

Tammy Jarbeau, a spokesperson for Health Canada, said in an e-mail that the federal agency closely monitors licensed commercial growers for illegal activities. But, she added, Health Canada cannot comment on the status of individual applications to the medical-cannabis production program.

Health Canada began reviewing the background of the applicant two years ago, according to documents obtained by The Globe from Mr. Dharmapala.

In March of this year, Archer Adler Consultants Solutions, advisers hired by the family, sent an e-mail to congratulate Kiran, Pal and Gurdyal Sahota on passing the in-depth security clearance portion of the application process and included the official Health Canada notification of this milestone.

That meant RCMP and possibly municipal police forces conducted a criminal-record check of those behind the application and checked the “relevant files of law enforcement agencies, including intelligence gathered for law enforcement purposes,” according to the e-mail from Health Canada.

However, previously, police intelligence has linked property rented by the Sahotas to an illegal marijuana grow operation on Vancouver’s wealthy west side.

In 2012, the province’s controversial civil-forfeiture office briefly went after a Sahota property because they rented a house out to an employee of the Astoria Hotel who then started a sizable marijuana grow-operation. The office eventually consented to dropping the case, agreeing with the Sahotas’ account that − in contrast to their normal renting practices − they did not check this tenant’s references and did not know he was associated with drug traffickers at one of their hotels. In the past, the office has been criticized for its aggressive pursuit of homes of landlords that rented to tenants who grew cannabis illegally, an issue The Globe has covered extensively.

In the related criminal case, the tenant was the only person charged and found guilty of illegally producing a controlled substance and handed a 15-month conditional sentence.

Today, the Sahotas’ $2.9-million property that housed the illegal grow operation still sits empty in affluent Kerrisdale. In the six years since the police raid, hundreds of dandelions have colonized the gravel front yard and the two-storey home has been boarded up so local teens can’t keep sneaking in.

With research from Stephanie Chambers

The Regent Hotel is one of several in Vancouver owned by the three reclusive Sahota siblings. The residents of the Regent have to deal with the stench of sewage, black mold and other deficiencies that are the result of decades of neglect by the Sahotas. While a new organization is now managing the building, the fate of the Regent and those who call it home is uncertain.

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