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Vancouver’s outlaw cannabis shops are expected to gradually fade away after a B.C. Court of Appeal decision last week removed any hope the stores could continue to operate outside the bounds of the provincial and municipal licensing rules.

Vancouver was once home to more than a hundred illicit cannabis retailers before the legalization of recreational marijuana, but, now, just nine of these storefronts compete with the 19 businesses so far licensed by the city and the province. The sector had been awaiting a verdict in a case launched by nine former retailers who had argued Canadian cities have no right to limit where medical cannabis can be sold. They argued the storefront sales of the drug are a federal – not a municipal – matter and the city’s licensing rules interfered with patients’ “reasonable access” to the drug.

The pot shops argued patients’ Charter rights were infringed upon because the licensing system could require patients to travel further than one could easily make it on foot or by motorized scooter to obtain medical cannabis.

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But that argument was rejected by all three justices.

“The same argument could be made in relation to any medical treatment or prescription and would lead to the absurd result that the City would be unable to enact zoning bylaws regulating the location of pharmacies and medical offices generally,” Justice Peter Willcock wrote.

Toronto-based Jack Lloyd, one of several lawyers for the dispensaries that lost the B.C. Court of Appeal decision, said the province and the city will slowly shut down these remaining illicit shops, but the sector will continue its “principled retreat.”

“The government’s going to win, they’re going to slowly eradicate compassionate access to cannabis,” said Mr. Lloyd, who represents clients across the country. “But I’m going to slow it down as much as I can and fight so that people can access their medicine.”

Long-time illicit entrepreneur Don Briere, owner of the defunct Weeds Glass and Gifts chain, said he has decided not to appeal the decision to the Supreme Court of Canada and instead will focus on securing legal provincial and municipal licences to sell cannabis. When the group of scofflaws lost in the B.C. Supreme Court last year, Mr. Briere, one of the most deep-pocketed respondents, had pledged to continue shipping a wide variety of products online from his company’s nondescript corporate headquarters in East Vancouver. Now, he has seen the appeal of going legit.

“We want to comply with all the rules and regulations and open a legal store,” said Mr. Briere, whose chain of illegal shops once employed more than 200 people at three dozen locations in multiple provinces. “If it weren’t for people like us, cannabis never would have been legalized.”

The case dates back to 2017 when Vancouver filed injunctions against unauthorized dispensaries that were disqualified from getting a municipal business licence because they operate within 300 metres of one another or a school or community centre.

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The three Court of Appeal judges ruled that the lower court had correctly dismissed the previous challenge.

Asked about the ruling and the state of Vancouver’s illicit cannabis stores, city spokesperson Ruth Suurkask said the city’s legal department has either filed or is preparing to take legal action against the nine remaining shops, which are spread across several different neighbourhoods.

These stores are also subject to enforcement from the provincial government’s Community Safety Unit, which says it has so far visited more than 250 unlicensed retailers.

John Conroy, one of the lead lawyers for the offending shops, said he is unaware of any illicit operators getting charged with criminal offences by this specialized unit. What is more common, he said, is for them to first ask the store owners to shut down voluntarily. After a short period, they will come back and confiscate all illicit products, ask a forensic accountant to calculate their value and then issue a ticket to the offending retailer.

“Imprisonment or the threat of imprisonment is not appropriate in these circumstances,” he said.

Dan McLaughlin, spokesperson for the B.C. Prosecution Service, said the province’s cannabis unit has not yet forwarded any cases to counsel to take to court.

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