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The fact that some operations have been able to secure licences – some for as little as $2 by registering as community associations – is raising questions about the city’s haphazard approach to the industry.John Lehmann/The Globe and Mail

At least 14 of Vancouver's more than 80 medical marijuana dispensaries either already have business licences or are awaiting approval, despite the city's claims it has been virtually powerless to exercise any oversight over storefronts that openly sell the drug.

The fact that some operations have been able to secure licences – some for as little as $2 by registering as community associations – is raising questions about the city's haphazard approach to the industry and whether dispensaries will feel compelled to follow strict new licensing regulations that could be in place by the end of the year.

The city is proposing a new class of business licence for dispensaries and other marijuana-related businesses, restricting where they can operate and imposing a hefty $30,000 yearly licensing fees. Public hearings are expected later this spring.

Until now, the city's dispensaries have faced little consequence for ignoring the rules.

All of them are violating federal drug laws, both by illegally obtaining marijuana and then selling it to consumers. Only a small handful have business licences of any kind.

"If you or I tried to start a business selling straw hats, then the bylaw officers would be around like lightning trying to find out why we're operating without a business licence and shut us down," says Rob Gordon, a criminology professor at Simon Fraser University in Burnaby, east of Vancouver.

"So what's the difference?"

Dr. Gordon said the city's approach only adds to the confusion about the laws around medical marijuana access.

The city has repeatedly said in the past it does not have a business licence category for marijuana dispensaries, leaving it with few options to control their growth.

However, a city database indicates seven dispensaries already have business licences. Four of those, including CanMed Wellness and Eden Medicinal Society, are registered as retail stores, having paid registration fees ranging from $133 to $288. Three others, including Canna Clinic Medicinal Society, are listed as community associations and paid a $2 fee.

Seven other dispensaries, all registered as community associations, have licences listed as "pending."

City of Vancouver spokesman Jason Watson acknowledged in a written statement that several dispensaries currently have business licences, though all will be required to reapply under the new rules. Mr. Watson did not explain why those licences were handed out in the first place or what requirements the businesses had to satisfy before they were approved.

Councillor Kerry Jang, who has overseen the marijuana file for the governing Vision Vancouver party, declined to comment while the issue is before public hearings. Mr. Jang has previously suggested dispensaries with business licences may have obtained them under false pretenses.

Some have vague names, such as Red Med, but others such as Point Grey Cannabis, which paid $174 for a retail licence this past February, leave less to the imagination.

Councillor Elizabeth Ball of the Non-Partisan Association, who was the lone councillor to vote against sending the issue to public hearings, said the city's dispensaries have been able to expand due to "benign neglect."

She said it's difficult to predict how well the new system will work, given the city's inconsistent approach to dispensaries until now.

"So are they [the new licences] going to be worth the paper they're printed on?" said Ms. Ball, who stressed that she was not against the idea of medical marijuana.

A report delivered to city council last month says the rules would be enforced through ticketing, fines of up to $10,000 a day, court injunctions and prosecutions. A number of city departments would be involved, as would the local health authority and the fire department.

The Vancouver Police Department, which has treated dispensaries as a "low priority" and intervened only in response to public safety concerns, such as sales to minors, says it does not plan to change its strategy and won't be involved in enforcing the new licensing rules. It has previously raided nine dispensaries.

Dana Larsen, a marijuana advocate who runs two dispensaries – neither of which is licensed – says he "absolutely" intends to participate in the new licensing system and he predicted others will as well.

"My goal is not to have anarchy but to have a regulated system for marijuana access for all Canadians," said Mr. Larsen.

"I may not like all the specific regulations they're putting in place, but over all, I think it's important. And it's not tenable for it to continue the way it is."

The federal government has urged Vancouver not to press ahead with its licensing system, but Health Minister Rona Ambrose and Public Safety Minister Steven Blaney have not said what, if anything, Ottawa will do if the city ignores those warnings.