Cannabis and Zoning Issues

September 24th, 2018

Cannabis will be legal in Canada on October 17, 2018. Everyone has heard about this, but what form will it take, in terms of production and sales locations? Where will recreational cannabis producers in Québec be able to establish their businesses? Where will the Société québécoise du cannabis be able to open its retail outlets? Those are the questions we will examine in this article, taking into account both the federal and provincial legislation and the zoning bylaws that municipalities might pass.

Power of the Provinces

It is important to recall, first, that at the federal level, the Cannabis Act legalizes cannabis, on the condition that the provinces also do so. The result for Québec is that we must always refer to the Act to constitute the Société québécoise du cannabis, to enact the Cannabis Regulation Act and to amend various highway safety-related provisions to ensure that the provincial legal framework is not more restrictive than the federal legal framework.

Production

At the federal level, the Cannabis Regulations provide for certain places where recreational production may not take place: outdoors where the production site is adjacent to a school, a public playground, a daycare facility, or another public place frequented mainly by individuals under 18 years of age. The Access to Cannabis for Medical Purposes Regulations, which are also federal, contain exactly the same restriction.

At the provincial level, Québec does not yet seem to have defined the locations where recreational production could take place, apart from providing that production for personal purposes is prohibited. We will have to wait for the provincial regulation that may make rules regarding production and transportation. No draft regulation in that regard has yet been published in the Official Gazette of Québec. This means that the federal rules are the minimum that must be complied with, for the moment.

However, it must be noted that several municipalities in Québec are in the process of addressing the issue and amending their zoning bylaws to identify the locations where production will be permitted or prohibited. Those rules may not be more permissive than the federal rules, but they may be more restrictive.

While it might be tempting, at first glance, to think that cannabis cultivation for recreational purposes will be permitted in zones where agriculture is permitted, some municipalities are currently in the process of adopting much more restrictive rules. Some will permit it in industrial zones only, others are planning to make rules governing the distances from residential uses, and some others are preparing to limit those uses within their jurisdiction or within zones.

In addition, while those bylaws have not yet all come into force as this article is being prepared, it is essential to ascertain whether a notice of motion indicating that a bylaw will be adopted in the near future has been passed by the municipal council. In that case, a notice of motion may have a freezing effect that means that a building permit, for example, may not be issued for a certain period, for the time it takes for the municipality to put its new rules in place.

Sale

At the federal level, there are no provisions at present governing the location of retail outlets.

At the provincial level, it has been provided that the Société québécoise du cannabis may not operate a cannabis retail outlet near an educational institution that provides preschool education services or elementary or secondary school instructional services. A retail outlet will be “near” when the shortest route to the outlet from the boundaries of the grounds on which the institution is situated, by a public road, is less than 250 metres or, in the territory of the City of Montreal, less than 150 metres.

Again, we will have to wait for the provincial regulation, to see whether more stringent rules will be made, since the Act provides that the government may, by regulation, prescribe other standards relating to the location of cannabis retail outlets relating, in particular, to the minimum distance required between a cannabis retail outlet and other places frequented by minors or places frequented by vulnerable clienteles.

Completely unexpectedly, the Act provides that municipalities may be more lenient than those provincial rules, by express derogation specifically authorizing a retail outlet. That does not mean that municipalities may adopt generally applicable zoning rules that are more permissive than the provincial provisions. However, it would be possible for a municipality to specifically authorize a conditional use, for example, that did not comply with the provincial distance rules.

Conclusion

To summarize, before making an investment in the hope of establishing a production facility or in order to find out where the Société québécoise du cannabis may open an outlet, the specific rules in each municipality will have to be checked, since municipalities will be able to make their own rules, and those rules will therefore differ from one jurisdiction to another. In terms of production, the federal minimum will always have to be complied with. In terms of sales, subject to specific authorization or an express municipal derogation, the provincial rules will also have to be complied with.