The Limits of Local Authority Over Recreational Cannabis.

• Date: 22 September 2019
• Author: Hoehn, Felix

CONTENTS

1. Introduction 329 II. Cannabis Laws in Canada: A Short History and the Potential Municipal Role 331 III. Local Regulation 334 A. What May Local Governments Want to Regulate? 334 B. Are Local Powers Adequate? 337 IV. Local Prohibitions 345 A. Prohibitions Based on Federal and Provincial Legislation 346 B. Local Authority to Impose Bans 349 1. Municipal Purpose 350 2. Conflict with Provincial Law 354 3. Conflict with Federal Law 356 a. Conflict with Criminal Law Power 356 b. Frustration of a Federal Purpose 358 V. Conclusion 362 I. INTRODUCTION

   Like it or not, in the wake of federal legalization of recreational uses of cannabis, (1) local governments need to regulate cannabis-related activities that are emerging from the shadows. For some municipalities, adapting existing regulations and adding a few more may be enough. Others may want to know whether, or to what extent, they can keep activities associated with cannabis out of their community. This paper will conclude that Canadian municipalities, generally, have the powers they need to regulate cannabis-related activity. They may also be able to ban cannabis-related activities, but bans will be vulnerable to legal challenge--especially if not narrowly focused or expressly supported by federal or provincial legislation.

   Even before legalization, some local governments were regulating legal cannabis-related businesses, and a few even regulated businesses like medical marijuana "compassion clubs" that violated federal laws. (2) In US states with legalized recreational cannabis, many local governments have chosen to ban sales or the processing of cannabis. (3) At the other extreme, the community of North Bonneville, Washington, opened the first municipally-owned cannabis retailer. (4) The legal framework for municipal authority is significantly different in the US, so those precedents are of limited value. Canadian local governments are experienced at regulating all sorts of activities, and legalized recreational cannabis will just add a few more to the list. The more difficult question is to what extent local governments can ban activities related to the production, distribution, or use of recreational cannabis.

   Local cannabis bans could follow the precedent of bans of alcohol or video lottery terminals that are supported by provincial legislation. They might also follow precedents set by municipalities that have used their own powers to ban certain activities within their boundaries. Municipal bans of other activities have had mixed success in withstanding legal challenges, and so it is worth considering what distinguishes valid from invalid bans, and how these factors would apply to bans of cannabis-related activities. This paper will examine what the law related to the validity of local bans tells us about the legal limits of the municipal regulation of cannabis. It will conclude that, while a final answer would have to await the verdict of the courts, focused bans imposed for municipal purposes are likely valid. A broad ban of cannabis-related activities, especially one extending to possession and consumption on private property is more vulnerable to attack, but even this kind of bylaw may be defensible in certain circumstances where special local needs exist.

2. CANNABIS LAWS IN CANADA: A SHORT HISTORY AND THE POTENTIAL MUNICIPAL ROLE

   In Canada, cannabis had been prohibited since the 1920s. (5) Subject to some exemptions for medical use, until October 17, 2018, it continued to be a criminal offence to possess, produce, or sell cannabis. (6) In spite of this prohibition, its use was common, especially among younger people. In a recent survey, the proportion of the population reporting cannabis use in the past year was 21% of youths aged 15-19, 30% of adults aged 20-24, and 10% of adults aged 25 or older. (7) Of those reporting use in the past year, 72% reported using cannabis in the past three months, 33% reported using it on a daily or close to a daily basis, and 24% reported using it for medical purposes.

   About twenty years ago, the Ontario Court of Appeal determined that the blanket criminal prohibition of cannabis violated the right to life, liberty, and security of the person under the Canadian Charter of Rights and Freedoms, (8) in a manner not in accordance with the principles of fundamental justice. (9) This ruling caused the federal government to provide a system of medical access that went through a number of iterations in response to court challenges. None of the regulatory schemes before the legalization of recreational cannabis allowed for retail sales. The regulations in effect just before legalization, adopted in 2016, allowed patients to cultivate their own cannabis for medical purposes, to designate someone else to do so, or to purchase from a licensed producer. (10)

   Late 2015 saw the election of a federal government committed to legalizing cannabis. In June of the following year, the new government appointed the Task Force on Cannabis Legalization and Regulation, which, after public consultations and research, delivered its Final Report in late 2016. (11) Most of the recommendations of the Task Force were incorporated into the Cannabis Act. (12)

   The Cannabis Act divides regulatory responsibilities between the federal government and the provinces, and there is no constitutional barrier to municipalities adding a third layer of regulation. At the same time, there are limits to how far local governments can go, especially if they try to go beyond regulation to prohibiting cannabis-related activities, and this is the subject of Part IV, below. A precedent for local bylaws supplementing federal and provincial regulations is the Supreme Court of Canada's decision in 114957 Canada Ltee (Spraytech, Societe d'arrosage) v Hudson (Town). (13) The Court rejected a challenge of the Town of Hudson's bylaw banning cosmetic uses of pesticides and held the bylaw to be one component of a "tri-level regulatory regime." (14) The federal legislation focused on the products themselves, and the province licensed vendors and applicators. This left municipalities the scope to regulate the purposes for which pesticides could be used. (15) The bylaws could stand because they did not frustrate the purpose of federal laws, and complying with the bylaw did not result in a breach of provincial or federal law. (16)

   A closer look at the Cannabis Act reveals that the regulation of cannabis will require regulation from federal, provincial, local, and probably Indigenous governments. (17) While there is some overlap, in general terms, the regulation of principal elements of the cannabis industry can be apportioned to levels of government in a manner analogous to what was upheld in Spraytech. The federal government is responsible for, among other things, regulating production and the type of products that may be sold, as well as setting health and safety standards and rules relating to labelling, packaging, and promotion. (18) The federal legislation allows adults to possess up to 30 grams of cannabis and to grow up to four cannabis plants per household. (19) Subject to minimum federal conditions, the main provincial and territorial role is to regulate distribution and sale. Provinces could also regulate other matters within their jurisdiction, such as restricting where cannabis may be consumed, and they could impose a higher minimum age or more restrictive limits on cultivation than the federal legislation. (20) Since municipal governments fall under provincial jurisdiction, (21) the scope for local regulation varies according to how much of their jurisdiction provinces exercise themselves and how much they leave for municipalities to regulate using powers passed down from the provinces.

   Since all territories and provinces delegate land use control powers to local governments, generally, the dominant municipal role will be to make decisions about where cannabis-related businesses, such as producers, distributors, and retailers, can locate. Municipalities can also use their business licensing powers to charge fees and to impose conditions on the operation of cannabis-related businesses. The Cannabis Act allows the Attorney General of Canada to contract with provincial, municipal, or local authorities to prosecute certain offences deemed ticketable under the Act, and that agreement may provide for fines and fees to be shared with these authorities. (22)

   As discussed in the next section, local government authority related to the cannabis industry goes beyond traditional functions of land use planning and business licensing. Modern municipal statutes give broad authority to municipalities to regulate for a wide range of purposes, including health and welfare and the prevention of nuisances. Subject to limits imposed by potential conflicts with provincial or federal legislation, this broad authority allows municipalities to supplement federal and provincial regulation of legalized cannabis.

3. LOCAL REGULATION

   1. What May Local Governments Want to Regulate?

      The Federation of Canadian Municipalities (FCM) called for provincial and federal governments to respect municipal authority by making room for a central role for municipal regulation of cannabis. (23) According to the FCM, local governments are best positioned to regulate production, distribution, and consumption with local bylaws "...and to manage the health and safety impacts of how and where marijuana is consumed." (24)

      While some might be surprised at the suggestion that constitutionally superior levels of government should defer to local authorities on how to regulate such an important matter, FCM's position is reminiscent of what the Supreme Court of Canada said in Spraytech about the principle of "subsidiarity" and why local governments are often best placed to regulate:

      The case arises in an era in which matters of governance are often examined through the lens of the principle of subsidiarity...