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BC Gets Tougher on Licensees and Applicants Who Have Operated Illegally
Obtaining a BC cannabis license just became more difficult for former illegal dispensary operators wanting to make the transition to provincially-licensed non-medical cannabis store.
Well after the legalization of cannabis in Canada, the BC government waged war on the province’s remaining illegal “dispensaries”. Tens of court injunctions forcing closure and several appeals later, prohibition-era dispensaries are starting to become a faint memory.
Although many illegal operators have shut their doors voluntary, obtained a BC cannabis license, and re-opened as licensed retail cannabis stores, those that did not comply face dire consequences. In February, the BC Liquor & Cannabis Regulation Branch (LCRB) sent a notice of changes to disclosure processes to all BC non-medical cannabis license applicants and those who’ve received an “Approval in Principal” (AIP).
While past illegal cannabis market involvement was previously not the sole basis for disqualification, that may change, according the notice:
“The Province is now amending its approach and will, as part of the statutory fit and proper assessment, determine whether individuals are illegally selling, distributing, or supplying cannabis; including through unlicensed cannabis retail stores, contrary to the Cannabis Control and Licensing Act. This may be considered grounds, in and of itself, to find an applicant not fit and proper; and therefore, the basis for denial of a CRS licence application or the revocation of an Approval in Principle (AIP).”
As of March 1, 2020, all new and existing applicants and applicants who’ve received an AIP, must complete a disclosure statement prior to receiving their license.
What Prompted the Policy Change?
On January 20, 2019, the Trees Cannabis chain of dispensaries in Victoria, became the first company in BC fined for selling cannabis without a license. Trees director, Alex Robb, was issued a $1.5 million fine.
According to an article at insidethejar.com, Mr. Robb suggests that the government’s lack of clear policy concerning dispensaries transitioning from illegal to legal operations and an uneven application of the law, led to confusion, a fine, and ultimately, the LCRB policy change, which clarifies the government’s position on past illegal cannabis market activity.
Whether or not the policy change was the result of what transpired with Trees and LCRB (see timeline below), one thing is certain, the BC government seems to be making it more difficult for companies that had once operated illegally to obtain BC cannabis license application approval.
Here’s what happened:
October 15, 2018:
Two days before cannabis legalization in Canada, BC Solicitor General Mike Farnsworth advises illegal cannabis dispensaries to close their doors if they want to apply for a government license to operate a retail cannabis store.
October 17, 2018:
Trees applies for cannabis licenses for 7 of the 8 of its stores.
Trees remains open, seeing that other illegal dispensaries in Victoria were continuing to operate until receiving their AIP. These stores would then close shop and re-open as provincially-licensed cannabis stores.
Early in 2019:
Trees’ pending BC cannabis license applications are deemed complete and await the province to complete financial integrity and security checks.
May 29, 2019:
BC’s Community Safety Unit (CSU) visits a Trees store in Victoria. CSU advises a store manager that that they should stop selling cannabis and close the store until they have obtained a BC cannabis license. Staff at the store inform CSU that the store is awaiting provincial license application approval and will remain open.
July 31, 2019:
One of Trees Victoria locations is raided by CSU and $200,000 of cannabis product is seized. The following day, Trees voluntary closes all 8 of its stores.
LCRB levies a $1.5 million fine nearly 6 months after Trees voluntarily closes its stores.
Applying for a BC Cannabis License? Get Clarity
Following the rules and regulations outlined by the Province is critical to a successful BC cannabis license application. Guesses and assumptions may result in delays, cannabis license application rejection, and severe fines. When in doubt, speak to a cannabis licensing consultant, such as Rebecca Hardin, who has many years’ experience working within LCRB regulations.