VANCOUVER (Reuters) - Vancouver city councillors voted on Wednesday in favor of new rules for licensing marijuana dispensaries, despite objections from the federal government, becoming the first Canadian city to regulate retailers selling the drug.
The bylaw, part of an effort to slow the thriving but so-far unlicensed industry in Vancouver, comes as the number of shops selling everything from joints to marijuana-infused lollipops has jumped to roughly 100 from about 10 five years ago.
Under the new rules, the city will charge dispensaries a C$30,000 ($24,197) annual licensing fee, restrict where shops can locate, and require criminal record checks on staff. The rules also ban the sale of most 'edibles,' marijuana-infused brownies and candy, because they may appeal to children.
"We think it's a great first step," said Jamie Shaw of the B.C. Compassion Club, Vancouver's oldest dispensary. "Hopefully, in the coming months, we can work with the city to iron out some things."
One of Shaw's concerns is that the nearly 20-year-old dispensary is across the street from a school, and will be forced to relocate under the new rules. She also hopes they can continue providing baked goods to patients who cannot smoke cannabis.
The drug technically remains illegal in Canada, with the exception of medical marijuana, which is used to manage chronic pain and treat conditions such as arthritis.
Vancouver dispensaries say they sell marijuana for medical purposes, but they operate outside the federally regulated system, which provides the drug to some 40,000 licensed users through a mail order service.
Canada's Health Minister, Rona Ambrose, said in a statement she was "deeply disappointed" with the city's decision, noting that smoking marijuana has been shown to have negative health consequences for youth.
"Storefronts selling marijuana are illegal and under this Conservative Government will remain illegal," Ambrose said, repeating earlier comments. "We expect the police to enforce the law."
The Vancouver Police Department has said it will not crack down on dispensaries as long as they do not sell to minors and are not selling other illicit drugs.
City Councillor Geoff Meggs called the federal government's position "backwards and destructive."
"Wake up, you are completely out of touch with the realities on the ground," he said.
Vancouver councillors voted 8-3 in favor of the new rules, which were amended after public hearings to create a two-tier system, allowing "Compassion Clubs" to pay a licensing fee of just C$1,000. The clubs are non-profit societies that also offer subsidized health services to screened clients.
Reporting by Julie Gordon; Editing by Lisa Shumaker and Andre Grenon