By the end of the summer in 2018, the Federal and Provincial governments of Canada will have enacted legislation that permits the legal selling, consumption and production of recreational cannabis. As this societal change funnels down to Ontario communities, municipal approaches to regulating land use will determine the impact of cannabis legalization on Ontarians. Land use controls are crucial for municipalities to regulate for the social health and well-being of their communities amid this change.
How cannabis will be sold in Ontario communities
Cannabis retailing will be accomplished by a provincial cannabis retailer, as required by Ontario’s Cannabis Act, 2017 (the “Act”). To accomplish this, Ontario has created an organization called the Ontario Cannabis Retail Corporation (OCRC) through legislation known as the Ontario Cannabis Retail Corporation Act, 2017 (the “OCRCA”). The OCRC will operate stores called the Ontario Cannabis Store (OCS). The OCRC will open 40 OCS stores across the province by the end of July 2018 with a further 40 stores planned to open through 2019. Online retailing will also take effect by July 2018.
The purposes of the Act include establishing prohibitions relating to the sale, distribution, purchase, possession, cultivation, propagation and harvesting of cannabis in order to (i) protect public health and safety; (ii) protect youth and restrict their access to cannabis; and (iii) ensure the sale of cannabis in accordance with the OCRCA. The Act also aims to deter illicit activities in relation to cannabis through appropriate enforcement and sanctions. It also will provide for approved youth education or prevention programs, including culturally appropriate programs for Indigenous youth, as an alternative to enforcement and sanctions.
Location of cannabis retail stores
A central issue that has emerged is the location of future OCS outlets. The OCRCA establishes the organization’s mandate and set out its goals. Among OCRC’s legislated objects stated in section 4 of the OCRCA is the object of promoting social responsibility in connection with cannabis, a goal seemingly in harmony with municipal powers to pass by-laws in respect of social well-being of the municipality and the health, safety and well-being of persons.
Municipal zoning and business licensing will be important in regulating the location of OCS outlets. Zoning by-laws can reduce the friction between cannabis retail uses in order to mitigate community backlash against the perceived impact from OCS locations. Specific land use requirements may require minimum distances of cannabis retail locations from schools, playgrounds, places of worship and community centres. Other actions could be to introduce new zoning classifications to distinguish cannabis retail from other types of retail, limit the amount of cannabis retail locations in a given area and set certain retail mixes apart. Another tack taken is to prohibit retail cannabis entirely, an approach demonstrated in the City of Brantford’s zoning by-law.
Both the OCRC and municipalities are implicated in establishing proper site locations for the OCS. This may be a difficult exercise. Backlash from neighbours was swift when the first OCS store location in Toronto that was announced was only 450 metres from an elementary school. Under that standard, it will be nearly impossible in urban areas to establish sufficient separation of uses from schools as many uses are clustered tightly together.
Zoning for cannabis consumption
In addition to the location of retail stores, municipalities have begun considering options for permitting consumption of cannabis in lounges and cafes. At the moment, section 11 of the Act restricts the consumption of cannabis in public places, workplaces, vehicles, or a place prescribed by regulations. The remaining locations available to consume cannabis are private locations such as a person’s residence. Exemptions will need to be prescribed or the Act will need to be modified to permit cannabis lounges or other communal consumption areas. The Province has begun consultation on potential legislative amendments to section 11 of the Act.
If public cannabis consumption becomes permissible in the future, approaches to cannabis culture could vary. In some municipalities, cannabis lounges will be precluded in the future by municipal by-laws on the basis of health and safety. Hookah lounge bans have been enacted on this basis, such as the City of Toronto’s ban that was litigated and upheld by the Ontario Court of Appeal. However, not all municipalities may be opposed and they may in fact encourage the proliferation of cannabis lounges. For instance, Niagara Falls is canvassing the possibility of cannabis lounges as a tourist draw.
Cannabis cultivation controlled by land use regulation
Ontario communities are also worried that the lucrative cannabis market will result in the conversion of existing agricultural uses to cannabis production. Under many municipal zoning laws, the “agricultural” land use designation is defined broadly enough to permit cannabis growing as a crop. There is a fear that cannabis production will result in food crops being pushed out by commercial cannabis farms and greenhouses. Municipalities who wish to protect agricultural lands can enact amendments to their zoning by-laws to limit the areas where cannabis production can take place, limit the permitted size of cannabis production facilities, or reclassify cannabis production to an industrial use.
A useful example of all three approaches is the City of Toronto’s approach to zoning for medical marijuana production. In 2014, the City of Toronto enacted amendments to its zoning by-law that placed medical marijuana production facilities into a specific use category. The medical marijuana production facility specific use category requires an increased setback from neighbouring zones, as well as separation distances from other uses such as schools, places of worship and nurseries. There are additional regulations for locating ancillary structures on site. As a completely urbanized municipality, the medical marijuana production facilities are located in employment industrial zones.
Small-scale cultivation may also create unique problems. Proposed federal legislation will permit each individual to grow up to four cannabis plants at their home. Municipalities may need to institute additional zoning controls to mitigate the potential for nuisance claims between neighbours when cannabis is cultivated at home.
Conclusion
Land use implications for production, retail and consumption of cannabis will require municipalities to fine-tune their zoning by-laws to achieve the proper integration of cannabis retail, consumption and production with their communities. Placement of OCS locations must take into account sensitive uses while also realizing that complete separation is unrealistic in urban areas. Sensitivity to community desires will be particularly needed when establishing zones permitting cannabis lounges, if future legislation permits. Properly zoning for cultivation of cannabis will also be important where municipalities want to protect agricultural uses.
With whatever approach is taken, time is running out for municipalities to enact by-laws before OCS stores and recreational cannabis producers become established. Delays to amending zoning by-laws will see municipalities risk having these establishments continuing as legal non-conforming uses when recreational cannabis becomes legal in 2018.
About the author
Michael Mahoney is an associate in the Municipal, Planning & Environmental Group at Cassels Brock. His practice encompasses all aspects of land development law, including work for both private and public sector clients.