Dispensary Owners Raise Questions Over City’s Declustering Process

The city has let dispensaries know they may be shut down for being too close to one another, but some owners aren’t happy with the process.

Budzilla Dispensary Clinic owner Rejean Houle shared the letter he received from the city earlier this week that informed him, due to nearby dispensaries, his business would now enter a “declustering” process to determine if his application would proceed.

Google Maps lists the closest dispensary, Green Cross Society, at 333 m to the northwest of Budzilla, outside the required 300 m radius to comply with bylaws.

Houle asked the city for more information and found the conflict came from a dispensary application, not an existing business.

City project facilitator John Freeman said not all applications for business licenses received by the city by Aug. 21 were, or are, open for business, but all applicants possessed a lease.

But Houle said he knows his neighbourhood and isn’t convinced there could be another dispensary applicant within 300 metres.

“There are no properties able to be leased within 300 metres of my dispensary,” Houle said.  “It feels like we’re competing against a ghost.”

The declustering process will review all dispensaries, operating or proposed, in the area and grade them based on a series of categories, including a special inspection the businesses must undergo at their expense.

“Once your special inspection is complete and you have submitted the required information, city staff will evaluate and score your application using four declustering criteria,” the letter from the city stated.

The declustering criteria are based on a point system, with demerits awarded for if the business is a for-profit venture (+10), if the city has received complaints about the business in the last year (+2), if work had been done without a permit (+3) and if the applicant has a history of poor business practices (+4).

“In each cluster, the application with the fewest demerits can continue in the permits and licensing process at that location,” the letter read. “The other preliminary development permit applications in the cluster will be refused.”

Houle said the process isn’t fair to established businesses, as applicants that haven’t been operating won’t qualify for many of the demerits.

“How can something be inspected if it’s not even open?” Houle asked.

In September, 2014,  Vancouver Police executed a search warrant at Budzilla, “after several complaints were received and an initial investigation raised public safety concerns regarding how the illegal business was operating.”
Chief licence inspector Andreea Toma said the city was aware the declustering system meant fewer demerits could be issued to businesses that had not opened compared to those that were already operating.

“If a business opens without first obtaining the necessary permits and licences, it is indeed possible that the business will attract demerits arising from these violations,” said Toma, in an email.

“A business owner who opens without permissions makes a conscious decision (and presumably does so because of the potential to generate revenue outweighs the risk of enforcement),” said Toma. “Conversely, a business owner who waits for approvals before opening gains a potential advantage from playing by the rules.”

Houle disagreed, and suggested applicants should be penalized with demerits if they aren’t already an established dispensary

“There’s no transparency to the process and it makes [dispensary owners] feel like it’s not a fair competition,” Houle said.

“Bylaw compliance and community fit are important city objectives, so it is quite fair that the declustering system favours those who comply and fit over those who do not,” Toma added.

In August, the city announced it had received 176 applications for medical marijuana-related businesses. The number of existing dispensaries has been estimated at close to 100.