Okanagan pot shops suing province over unlicenced stores on reserves
A group of cannabis stores in the Okanagan and Shuswap has launched a $40 million legal case against the provincial government because of its failure to close down unlicensed weed stores operating on First Nations reserves.
According to a notice of claim filed in B.C. Supreme Court April 27, the stores say they are losing $500,000 a year in revenue because of competition from unlicensed and unregulated pot shops on reserves.
The suit lambastes the provincial government for its lack of enforcement against the unlicensed pot shops.
"The (provincial government) took no actions whatsoever on their own initiative to control sales by illicit retailers on reserves," the notice of claim reads. "The (cannabis stores) state that the (provincial government) were grossly negligent in allowing the continued sale of cannabis by illicit retailers despite knowing the deleterious effect on the legal retail industry."
The legal suit was filed by 14 cannabis businesses against the Attorney General of B.C., the Minister of Public Safety, and the province's cannabis enforcement department, the Community Safety Unit.
The cannabis stores range in location from the Shuswap to Penticton and include stores in the North Okanagan, Vernon and Kelowna.
The stores do not list their trading names, only their B.C. business numbers.
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The notice of claim says that the provincial government is well aware of unlicensed stores operating on reserves and has done nothing to stop it.
The suit points out that even the government's own estimates stated there are 50 to 100 unlicenced stores operating on reserves, although now there are many more than that.
Shortly after legalization, half a dozen pot shops opened up on the Okanagan Indian Band land on the west of Okanagan Lake. The area soon got the nickname "The Green Mile."
Others quickly followed around Enderby and in the Penticton area.
Since unlicensed pot shops sprung up on reserves following legalization, much of the argument surrounding their legal status was that these stores didn't need a licence as they were not under the authority of the provincial government.
However, the notice of claim disputes this.
"The Cannabis Control and Licensing Act applies equally to all territory of British Columbia, including Indian 'Reserves' as defined under the Indian Act," the suit claims. "The Cannabis Control and Licensing Act applies directly to Indians of its own force, as it does not invade exclusive federal authority over Indians or their lands."
The notice of claim says that since legalization the province has taken enforcement against 70 unlicensed cannabis retailers and removed approximately $25 million worth of cannabis from the illicit market.
But the court document says that 170 unlicenced stores have been closed down, almost none of these were stores operating on reserves.
"The illicit retailers sell black market products or illegally obtained product that has not been purchased from the British Columbia government as required under the (Cannabis) Act, nor authorized for sale under the Cannabis Act," the notice of claim reads.
The court documents go on to say the provincial government is "permitting" the unlicensed retailers to operate in a manner that is "circumventing and disregarding, and entirely contrary to, the prevailing legislative and regulatory regime" in B.C.
The stores are arguing for $40 million in compensation for the loss of income resulting from the "negligent failure" of the province to enforce its own rules.
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