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Vice - Cannabis. Leandro v. New Tecumseth (Town of)
In Leandro v. New Tecumseth (Town of) (Div Court, 2023) the Divisional Court considers (and allows) an appeal from a denied application for a declaration that a cannabis operation was allowed under a zoning by-law:[1] The Appellant, Mr. Leandro, owns property in the Respondent Town of New Tecumseth (the “Town”). He is also the president of a company that operates a micro-cultivation facility with a license under the Cannabis Act, S.C. 2018, c. 16.
[2] The Appellant’s property is zoned for agricultural use under the Town’s “Zoning By-law”. The relevant bylaw’s definition of “agricultural” excludes a “Medical Marihuana Production Facility.” That by-law was not amended after the passage of the Cannabis Act in 2018, which legalized cannabis for non-medical use.
[3] The Town continued to take the position that anyone seeking to produce and/or process cannabis pursuant to a license issued by Health Canada in an agricultural zone required a Zoning By-law amendment.
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The Zoning By-law does not prohibit the operation of a micro-cultivation facility pursuant to a licence issued under the Cannabis Act
[43] The modern principles of statutory interpretation apply to the interpretation of a municipal by-law. Thus, the interpretation of a by-law involves consideration of the text of the by-law, the intent of the municipal council, and the purpose and scheme of the by-law as a whole: see St. Mary’s Cement Inc. (Canada) v. Clarington (Municipality), 2012 ONCA 884, 356 D.L.R. (4th) 448, at para. 17.
[44] For ease of reference, the relevant text of the Zoning By-law is reproduced again below.
[45] The Zoning By-law sets out the following with respect to the use of property that is designated as agricultural:A use of a lot, building or structures for the purpose of the growing of field crops, flower gardening, truck gardening, berry crops, forestry, mushroom farming, tree crops, nurseries, aviaries, apiaries, removal of sod or farms for the grazing, breeding, raising, boarding of livestock, or any other similar uses carried on in the field of general agriculture, including selling, packaging, treating, warehousing, or sorting of produce, crops or livestock produced. “Agricultural” shall have a corresponding meaning. The definition shall not include a Medical Marihuana Production Facility. [46] It goes on to describe an “agricultural processing facility” in the following terms:A lot, building or structure used for the processing of products directly derived from agricultural, including forestry, and may include the processing, storage and transport of such products locally grown. The amount of water required for processing shall not exceed 4,500 cubic litres per day. [47] As already noted, the Town does not dispute the following facts:(a) Marihuana is a “field crop”
(b) Mr. Leandro’s micro-cultivation processing facility requires considerably less than 4,500 cubic litres of water per day; and
(c) Mr. Leandro’s facility is not a Medical Marihuana Production Facility. [48] Given this, the express language of the Zoning By-law would suggest that it does not prohibit the activity that Mr. Leandro is engaged in on his Property.
[49] The Town disagrees. In doing so it argues that the language of the by-law encompasses not just a Medical Marihuana Production Facility, but any cannabis production facility that operates pursuant to a license granted by the federal government. In making this submission the Town relies on the definition of Medical Marihuana Production Facility contained in the by-law. That text reads:“Medical Marihuana Production Facility” shall mean the use of land, building or structure to possess, produce, sell, provide, ship, deliver, transport, test or destroy medical marihuana or cannabis authorized by a license issued by the federal Minister of Health, pursuant to Section 25 of the Marihuana for Medical Purposes Regulation, SOR/2013-119, under the Controlled Drugs and Substances Act, SC 1996, as amended from time to time. [50] The Town points to the phrase “medical marihuana or cannabis” and the fact that the activities are authorized by a license issued by the federal Minister of Health to argue that the use of the word “Medical Marihuana Production Facility” encompasses the activity being carried on by Mr Leandro. He is operating a facility that produces cannabis pursuant to a license issued by the federal government.
[51] The problem with this submission is that even if it could be argued that the phrase “medical marihuana or cannabis” could be taken as denoting either “medical marihuana” or “cannabis” as opposed to “medical marihuana” or “medical cannabis” (which I do not accept), the definition is very specific as to the type of license that must be in place to capture the activity in the definition. It is a license issued under s. 25 of the Marihuana for Medical Purposes Regulation ( which has since been repealed). Mr. Leandro’s license was not issued under this regulation. Therefore, his activity is not captured under the definition of “medical marihuana production facility.”
[52] The Town also argues that even if the exact words of the by-law do not capture the activities at issue, the law requires that courts not be too technical when interpreting municipal by-laws. They should be read broadly and purposively with a view to ensuring that the legislative intent of the council that passed the by-law is achieved.
[53] The Town submits that the legislative intent of the council that passed the Zoning By-law in 2014 is clear. It wished to treat cannabis production in a way that was different from other farming activities because of the concerns it had about security, light and odour. Thus, it was not prepared to permit cannabis growing or production on any property zoned “agricultural”. It was only prepared to do so in certain areas that were zoned “industrial”.
[54] The Town states that the Zoning By-law was prompted by federal legislation that permitted individuals and entities to produce medical marihuana pursuant to a federally issued license. Council had concerns and asked the Town staff to provide options for the appropriate zoning of this type of facility.
[55] Town staff prepared a report, which is dated May 5, 2014 (the “Report”). The Town relied on the Report to support its submission that there was clear evidence that the intention of the Town when it passed the Zoning By-law was to limit all cannabis growing and production to certain areas that were zoned “Industrial”.
[56] The Report’s stated objective is to “seek Council direction regarding Medical Marihuana Production Facilities in the Town”. Neither the objective nor the Report make any reference to any other kind of cannabis production facilities; not surprising since when Report was prepared, and the Zoning By-law passed there were no other cannabis production facilities that could be licensed under federal legislation.
[57] The Report went on to discuss the fact that the definition of “agriculture” in place at the time could be interpreted as permitting Medical Marihuana Production Facilities as an “agricultural” use.
[58] In discussing the proposed facilities, the Report makes it clear that Medical Marihuana Production Facilities “require producers to obtain licenses from Health Canada that will only allow for large scale production of medical marihuana facilities”.
[59] Mr. Leandro possesses a license to operate and own a micro-cultivation facility. The restrictions in effect for this type of facility necessitate that they operate on a much smaller scale than Medical Marihuana Production Facilities. For instance, the holder of micro-cultivation license must clearly delineate a surface area (also know as “canopy space”) that does not exceed 200 square metres. The license-holder can only cultivate, propagate, or harvest all of part of the cannabis plant within the canopy space. Mr. Leandro operates his facility in an air-conditioned building. Further, of the 278 square metre canopy space allowance to grow the cannabis crop in the building, only 176.5 square metres are being utilized.
[60] The Report then goes on to give Council several options for dealing with Medical Marihuana Facilities, the first of which was that the definition of agriculture in the Zoning By-Law be amended to exclude them. This is the option Council adopted.
[61] The Report offers no basis for finding that there is evidence that Council’s intention in passing the Zoning By-law was to exclude other smaller types of marihuana production facilities. Again, it is difficult to find that such an intention could have existed when at the time that the Zoning By-Law was passed no other types of cannabis production facilities were legal under federal law.
[62] Thus, contrary to the submissions of the Town, there is no evidence that when the Town Council passed the Zoning By-law their intention was to prohibit the location of any cannabis production facility in an area zoned as agricultural. Therefore, there is no need to distort the express wording of the Zoning By-law to give effect to an intention that may not have been clearly expressed. From the evidentiary record before us, the intention of Council when it passed the Zoning By-law was to prohibit large scale Medical Marihuana Production Facilities from being located on land zoned as agricultural. It was not to prohibit a facility such as Mr. Leandro’s, which is a smaller micro-cultivation facility. . R. v. Williams
In R. v. Williams (Ont CA, 2023) the Court of Appeal considered a police search under Ontario's Cannabis Control Act, 2017 ('CCA'):Did the trial judge err in his assessment of the legality of the search under the CCA?
[58] Despite my disposition of the first issue, I agree with the trial judge that the officers had a legal basis to search the appellant’s vehicle pursuant to the CCA.
[59] Sections 12 (1)-(3) of the CCA provide:(1) No person shall drive or have the care or control of a vehicle or boat, whether or not it is in motion, while any cannabis is contained in the vehicle or boat.
(2) Subsection (1) does not apply with respect to cannabis that,
(a) is in its original packaging and has not been opened; or
(b) is packed in baggage that is fastened closed or is not otherwise readily available to any person in the vehicle or boat.
(3) A police officer who has reasonable grounds to believe that cannabis is being contained in a vehicle or boat in contravention of subsection (1) may at any time, without a warrant, enter and search the vehicle or boat and search any person found in it. [60] The authority to search under s. 12(3) allows a search of bags readily accessible to the occupant of the vehicle, even if fastened closed: R. v. Phillips, 2021 ONSC 5343, at paras. 56, 61-62. The satchel in which the firearm was found was open and readily accessible to the appellant from the driver’s seat. . Registrar, Alcohol and Gaming Commission of Ontario v. Giesz-Ramsay
In Registrar, Alcohol and Gaming Commission of Ontario v. Giesz-Ramsay (Div Court, 2023) the Divisional Court considers the Alcohol and Gaming Commission of Ontario's (AGCO) JR application of a LAT ruling that set aside a "Notice of Proposal to Refuse Licence", here for a 'cannabis retail manager' [under s.5(6) of the Cannabis Licence Act, 2018 (CLA)].
In these quotes the court considers the appropriate LAT standard of proof, which by virtue of s.5(4)1 of the CLA, is "reasonable grounds to believe":Did the LAT Apply the Wrong Standard of Proof?
[13] The AGCO takes the position that in applying s. 5(4)1 of the Act, the LAT erred by applying a standard of proof on a balance of probabilities as opposed to the “reasonable grounds to believe” standard. The AGCO submits that the evidence of the Respondent’s past criminal convictions, public defiance of the law, and promotion of her illegal cannabis dispensaries amply met the “reasonable grounds to believe” standard. The AGCO submits that had the LAT applied the proper standard of proof, it could not have concluded that there were not reasonable grounds to believe that the Respondent would not act in accordance with the law.
[14] I disagree that the LAT applied a standard of proof on a balance of probabilities or a standard higher than that required by s. 5(4)1 of the Act. The LAT, citing the Court of Appeal’s decision in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc., 2013 ONCA 157, correctly noted that the “reasonable grounds for relief” standard of proof is lower than proof on a balance of probabilities. The LAT recognized that the standard requires “more than mere suspicion and an objective basis for the belief based on compelling and credible information.”
[15] The AGCO’s submission suggests that once it had adduced evidence of the Respondent’s past convictions and activity, the LAT was compelled to find that the “reasonable grounds to believe” standard was met. This submission fails to take into consideration the substantial evidence that the Respondent adduced before the LAT. The LAT found that despite the Respondent’s past criminal convictions and conduct, she had demonstrated a change in perspective regarding the necessity of complying with the law, as evidenced by her testimony and her conduct since her convictions. In applying the “reasonable grounds to believe” standard, the LAT was entitled, if not required, to weigh the entirety of the evidence before it, including the Respondent’s past or present conduct.
[16] The LAT did not err in law by applying a higher standard of proof than that required by s. 5(4)1 of the Act. Nor did the LAT misapply the “reasonable grounds to believe” standard which, in any event, would have constituted an error on a question of mixed fact and law (rather than an error of law) that would not be subject to appeal. . Registrar, Alcohol and Gaming Commission of Ontario v. Giesz-Ramsay
In Registrar, Alcohol and Gaming Commission of Ontario v. Giesz-Ramsay (Div Court, 2023) the Divisional Court considers the Alcohol and Gaming Commission of Ontario's (AGCO) JR application of a LAT ruling that set aside a "Notice of Proposal to Refuse Licence", here for a 'cannabis retail manager' [under s.5(6) of the Cannabis Licence Act, 2018 (CLA)].
These quotes are illustrative of the licence refusal procedure of the CLA in an ethics-grounded case:[4] On July 8, 2022, the AGCO issued the Notice under s. 5(6) of the Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2 (the “Act”), proposing to refuse to the licence because of “reasonable grounds to believe that the applicant will not, in acting as a cannabis retail manager, act in accordance with the law, or with integrity, honesty or in the public interest, having regard to the past or present conduct of the applicant” as provided in s. 5(4)1 of the Act. The AGCO found the Respondent was not entitled to a licence as a cannabis retail manager because she operated illegal cannabis dispensaries in the past and because of her convictions in 2017 for possession of cannabis and proceeds of crime. As set out in the Notice, the Respondent had a right to a hearing before the LAT regarding the proposed refusal of a licence under s. 14 of the Act.
The Decision
[5] On August 9, 2022, the Respondent requested a hearing before the LAT under s. 14(2) of the Act, seeking to set aside the Notice on the basis that her criminal record and related past conduct did not render her ineligible for a licence as a cannabis retail manager.
[6] Subsection s. 15(3) of the Act provides that in setting aside a proposal or decision, the LAT may substitute its opinion for that of the Registrar. After a two-day hearing, the LAT set aside the Notice and directed the AGCO to issue a cannabis retail manager licence without conditions to the Respondent.
[7] In the Decision, the LAT observed that pursuant s. 5(5) of the Act, the honesty and integrity provisions of the Act do not prevent the issuance of a licence to an applicant, even if they have been convicted of or charged with a prescribed offence in relation to cannabis under the Controlled Drugs and Substances Act, S.C. 1996, c. 19. The LAT concluded that the AGCO failed to demonstrate reasonable grounds for belief that the Respondent would not, acting as a cannabis retail manager, act in accordance with the law, or with integrity, honesty or in the public interest, having regard to her past or present conduct.
[8] In detailed reasons, the LAT considered the evidence submitted by both parties. The LAT heard testimony from witnesses, who were examined and cross-examined, including the Respondent. The LAT noted that the Respondent acknowledged her convictions and sentence and provided the AGCO with a copy of the transcript of the guilty plea proceedings. The LAT found that the Respondent “repeatedly” expressed remorse for her actions and emphasized that if she received a licence, she would comply with any terms and conditions.
[9] The LAT further found that the AGCO failed to submit any evidence that the Respondent could not or would not comply with a specific condition on her licence or with the requirements of any of the duties and responsibilities of a retail cannabis manager as set out in the Act and regulations. . Stuckless v. Canada (Attorney General)
In Stuckless v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered an appeal from a dismissal of a JR of a decision under the federal Cannabis Act[1] Mr. Stuckless appeals from a judgment of the Federal Court (2021 FC 1062) dated October 12, 2021, dismissing his application for judicial review of a decision of the Acting Director General, Controlled Substances and Cannabis Branch, Health Canada. The Acting Director General refused to grant Mr. Stuckless a security clearance under subsection 67(1) of the Cannabis Act, S.C. 2018, c. 16 and section 53 of the Cannabis Regulations, SOR/2018-144, after finding that he posed an unacceptable risk to public health or public safety, including the risk of cannabis being diverted to an illicit market or activity. . R. v. St. Clair
In R. v. St. Clair (Ont CA, 2021) the Court of Appeal engaged in an interesting review of some of the current regime regarding marijuana laws:Overview of the regulatory regime
[16] Prior to the decriminalization of the possession of marijuana for non-medical purposes in 2018, the regulatory regime governing possession of marijuana for medical purposes was continually in flux. At the time of the appellant’s arrest, possession of marijuana remained an offence, with an exemption for medical use set out by the Regulations. The Regulations were repealed in 2018 when Parliament enacted the Cannabis Act, S.C. 2018, c. 16.
[17] The Regulations established a regime in which health care practitioners could authorize persons under their professional treatment to possess and consume specified quantities of cannabis as part of that professional treatment: Regulations, ss. 3, 7, and 8. Section 7 required health care practitioners to provide a “medical document” to persons under their treatment. Section 8 required the document to set out the practitioner’s contact and professional registration number, the name and contact details of the person under their care, and the daily quantity of marijuana that the person was authorized to use over a specified time period. Section 8(4) required the medical document to be signed and dated by the practitioner providing the document.
[18] A person furnished with a s. 8 medical document authorizing use of marijuana would be eligible to apply to a licensed producer to be registered as a client of that producer: Regulations, s. 130. An applicant would be required to provide the producer with the applicant’s original medical document and certify the accuracy of the information it contained.
[19] If the applicant was accepted as a client, the producer would be required to provide the client with a “registration document” containing information including the name of the producer, the name of the client, the client’s date of birth and address, and a unique identifier number: Regulations, s. 133.
[20] The Regulations established labelling requirements to be attached to the container of the marijuana products provided to the client. This included a label stating, among other things, the name, telephone number, and email address of the producer: Regulations, s. 84(1). Additionally, the producer was required to attach a client label stating the client’s name, the name of the health care professional who provided the client’s medical document, the name of the licenced producer, and the authorized quantity as set out on the client’s medical document. The producer was also required to provide the client with a separate copy of the client label: Regulations, 87(1)(b).
[21] A person authorized to possess marijuana under the Regulations was required, on demand, to “demonstrate to a police officer that the possession or production is authorized”: Regulations, s. 15. Similarly, a licenced producer was obligated, at the request of the police, to disclose whether a person was a client of the producer and what substance and daily quantity was authorized by the medical document issued to that person: Regulations, s. 121(1).
[22] The Regulations did not specify what would constitute a sufficient demonstration that a person’s possession of marijuana was authorized. . Fox North Bay Inc. v. Registrar (Alcohol and Gaming Commission of Ontario)
In Fox North Bay Inc. v. Registrar (Alcohol and Gaming Commission of Ontario) (Div Court, 2022) the Divisional Court reviews some basics of the liquor and cannabis regimes in Ontario, here in a judicial review application:The Statutory Context
[6] The Alcohol and Gaming Commission of Ontario ("AGCO") is established by the Alcohol and Gaming Commission of Ontario Act[2], as a Crown agent statutorily empowered to administer and enforce the LLA and Cannabis Licence Act ("CLA")[3]. Sellers who want to sell liquor or cannabis must apply for and obtain a licence or permit under the respective act. Under the CLA¸ a seller must obtain two licences, one for the store and one for the manager. The Registrar enforces the acts through monetary penalties, refusing new applications, or granting applications with conditions.
[7] Pursuant to the LLA and the CLA, the Registrar may impose conditions on a licence to which the licence holder has not consented by two different procedural choices:1) by issuing a Notice of Proposal which entitles the licensee to a hearing before the License Appeal Tribunal ("LAT") conducted in accordance with the Statutory Powers Procedure Act[4] and a further right to appeal on a question of law to the Divisional Court; or
2) pursuant to a regime created in 2006 referred to as Risk Based Licensing ("RBL"), provided for in the LLA and CLA to mitigate foreseeable risk, permitting the Registrar to make a decision imposing conditions with no right to a hearing or right of appeal. [8] The Registrar has the same procedural choices to proceed by way of Notice of Proposal or Risk Based Licensing where, as in the instant case, an application is made to transfer a licence pursuant to s.17 of the LLA.
[9] In determining whether to afford an applicant the right to a hearing, or to proceed pursuant to RBL, the legislation is silent on the criteria to be considered by the Registrar. Similarly, in determining whether there has been a "change in circumstances", the only avenue provided to remove a condition imposed under RBL, the legislation is silent on the criteria to be applied. A representative of the AGCO, Ms. Stephanie Balaban, who was called by the respondent to explain the RBL system, further confirmed that there are no directives, guidelines, benchmarks or standards in existence as to the criteria to be applied by the Registrar in making the procedural choice to deny a right to a hearing, or in determining whether there has been a "change in circumstances".
[10] The Liquor Operations Manual ("LOM")[5] intended to guide Staff through the process of administering applications under the LLA provides no guidance respecting the Registrar's discretion to deny an applicant a right to a hearing, or the Registrar's discretion respecting what constitutes a "change in circumstances".
[11] When RBL came into effect, a Policy Paper[6] presented to the AGCO Board, stated that "the hearing process [Notice of Proposal] will be used for matters that involve greater public safety and public interest risks, or where there is an enhanced level of risk of noncompliance" and that "less significant changes in circumstances will be managed by redesignating the license and adding, removing or changing conditions on the license [RBL]."
[12] The risk criteria established by the AGCO Board for RBL include past conduct and infractions against the applicant. The most serious infractions include intoxication (over-service of alcohol), disorderly conduct, sale and service to minors, over-capacity, and selling outside prescribed hours or conditions of licence. The Board has specified 89 LLA conditions and 33 CLA conditions that the Registrar can impose under RBL. The Registrar may designate licence-holders according to risk level pursuant to the criteria established by the Board, and impose conditions specified by the Board (LLA s. 8.1(3); CLA s. 6(6)). The Registrar can redesignate a licensee's risk level and remove or change a condition imposed under the RBL regime if there is a change in circumstances (LLA s. 8.1(4); CLA s. 6(6)). . D. Michael Goldlist v. Registrar, Alcohol, Cannabis and Gaming Regulations and Public Protection Act
In D. Michael Goldlist v. Registrar, Alcohol, Cannabis and Gaming Regulations and Public Protection Act (Div Ct, 2022) the Divisional Court heard an appeal under the Cannabis Licence Act, where they have that odd 'Notice of Proposal to refuse' procedure you see in license regimes sometimes [I last saw it in the Motor Vehicles Dealers Act, s.9 regarding registrations of MV dealers]:Statutory Scheme
[8] The statutory scheme for the regulation of the sale of recreational cannabis in Ontario is set out in the Cannabis Licence Act, 2018 c. 12, Sched. 2 (the “Act”) and O. Reg. 468/18, General (the “Regulation”) made under the Act. The Alcohol and Gaming Commission of Ontario (“AGCO”) is responsible for administering the Act and the Regulation.
[9] Cannabis may only be sold at an authorized retail store. In general, each authorized retail store requires at least one CRM. There are various responsibilities that can only be performed by a CRM, though a CRM licence is not required for an individual to work at an authorized store.
[10] Section 5(4) of the Act provides that an applicant is not eligible for a CRM licence in certain circumstances, including where there are “reasonable grounds to believe that the applicant will not, in acting as a cannabis retail manager, act in accordance with the law, or with integrity, honesty or in the public interest, having regard to the past or present conduct of the applicant.”
[11] Pursuant to s. 5(5) of the Act, however, s. 5(4) “does not prevent the issuance of a cannabis retail manager licence to an applicant if the applicant has been convicted of or charged with a prescribed offence under the Controlled Drugs and Substances Act (Canada) in relation to cannabis.” Those prescribed offences include possession, trafficking, production, and possession or sale for use in production or trafficking of cannabis.
[12] If the Registrar intends to refuse to issue a licence, it must issue a Notice of Proposal to the applicant with written reasons. Pursuant to s. 14(2) of the Act, an applicant may request a hearing before the Licence Appeal Tribunal within 15 days of being served with the Notice of Proposal; otherwise the Registrar may carry out the proposal. Pursuant to s. 15(2) of the Act, the Tribunal may confirm or set aside the Registrar’s proposal or direct the Registrar to take any action specified by the Tribunal that it considers appropriate. The rest of the case is a useful consideration of a Divisional Court-level cannabis licence appeal, which are relatively new.
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