Revelstoke council cannabis retail license referral comes with legal threat

Conflict over distance between two cannabis retailers results in a legal threat; local versus outside business a topic of discussion at the council table.

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Revelstoke city council's Oct. 22, 2019 regular meeting was interrupted by an electrical outage, after BC Hydro intentionally cut electrical power to an area including downtown after a propane main was ruptured by an excavator near the corner of Fifth Street West and Mackenzie Avenue. The meeting continued without the main lights. (Due to backlighting, this iPhone photo makes it appear darker than it seemed that day.) Photo: Aaron Orlando/Revelstoke Mountaineer Magazine

One of two cannabis retail application referrals from the B.C. Liquor and Cannabis Regulation Branch before Revelstoke city council on Oct. 22 came with a legal threat.

The first application council considered, for Evergreen Dream Cannabis Co., which plans to open a shop near the corner of Second Street East and Orton Avenue in the former location of the Green Moustache vegan restaurant.

Evergreen’s proposed retail location, which is outside of city cannabis bylaw retail exclusion zones for parks, schools, youth facilities or other cannabis retail locations, was approved by council. The applicant now goes back for further development work with the provincial authority.

It was council’s approval of the second location, for Revelsmoke Cannabis Co.’s proposed 204 First Street West location that was more controversial.

Buffer zone between cannabis retailers at the core of the issue

Photo: Wesley Gibbs

As reported previously in the Mountaineer, Revelsmoke plans to open a cannabis retail shop, but it was slower through the application and approval process than Summit Cannabis Co., which reached this stage in December of 2018, and has been operating around the corner on Connaught Avenue since August 2019.

The city’s 2018* cannabis bylaw established a kind-of 100-metre exclusion zone around another existing retailer.

At the time, staff said they were trying to avoid clustering of cannabis shops into a small area, something that had happened in ski towns in U.S. states that have legal recreational cannabis.

During the city consultation process, the majority of residents preferred more restrictive zoning, although a smaller but significant portion wanted no exclusion zone.

Summit Cannabis Co. was first to open; nevertheless, Revelsmoke  persevered with its application, despite the second retailer being under 10 metres away from Summit, according to how the city calculates the distance. The two storefronts are much further apart on foot as they are located around the corner from each other.

In August 2019, Revelsmoke received a bylaw variance from city council, which varied their minimum required distance from 100 metres to eight metres, a very large variance (which was discussed in this previous Mountaineer story).

At the Oct. 22 meeting, council was considering Revelsmoke’s referral request from the B.C. Liquor and Cannabis Regulation Branch.

Also on the Oct. 22 council agenda, Summit Cannabis Co. had sent in a letter to be included with council’s consideration of the Revelstmoke referral.

The unsigned letter threatens legal action if council gave a positive referral to the Revelsmoke application.

“[We were the] first through the process and the first approved and opened and then to plan for our business based on the existing bylaw only to have the local bylaw simply abolished,” wrote Summit in an unsigned letter that was dated the same day as the council meeting. “We recently have been reviewing our legal rights in speaking with both our internal and external [counsel] and would like to plead with you to not approve this licence. If so we will have no choice but to proceed with all legal options at our disposal to help recoup all revenue lost.”

Council response and discussion

Coun. Cody Younker led the comments at the council, prefacing some statements saying he was expressing personal opinion — a legally debatable caveat in the context of discussion of an agenda item during a council meeting. He said he didn’t appreciate the threatening letter, and that he’d heard more complaints about Summit Cannabis Co.’s application than Revelsmoke Cannabis Co.’s.

“We had more people supporting Revelsmoke, which is a locally owned company by locals that have lived here for a long time, working hard,” Younker said. “Summit is a corporately owned franchise, which I will add, their CEO of the company has blocked me on social media, when previously I was asking questions. So, not a big fan, so I would urge the council to support this and support a locally owned business and do not give into corporate intimidation tactics.”

After some other brief statements by councillors, (the video is below) the item passed unanimously, with Coun. Rob Elliott absent.

Summit Cannabis Co. responds

I contacted Summit Cannabis Co. co-owner Chad Hollett about council’s decision. In essence, he said their position was to not comment on the situation.

However, he had seen the YouTube video of the council meeting and he did want to address comments made by Coun. Younker.

“I don’t know why he thinks it’s a big corporation,” Hollett said. “It’s just myself and two others,” he said, adding he owned a home here. He was concerned about Younker’s statement about Summit and blocking on social media.

(The original application for Summit’s Connaught Avenue location came from an entity operating under the Starbuds brand name; however, in July 2019 the Mountaineer reported that the local proponents had split from Starbuds. A Starbuds spokesperson confirmed that. Their current business structure is unknown to us and is not usually pertinent to zoning discussions.)

Hollett said Summit didn’t want to comment further. “We are going to proceed accordingly,” he said.

Video: The staff presentation and council discussion of the Revelsmoke Cannabis Co. retail license referral starts here:

What’s the risk to taxpayers?

After the meeting, I followed up with the City of Revelstoke interim CAO, Dawn Low, to find out more about the city’s perspectives on the risk.

Had the city sought legal advice after receiving the letter from Summit Cannabis Co. on Oct. 22? Low said not, but added that under the Local Government Act, a development variance permit (DVP), which Revelsmoke obtained, “may vary a provision of zoning bylaw,” and that it must not vary use or density.

At the core of the question is the percentage of variance allowed to Revelsmoke, which was over 90% of the 100-metre exclusion zone. Low said that there are, “no percentage requirements as variances are done on a case by case situation.”

Another question focused on statements at the council table that compared two businesses in a decision that affected both, expressing preference for a “local” business. Is this OK?

“The city is required to provide equity and fairness to all,” wrote Low in response to a question about prohibitions on favouring a local business. “Therefore, favouring one business over another depending on where they lived would be discriminatory.” She also provided links to an example, TILMA, the inter-provincial trade and labour agreement between B.C, Alberta and Saskatchewan, one of many sets of regulations the city and council must operate under.

Low said that councillors are provided orientation and ongoing training on legislation requirements and policies.

What’s next?

Summit Cannabis Co. is located at 109 Connaught Avenue in downtown Revelstoke. Photo: Aaron Orlando/Revelstoke Mountaineer Magazine

The risk of a lawsuit, which are costly and drain staff resources, is a concern for taxpayers, but the situation may fizzle out into nothing. It may end up, as Summit Cannabis Co. signaled in its letter to council, with the company filing against the city. We’ll be sure to update you on future developments when we become aware.

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*The author of this story, Aaron Orlando, served as a Revelstoke city councillor at the time the cannabis regulation bylaw was developed and adopted.

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