The B.C. Supreme Court has tossed a lawsuit filed by a group of cannabis retailers from the Okanagan that alleged negligence from the province in enforcing regulations of the Cannabis Control and Licensing Act (CCLA).
The suit, filed in 2022 by 14 unnamed Okanagan and Shuswap cannabis stores, was seeking $40 million in damages for “negligent misrepresentation” of the province’s failure to enforce the licensing requirements of the CCLA, specifically along the Okanagan Indian Band’s Westside Road, also referred to as the Green Mile.
The lawsuit claimed that the legal retailers were losing an average of $500,000 a year because the unregulated pot shops on First Nations lands were drawing revenue away from their businesses.
Judge Jasvinder Basran, who oversaw the case, stated in his reason for judgment that “the province cannot control the number of individuals who sell cannabis through unlicensed dispensaries thereby causing licensed retailers to lose profits.”
“The province does not owe a private law duty of care to the plaintiffs.”
Several unlicensed cannabis stores have arisen around the country since federal legalization of the plant in 2018. In 2019, according to the plaintiffs, the B.C government told legal retailers that enforcement measures would be taken against the illicit market on reserves, but those measures never materialized.
Provincial governments are responsible for the implementation of the CCLA, and can enter into agreements with Indigenous nations with regards to selling non-medicinal marijuana. In 2021 and 2022, three Indigenous nations entered into new or updated cannabis agreements with the provincial government.
Basran stated the province could not control the number of stores that would sell cannabis and that enforcement of it, done by the Community Safety Unit, is “discretionary.”
“It is plain and obvious that the Claim does not disclose a reasonable cause of action in either negligence or negligent misrepresentation. The claim is bound to fail.”
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