1. When Does Your Marijuana Grow-Op Become a Processing Facility? The Importance of Considering Zoning By-laws when Growing Cannabis

    The legality of cannabis through Bill C-45 has created some unique challenges for many professionals, including real estate agents.

    One such challenge arises when your clients express a desire to start growing large quantities of cannabis plants for their personal consumption. It is important that your clients are not only in compliance with their growing licenses, but also with local zoning by-laws, failing which, your client’s actions can result in them facing significant challenges and costs.

    FACTUAL CONTEXT

    In the case of Tay (Township) v. Fan, 2018 ONSC 6375, the Township moved for an interlocutory injunction to restrain the occupants of a residential household from growing, cultivating, or otherwise producing marijuana. The injunction was granted by Justice Boswell due to the Respondents’ violation of the Township’s Zoning By-laws regarding the permitted usage of a Village Commercial “C1” Zone residence.

    The concern was not with the growing of marijuana per se, rather the amount being grown. The Respondents were growing over 800 cannabis plants inside of their residence which raised concern over whether the property was being used as a production facility. The Township’s by-laws explicitly list the permitted uses of a C1 Zone residence. Due to the scale of the growing operation, the Township argued that the residence was, in fact, being used as a “Processing Facility” which violated the permitted uses of a C1 Zone property under the General Zoning By-Law 2000-57.

    Although the scale of the operation was unquestionably large, the Respondents requested that the court interpret their activities as something other than a processing facility. One of the Respondents, “VD”, claims to regularly consuming roughly 50 grams of marijuana per day for medicinal purposes to treat sleep disorder, anxiety, high blood pressure and other circulatory issues. VD is not only permitted to grow 146 cannabis plants for himself, but is also authorized to grow 244 plants for each of the three co-respondents. As for the accusation that the residence was being used as a processing facility, the Respondents’ argument was that the by-law is vague and ambiguous when it came to determining the threshold of what constitutes a “Processing Facility”. Moreover, the Respondents argued that a processing facility is one that grows marijuana to be sold to multiple parties, which they claim is not the objective of their growing operation.

    GOVERNING PRINCIPLES

    Justice Boswell relied upon the three-part test enunciated in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 to determine whether the Township’s request for an interlocutory injunction was appropriate. In this regard, he considered the following questions:

    i) Does the township have a serious issue to be tried?
    ii) Will the township suffer irreparable harm if the injunction is not granted?
    iii) Does the balance of convenience favour the granting of the injunction?

    Briefly, Justice Boswell answered these three questions as follows:

    i) Does the Township have a serious issue to be tried?

    Due to the “serious issue to be tried” threshold being quite low, the courts must look for something more substantial, a likelihood that the injunction will succeed at trial. The Township has successfully shown that it has a prima facie case by demonstrating that marijuana production is the predominant, if not the sole, present use of the property.

    Although the threshold of what constitutes a “processing facility” may not be entirely clear, this does not make the by-law ambiguous. It is beyond question that 800 plants is a large-scale operation, and clearly constituted the predominant use of the property.

    ii) Will the Township suffer irreparable harm?

    Evaluating irreparable harm is applied differently when the issue is the enforcement of a municipal by-law. The Court acknowledged that the township enacted the Zoning by-law with the intention to ensure the public good, and has a duty to enforce it. On this basis, the court found that the Township would suffer irreparable harm.

    iii) Does the balance of convenience favour the granting of the injunction?

    This section of the test appeals to the Respondents’ argument that the granting of an injunction would be significantly more inconvenient for the Respondents than to the Township. After all, the property is not located in a particularly dense neighbourhood, and there have only been a few complaints of a strong odour emanating from the property. However, Justice Boswell emphasized the importance of the Township’s ability to uphold the jurisdiction of its by-laws and that the Township’s ability, to that end, would be severely undermined if the injunction was not granted.

    Based on the results of Justice Boswell’s analysis, the interlocutory injunction was granted, and VD was required to cease his growing operation, and relocate to another licensed facility in a properly zoned area.

    COMMENTARY

    In the post-Bill C-45 era, it is important to consider all aspects of the law to fully understand your client’s rights to grow marijuana. Although Bill C-45 grants Canadians rights to possess, produce, and consume certain amounts of marijuana, there are many other aspects of the law that one must be cognizant of when advising clients. Ensuring that you understand the requirements of your clients, as well as the potential limitations that they may face with respect to the use of their property, are integral parts of your role in finding your clients suitable property, as demonstrated in this case. Failure to comply with local by-laws may result in stiff fines, re-location, and legal costs for your clients.

    This particular case emphasizes the fact that municipal by-laws can be complex and particularly challenging and that it may be wise, if a client has expressed a desire to grow marijuana, to first seek the advice of a lawyer.

    If you have any questions or concerns regarding zoning by-laws, or your client’s rights to grow marijuana, please do not hesitate to contact our office for further information.

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    Disclaimer: the blog covers various areas relating to law for educational and non-commercial purposes only. The blog is not intended to be the source of legal advice. If you choose to rely on the material in this blog or elsewhere on this website, you do so entirely at your own risk.

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