Individuals and corporations seeking to become licensed producers of cannabis are advised to pay close attention to municipal land use permissions when conducting due diligence in relation to the purchase of property for the purpose of setting up their production facility.
The federal government is currently responsible for administering Canada’s cannabis production licensing process. While the Access to Cannabis for Medical Purposes Regulations, SOR/2016-230 require prospective licensed producers to notify local authorities before submitting an application for a producer’s license, municipalities are not involved in the approval or consultation process. Despite their limited involvement in the licensing scheme, however, it is important to acknowledge that municipalities have authority over land use regulation and have the power to prohibit and regulate certain uses through zoning by-laws. Licensed producers are required to obey municipal zoning by-laws and a Chief Building Official will refuse to issue a building permit for any proposed construction or new development that does not comply with the provisions of a zoning by-law.
A zoning by-law controls the use of land in a community and sets out how land may be used, where buildings and other structures can be located, the types of buildings permitted and the uses permitted within those buildings as well as permitted lot sizes and dimensions, parking requirements, building heights and setbacks from streets.
The shifting legal landscape surrounding the production of cannabis has led some Ontario municipal planning departments to consider how this use fits into existing land use frameworks. Despite the fact that municipalities have no formal role within the federal government’s cannabis framework, many municipalities see themselves as having a responsibility to mitigate possible adverse land use impacts associated with cannabis production and have embarked on reviews of their current zoning by-laws to determine how to best deal with this use.
Three different approaches appear to have emerged for the regulation of cannabis facilities through municipal zoning by-laws.
Under the first approach, a municipality simply defines the term “Cannabis Production Facility” (or a similar term) within its zoning by-law. In Ontario, all uses are presumed to be prohibited, except those that are explicitly permitted in a zoning by-law. Defining “Cannabis Production Facility” provides a municipality with the opportunity to explicitly permit this use in certain zones. This approach provides prospective licensed producers with some certainty as to whether their contemplated use is permitted in a particular zone. This approach does not, however, provide a prospective licensed producer with any additional guidance as to how the use may be regulated within a particular zone, potentially raising questions with respect to certain matters including, for example, mandatory separation distances from other uses.
Following the second approach, a municipality defines the term “Cannabis Production Facility” (or a similar term) within its zoning by-law and provides detailed regulations regarding where and how the use can be permitted or expressly prohibited. This was the approach taken by the City of Toronto when it amended its City-wide Zoning By-law in 2014 to permit medical marijuana production facilities in specific zones. As a result of this exercise, the City created a new defined term and added a new chapter to its City-wide Zoning By-law containing regulations addressing the location of the production activity, open storage, loading, separation distances from sensitive uses (including residential, institutional and open space zones as well as schools, places of worship and open spaces) and setbacks.1 This approach provides greater certainty as to whether or not the cannabis production facility use is permitted and also provides additional clarity with respect to the conditions which must be satisfied in order to legally establish this use. A similar approach is observed in the zoning by-laws of the City of Burlington2 and the County of Brant3, among other municipalities.
Under the third approach, a municipality makes no amendments to its zoning by-law and instead determines that the cannabis production facility use falls within existing use definitions and zoning permissions. This is one of the approaches considered by the Town of Erin. Following a review of its existing zoning by-law, Town planning staff determined that the cannabis production facility use was already permitted within a number of zones within the municipality and, as a result, determined that amendments to its zoning by-law may not be necessary.4 Many municipalities have simply not turned their minds to this issue and have made no changes to their zoning by-laws to address cannabis production facilities. In these cases, it will be difficult for a prospective licensed producer to know whether the use is permitted without consulting with a municipality’s planning department.
While it is possible to apply to a local municipality to amend or seek a minor variance to a zoning by-law as it applies to a particular property, the process can be costly and there is no guarantee of success. Furthermore, applications for minor variances and zoning by-law amendments trigger a public process under the Planning Act,which may draw unwanted attention to a particular project. As such, prospective licensed producers are advised to seek out locations where cannabis production is permitted under the applicable zoning by-law as of right, subject to the necessary federal approvals. Prospective licensed producers may be more confident that they will receive municipal and public support for a particular project where cannabis production facilities are explicitly denoted as a permitted use. In any event, individuals and corporations seeking to establish a cannabis production facility in a particular municipality are advised to contact the local planning department at an early stage in the process in order to determine whether and where such a use may be permitted.
The Municipal & Land Use Planning Group at Aird & Berlis employs a number of in-house land use planners who are experienced in carrying out zoning reviews for individuals and corporations looking to buy land for the purpose of establishing cannabis production facilities. We would be pleased to offer assistance to anyone seeking more information with respect to land use planning permissions in a particular municipality.