A group of licensed BC cannabis dealers are suing the province for $40 million for alleged failure to crack down on illegal pot shops on First Nations reservations.
In a lawsuit filed in Victoria on April 27, the group says each retailer “suffered a $500,000 annual decline in gross sales due to business being lost to illegal retailers operating with reserves, to the knowledge of the defendants.” “.
The complaint listed the BC Attorney General, the Secretary of Public Safety and the BC Community Safety Unit as defendants. A total of 14 numbered companies are involved in the lawsuit.
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All numbered businesses are listed with licensed cannabis retail operations in southern BC’s interior – from Shuswap to the South Okanagan.
Most of the numbered companies only operate one store, although one operates two stores while another lists four locations: Kelowna, Salmon Arm, Penticton, and Armstrong.
The crux of the lawsuit is that while licensed retail cannabis stores must purchase provincial cannabis and follow strict laws, illegal stores do not.
“These illegal retailers in Indian Reserves are not licensed under British Columbia law to operate retail cannabis stores,” the complaint reads. “There is no cannabis retail license issued by the (Liquor and Cannabis Regulation Branch) in relation to these retailers.”
The lawsuit also states, “The illegal retailers sell black market products or illegally acquired products that were not purchased by the government of British Columbia as required by the (Cannabis Control and Licensing) Act, nor under the Cannabis Act (Canada). ”
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It further states: “The defendants are aware of the continuing and growing retail sales of cannabis on Indian Reserves in a manger that circumvents and disregards the prevailing laws and regulations governing the retail sale of cannabis in British Columbia.
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“The defendants have repeatedly pointed to the unlicensed sales on reserve land, with specific information about the location of the illegal retailers. However, the defendants did not act.”
According to the lawsuit, BC’s retail cannabis industry has experienced rapid growth, with annual sales expected to reach $1 billion by 2024.
With that in mind, the retailer group says, “The defendants have taken on a duty to protect the legal cannabis industry and prevent the illegal sale of unregulated cannabis products in the province.”
However, the plaintiffs say that “the defendants failed in their duties to the plaintiffs” and that they failed in their duty of care.
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In addition to seeking $40 million in damages, plaintiffs also want to see an order requiring defendants to enforce the Cannabis Control and Licensing Act to prevent illegal pot shops anywhere in BC
The lawsuit found that BC’s Community Safety Unit took enforcement action against more than 70 unlicensed cannabis retailers in 2021 and removed approximately $25 million worth of cannabis products from the illicit market.
It said 39 fines had been imposed and more than 170 unlicensed shops had been closed over CSU actions.
Global News has reached out to Attorney General David Eby for comment.
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