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British Columbia court tosses suit over cannabis store enforcement on reserves

(This story has been updated to correct the currency conversion for U.S. dollars.) 

A group of licensed cannabis retailers in British Columbia lost their bid to be compensated for the province’s alleged failure to “adequately” enforce provincial licensing requirements on Indigenous reserves.

The group had sought 40 million Canadian dollars ($29.7 million) from the province for apparent loss of income.

The British Columbia Supreme Court judge wrote in the decision that “I am satisfied that it is plain and obvious that the claim does not disclose a reasonable cause of action in either negligence or negligent misrepresentation.”

The plaintiffs had said the province took significant enforcement actions against more than 70 unlicensed cannabis retailers.

“However, the decline in illicit cannabis stores and enforcement actions against such stores have taken place almost entirely on lands not designated as Indian Reserves, which illicit sales are the subject of the present action,” the group said in their notice of civil claim.

The legal stores say they lost cash receipts of more than 40% of potential retail sales to illicit retailers on Indigenous reserves.

The gist of their argument was that the province was under a “duty of care” obligation to ensure the viability of the legal cannabis industry by enforcing the Cannabis Control and Licensing Act throughout the province, including on Indigenous land.

The plaintiffs allege that the province failed to enforce the licensing requirements by shutting down retail cannabis locations on Indigenous reserves, costing them millions in damages.

The Cannabis Control and Licensing Act (CCLA) is the province’s principal law governing the cannabis industry.

The judge wrote that “the plaintiffs cannot succeed in establishing a private law duty of care owed to them by the province to enforce the (licensing) provisions of the CCLA on Indigenous Reserves, or anywhere else.

“Accordingly, the claim is bound to fail and is dismissed with costs to the province.”

The decision is available here.

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