Cannabis dispensaries are a common sight in many parts of Canada, but some municipalities in British Columbia have been reluctant to allow them in their communities. However, some of these formerly dry municipalities have recently changed their stance and permitted dispensaries to operate in industrial zones, away from residential and commercial areas. This article explores how this strategy has worked for both the dispensary owners and the local governments.
The Benefits and Challenges of Industrial Zones for Dispensaries
Industrial zones are areas designated for manufacturing, warehousing, distribution, and other industrial activities. They are typically located on the outskirts of urban centers, away from schools, parks, and other public places. Some municipalities in BC have chosen to restrict cannabis dispensaries to these zones, as a way of testing the waters before allowing them in more visible locations.
One of the benefits of industrial zones for dispensaries is that they offer lower rent and less competition than commercial zones. They also provide more space and security for the dispensary operations. For example, Michael Holekamp, CEO of Daylight Cannabis Company, said that his store in Tofino, BC, next to breweries and automotive shops, was a good fit for his business model. He said that he intentionally never requested municipal officials to change the zoning of his store from industrial to commercial, as he preferred the lower costs and fewer regulations.
However, industrial zones also pose some challenges for dispensaries, such as lower foot traffic, less visibility, and less accessibility for customers. Vikram Sachdeva, CEO and founder of the Seed & Stone dispensary chain, said that the industrial area concept had to go away, as it created barriers for reaching customers. He said that he had to work directly with the mayor and city staff of Delta, BC, to create a policy for dispensaries, after opening the first store in an industrial zone in November 2021. Since then, he said that five more dispensaries have opened in Delta, including three in strip malls.
The Reasons and Reactions of Municipalities for Allowing Dispensaries in Industrial Zones
Municipalities in BC have different reasons and reactions for allowing dispensaries in industrial zones. Some of them have reversed their ban on cannabis dispensaries after seeing the demand and the revenue potential of the industry. Others have used industrial zones as a compromise or a trial before opening up in commercial areas. Some have still not adopted permanent regulations on dispensaries, leaving them in a legal limbo.
One of the reasons for allowing dispensaries in industrial zones is to address the concerns of some residents and officials about the impact of cannabis storefronts on the community, especially on minors. For instance, the bill CB-070, proposed by the Prince George’s County Council in Maryland, USA, mandates that cannabis dispensaries must be in industrial zones, outside of high business areas that are near residential areas, such as shopping centers and strip malls. The bill aims to prevent youth exposure and access to cannabis, as well as to preserve the character and aesthetics of the county.
Another reason for allowing dispensaries in industrial zones is to monitor and regulate the cannabis supply chain, which involves cultivation, manufacturing, distribution, transportation, and retail. Industrial zones are typically equipped with the infrastructure and the security measures to handle these activities, as well as to comply with the track and trace systems required by the provincial and federal governments. For example, the Commercial Cannabis Location Restriction Ordinance in Los Angeles, California, USA, allows distribution and testing activities primarily in industrial zones, such as CM, MR1, M1, MR2, M2, and M3.
The reactions of municipalities for allowing dispensaries in industrial zones vary from positive to negative. Some of them have seen the benefits of the cannabis industry, such as job creation, tax revenue, and economic development. Others have faced the challenges of the cannabis industry, such as enforcement issues, zoning conflicts, and public health concerns. Some have still not decided on their stance on the cannabis industry, leaving the dispensaries in a state of uncertainty and risk.
The Future of Cannabis Dispensaries in Industrial Zones
The future of cannabis dispensaries in industrial zones depends on several factors, such as the demand and supply of the market, the preferences and feedback of the customers, the policies and regulations of the governments, and the innovation and adaptation of the businesses. Industrial zones may continue to be a viable option for some dispensaries, especially those that focus on online sales, delivery services, or niche products. Industrial zones may also be a stepping stone for other dispensaries, especially those that aim to expand their customer base, brand awareness, or product variety.
As the cannabis industry evolves and matures, it is likely that more municipalities will adopt a more flexible and inclusive approach to zoning and licensing for dispensaries, allowing them to operate in a range of locations, such as commercial, mixed-use, or even residential zones. This will create more opportunities and challenges for the dispensary owners, as well as more choices and convenience for the customers. Ultimately, the success of cannabis dispensaries in industrial zones and beyond will depend on their ability to meet the needs and expectations of their stakeholders, while complying with the laws and regulations of their jurisdictions.
