DATE: December 8, 2014 REPORT NO. CD TYPE OF REPORT CONSENT ITEM [ X ] ITEM FOR COUNCIL CONSIDERATION [ ]

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1 DATE: December 8, 2014 REPORT NO. CD TO: FROM: Chair and Members Committee of the Whole Community Services Gregory Dworak, General Manager Community Services 1.0 TYPE OF REPORT CONSENT ITEM [ X ] ITEM FOR COUNCIL CONSIDERATION [ ] 2.0 TOPIC Medical Marihuana Production Facilities (MMPF) Update [Financial Impact - None] (CD ) 3.0 RECOMMENDATION THAT Staff Report CD BE RECEIVED as information. 4.0 PURPOSE The Staff Report reviews the local zoning regulations to determine if there is a need to take any action to regulate Medical Marihuana Production Facilities (MMPFs). It confirms that MMPFs can only locate operations in the City of Brantford within the General Industrial (M2) zone, as it is the only zone that permits both agriculture and industrial production as permitted uses. 5.0 BACKGROUND Staff Report CD (May 12, 2014) provided the Committee of the Whole and Council with basic information respecting new Federal regulations for medical marihuana. Under the new regulations, users of medical marihuana will be supplied by licensed producers only. In anticipation of these changes, it was recommended that the Chief Building Official be the local point of contact for the City of Brantford with applicants seeking to establish medical marihuana production facilities.

2 December 8, 2014 Page 2 In the previous staff report, staff also undertook to investigate the appropriate zoning for this use and to report back with recommendations concerning any regulations that may need to be amended to ensure MMPF s are directed to preferred locations. Recently, the City of Brantford has received a letter from Woodstock Biomed proposing to open a MMPF in Brantford. 5.1 Legislation In June 2013, Health Canada updated the Marihuana Medical Access Program (MMAR) with new Marihuana for Medical Purposes Regulations (MMPR). The new regulations aim to treat medical marihuana, as much as possible, like other controlled substances used for medical purposes, allowing for quality control and production under secure and sanitary conditions. New Health Canada regulations shift the growing of medical marihuana out of residential buildings and away from residential neighbourhoods into commercialscale production facilities. The new regulations will result in improvements to facility security; local government, police and fire official notification; land use; and public health and safety. Legally municipalities cannot prohibit medical marihuana production facilities. The regulation of medical marihuana production falls exclusively under federal jurisdiction, where the federal government governs the possession, production, and trafficking of marihuana through the Controlled Drugs and Substances Act, S.C.1996,c.19 (CDSA). The MMPR were enacted pursuant to the authority granted under section 55(1) of the CDSA. The MMPR does not require any action from municipalities; however using their powers to regulate or prohibit land uses, municipalities may choose to enact zoning and/or licensing bylaws to further regulate medical marihuana production. Should municipalities choose to enact bylaws, some consideration should be given to limitations that may arise that would effectively render the bylaws invalid or inapplicable. If there were a direct conflict between federal MMPR and a municipal bylaw, the federal regulations would prevail. 5.2 Regulations The new MMPR change the way medical marihuana is produced and accessed in Canada. Most significantly, the MMPR prohibit licensed medical marihuana production in dwelling places and allow only for the commercial production of medical marihuana. The MMPR include stringent regulatory requirements for indoor-only production activities and storage, physical security measures, quality control standards, record keeping of all activities including inventory of marihuana, security clearances for producer s license applicants, and secure distribution.

3 December 8, 2014 Page 3 Under the MMPR, the only legal means to access marihuana for medical purposes is through a licensed producer. Licensed producers will sell and distribute dried marihuana directly to a client with medical documentation provided by a health care practitioner. Regarding distribution, a medical marihuana order must be securely delivered to the address of the registered client or health care practitioner s office. There is no permission under MMPR for retail sales; therefore, a client cannot pick up their medical marihuana from the producer s site or from any retail outlet (e.g. pharmacy). As of April 1, 2014, the personal and designated production of medical marihuana by individuals allowed under the former program is no longer permitted and, subsequently, considered an illegal activity subject to law enforcement action. Following the March 31, 2014 expiration of the authorizations to possess and production licenses under the MMAR, all marihuana (plants, seeds, dried) obtained under the former program were to be destroyed and notice provided to Health Canada for confirm destruction. However, on March 21, 2014, a Federal Court judge issued an injunction that allows medical marihuana users licensed under the former program to continue to grow their own marihuana plants pending a future trial. On March 31, 2014, the Government of Canada issued a departmental statement that it intends to appeal the Federal Court s order and that the persons previously authorized to grow marihuana under the former MMAR, who meet the terms of the Court order, will be able to continue to do so on an interim basis until the Court issues a final decision. 5.3 Implications for Municipalities Changes in the regulatory requirements for medical marihuana activities under the new MMPR provide several benefits to municipalities, including: The elimination of hazards associated with previously licensed residential medical marihuana production. Licensed, quality controlled and secure commercial medical marihuana facilities will eliminate some of the common hazards and issues associated with licensed production previously permitted in residential dwellings, including, fire, mold, odor, and security (e.g. break-ins). However, these hazards may persist for illegal marihuana production activity. The provision of MMPF site addresses including a list of all activities to be conducted at the sites. Under the MMPR, licensed producers are required to notify their local governments, police force and fire officials of their intention to apply for a license, so that local authorities are aware of the proposed medical marihuana production facility location and activities. However, it is responsibility of the municipality to keep a list of the licensed production sites, since Health Canada cannot provide such information that is protected under the Privacy Act.

4 December 8, 2014 Page 4 The opportunity to regulate the location and siting of medical marihuana production facilities. Although not specifically stated in the MMPR, Health Canada advises licensed producers to adhere to and comply with municipal legislation and by-laws, including zoning by-laws. However, it is the responsibility of the municipality to ensure zoning by-law and building code compliance, since Health Canada can only inspect for compliance with the MMPR and any related federal legislation. Further, there are no requirements of Health Canada s producer s license to show such compliance with municipal bylaw and building permit requirements. 5.4 Status of Producers Licenses in Ontario and Brantford As of January 2014, Health Canada had received over 400 applications for medical marihuana production and distribution facilities, with approximately 160 of those for facilities in Ontario. To date, a total of thirteen licenses have been issued with four of these for Ontario based facilities. Several more license applications for Ontario-based facilities are in advanced stages of review. With about 37,000 licensed medical marihuana users today and a projected approximately 435,000 users by 2024, interest from commercial producers for medical marihuana facilities will only increase. The City of Brantford has received several inquiries by telephone and related to commercial medical marihuana production. On July 11, 2014, the City of Brantford received correspondence from Woodstock Biomed ( that it has applied for a license to produce marihuana for medical purposes under MMPR and indicated that it planned to purchase a property in Brantford for that purpose. The company indicated that it planned to undertake the following activities for commercial purposes: The production, germination, and cultivation of dried marihuana for commercial purposes; The testing of dried marihuana for safety and quality assurance; The packaging and storage of dried marihuana for commercial purposes; The sale of dried marihuana to those authorized to buy; and The destruction and disposal of any waste generated in regards to the production, germination and cultivation of dried marihuana for commercial purposes. Woodstock Biomed plans to undertake these activities in a property they are intending to purchase, which is located in the General Industrial (M2) Zone.

5 December 8, 2014 Page CORPORATE POLICY CONTEXT Community Strategic Plan Economic Vitality and Innovation Brantford will have a strong diversified economic base that provides its citizens with excellent local job opportunities. High Quality of Life and Caring for all Citizens Brantford will be recognized as a healthy community, one that promotes and enables the well-being of its citizens and supports access of all citizens to a full range of health and community services. 7.0 INPUT FROM OTHER SOURCES Community Services staff in Planning, Building, and Economic Development have worked with Legal and Real Estate Services, Fire and Brantford Police Services in developing the recommended approach. 8.0 ANALYSIS 8.1 Existing Official Plan and Zoning provisions The Official Plan permits manufacturing, storage, warehousing, distribution, research and development on lands designated General Industrial Areas. Based on the Zoning By-law definitions for these uses, all of the activities associated with a medical marihuana production facility (MMPF) including agricultural production are only permitted in the General Industrial (M2) Zone as itemized below: Production, germination and cultivation of dried marihuana for commercial purposes Agricultural Testing of dried marihuana for safety and quality assurance Manufacturing Pharmaceutical Research and Development - Manufacturing Packaging and storage of dried marihuana for commercial purposes Manufacturing

6 December 8, 2014 Page 6 Transport and distribution of dried marihuana for commercial purposes Manufacturing Sale of dried marihuana to those authorized to buy Agricultural Destruction and disposal of waste generated in regards to the production, germination and cultivation of dried marihuana for commercial purposes Agricultural While the following zones also permit agricultural uses, they do not permit manufacturing and would therefore not be considered for the location of MMPFs from a zoning compliance perspective: OS1 (Open Space Type 1) Zone: agricultural uses are permitted including accessory uses, buildings and structures; OS3 (Open Space Restricted Zone): agricultural uses are permitted with accessory uses, buildings and structures; and M4 (Industrial Extractive Zone): agricultural uses are permitted with accessory uses, buildings and structures. 8.2 Planning Considerations Use Regulations The life sciences economic sector is defined by companies involved in biotechnology, biomedicine, pharmaceuticals, and health care and laboratories. Medical marihuana production fits within this sector. Brantford currently has a small but dynamic life sciences sector. All of these companies have components of their operations that practically direct them to the General Industrial (M2) Zone, and are an important generator of employment for highly skilled personnel. The Life Sciences sector has great potential for growth and, in particular, in areas that involve living organisms such as plants, cells and microorganisms. Staff observes that medical marihuana production is a drug manufacturing process, not unlike any other pharmaceutical drug manufacturing process that takes place in a highly-controlled environment that includes laboratory testing, and results in a final product that is used for medical purposes. Medical marihuana production involves the cultivation, growing, harvesting, and drying of the marihuana plant, followed by laboratory testing, packaging and storage of the dried marihuana. The dried medical marihuana is distributed to authorized customers for medical use. Any plant waste is destroyed on-site or removed by a licensed disposal company.

7 December 8, 2014 Page 7 Unique to medical marihuana production is the requirement for on-site plant growing since marihuana is a controlled substance subject to stringent security requirements. In contrast, other medical plants such as Echinacea or Ginseng are not controlled substances and therefore may be grown or collected from the wild in a non-secure, agricultural environment and then transported to a manufacturing facility. Staff has determined that MMPF is a hybrid of both an agricultural use and an industrial use due to the growing and the production sides of the use. Staff used existing defined terms and regulations in the Zoning By-law to address this use. MMPF is interpreted as an agricultural use by the Building Department. While there are four zones that permit agriculture in the City of Brantford, only the General Industrial (M2) Zone fully permits all aspects of a Medical Marihuana Production Facility (MMPF) which includes cultivation, growing, harvesting, drying, testing, packaging, storage and distribution. Should a proponent seek to establish a MMPF elsewhere, a zoning by-law amendment would be necessary to permit the manufacturing side of the business. Furthermore, it is understood that Health Canada is interested in complete facilities and not allowing for example the agricultural component to be separated from the manufacturing side. Therefore, the Zoning By-law permits medical marihuana production as-of-right only in the General Industrial (M2) Zone. Lands zoned M2 encompass approximately 1,310 hectares (3,237 acres) in the City of Brantford, though the net amount of M2 zoned land is significant. There are limitations on the number of potential medical marihuana production facilities capable of locating within M2 zoned areas based on limited availability of vacant development sites and buildings. Currently, the City of Brantford has approximately 1 million square feet of vacant space available for sale / lease. Much of this would not be suitable for a MMPF due to limitations due to age, size, location, availability, etc. In addition, while there are some private lands available, the City only has roughly 35 acres of vacant industrial land in inventory, further limiting opportunities / options for this type of investment. As discussed earlier in the report, Health Canada is likely to issue a limited number of licenses in Ontario for the commercial production of marihuana. Therefore, the number of potential commercial producers is limited and finite Development Regulations The MMPR provide stringent regulations with respect to exterior security, air filtration, and waste destruction which effectively require the entire operation be contained inside. These regulations will be effective in mitigating negative impacts on surrounding land users of the broader community. Locally, the regulations of the M2 Zone provide additional development standards and are intended to ensure that industrial uses are undertaken in a manner that avoids nuisances and remains compatible with surrounding uses.

8 December 8, 2014 Page 8 There are no Federal of Provincial requirements for setbacks for MMPFs. However, the likelihood of a MMPF locating in an older industrial site near a residential zone is low due to many regulatory constraints. Setbacks up to 9 metres from a residential zone, lot coverage, outdoor storage prohibition, small lots, requirements for buffering (section 6.10) and prohibition of noxious uses in all zones (section 6.2.2) all make locating in these sites complicated and impractical considering the size of buildings and operational considerations necessary to successfully receive a license from Health Canada. In addition, M2 Zoned lands within 70 metres of residential uses are also subject to site plan control, which provides an additional opportunity for municipal approval and allows the City to consider the appropriate location for buildings, driveways, parking lots and loading areas, lighting, landscaping, fencing and other buffering tools. It is anticipated that MMPFs will have less of an impact compared to other operations now found in the M2 Zone. In regards to licensing, staff feels it is not necessary to deal with local licensing as it is subject to strict industry-specific licensing requirements through Health Canada. 9.0 FINANCIAL IMPLICATIONS Not Applicable 10.0 CONCLUSION Health Canada has updated the Marihuana Medical Access Program (MMAR) with new Marihuana for Medical Purposes Regulations (MMPR). The new regulations aim to treat medical marihuana as much as possible like other controlled substances used for medical purposes, allowing for quality control and production under secure and sanitary conditions. Legally, municipalities cannot prohibit medical marihuana grow and production facilities. The MMPR does not require any action from municipalities; however, using their powers to regulate or prohibit land uses, municipalities may choose to enact zoning and / or licensing bylaws to further regulate medical marihuana production. Should municipalities choose to enact bylaws, some consideration should be given to limitations that may arise that would effectively render the by-laws invalid or inapplicable. If there were a direct conflict between federal MMPR and a municipal bylaw, the federal regulations would prevail. This report confirms that medical marihuana production is permitted as-of-right only in the General Industrial (M2) Zone. Only the M2 Zone fully permits all aspects of a Medical Marihuana Production Facility (MMPF) which includes cultivation, growing, harvesting, drying, testing, packaging, storage and distribution. This highly regulated industry, with a limited number of licenses to be issued for Ontario facilities, and limited land and space opportunities within

9 December 8, 2014 Page 9 the M2 Zone, indicates limited opportunities in the City of Brantford for Medical Marihuana Production Facilities. The M2 zone already includes a variety of industrial uses whose impacts are mitigated through controls on setbacks, lot coverage, outdoor storage, etc. in the Zoning By-law and the Ontario Building Code regulations. Therefore, staff is of the opinion that MMPFs are well regulated in the current zoning by-law and no further modifications are necessary. Mark Gladysz, MCIP, RPP Senior Planner-Projects Community Services Chris Bell, MCIP. RPP Manager of Policy Community Services Paul Moore, MCIP, RPP Director of Planning Community Services Gregory Dworak, MCIP, RPP General Manager Community Services Appendix "A" Map - Lands zoned M2 General Industrial Zone In adopting this report, is a bylaw or agreement required? If so, it should be referenced in the recommendation section. Bylaw required [ ] yes [ x ] no Agreement(s) or other documents to be signed by Mayor and/or City Clerk [ ] yes [ x ] no Is the necessary bylaw or agreement being sent concurrently to Council? [ ] yes [ x ] no

10 December 8, 2014 Page 10 Appendix A