Canada's third largest city is poised to pass a series of unprecedented regulations for its medical marijuana dispensaries this week, amid opposition from a federal government that has fashioned itself arch enemy of pot for any purpose.

A suite of rules proposed by Vancouver Mayor Gregor Robertson will make his city the first in Canada to clarify the legal gray zone in which medical marijuana shops currently operate. The new rules will limit ownership of these shops to individuals with no criminal record, ban the sale of edibles, limit where these shops can open, and slap $35,000 in annual fees onto the owners.

Vancouver's city council will vote on the measures on Tuesday, and they will almost certainly be approved. It comes amid an ongoing battle by marijuana producers to gain a toe-hold in the lucrative Canadian market. The federal government, however, is intent on keeping a lid on the burgeoning pot business, limiting access and charging crushing fees for the producers. Thanks to that system, there are less than two dozen licensed producers across the country, and only 17 of those are permitted to distribute pot, via mail, to patients.

While the new Vancouver rules are pitched as a "crackdown," promising to shutter as many as a fourth of the shops that currently operate in the city, the federal government is nevertheless furious.

"There are serious health risks associated with smoking marijuana, especially for kids. That is why our Conservative government wants to stop kids from smoking marijuana," read talking points provided to VICE News by a spokesperson for Health Minister Rona Ambrose.

The minister declined an interview.

The minister's outrage over the changes, which would in no way license the sale of marijuana to children, made headlines. Less attention was paid to what Canada's Conservative government wants done about it.

"Our government does not support making drugs more accessible," a spokesperson for Canada's Public Safety Minister told VICE News on Friday, when asked whether the government plans on sending in police to shut down these stores. "We expect all local cities and police to respect and enforce the law."

While cities may be looking to codify rules on the dispensaries — of which there are at least 80 in Vancouver alone — they remain illegal under federal law.

Ottawa won't say whether or not it intends on tasking the federal police service, the Royal Canadian Mounted Police, to raid the dispensaries, much like the American government has for years used the FBI to impose federal drug laws at the expense of the state's rules on medical marijuana.

At present, the federal government's plan is to pressure the city to abandon their regulations and to have the city send in the Vancouver Police Department to shut down the shops. Ottawa has been clear: it wants these medical marijuana dealers arrested.

The health minister has already written a letter to Vancouver's mayor, maintaining that "these regulations are clear and do not provide municipalities with authority to legitimize the commercial sale of marijuana."

The minister is referring to Canada's Marijuana — or, as the government calls it, Marihuana — for Medical Purposes Regulations (MMPR), which puts strict limits on how users can obtain their medicine. The regime tightly controls how the pot is grown, and forbids any distribution, except by mail.

Under the previous regime, those with prescriptions or licenses to use medical marijuana were able to grow their own, or get someone to grow it for them. The MMPR system put sought to end that but a federal court granted a last-minute injunction that prevented home-growers from becoming criminals overnight. Canada's Supreme Court is expected to rule in the coming months on whether or not those who grew their own medicine before the new rules came into effect can continue to do so.

But, for the most part, the federal government has succeeded in choking off the vast majority of the medical marijuana industry in Canada.

Ottawa's system is designed to keep small producers out of the industry, and instead limit the market only to large-scale operations. Between the arduous licensing process — which largely comes down to an arbitrary decision by the minister of health — and exorbitant fees to set up shop, the market place is very small, and easy for the government to keep an eye on. Some producers are looking at up to $1 million to cover the security requirements alone. Other administrative requirements crafted by Ottawa could costs hundreds of thousands of dollars a year more.

VICE's Canadian Cannabis series detailed how that corporate pot business is shaping up.

Those who work in the industry suspect that the federal government won't be issuing any new licenses, instead preferring to let competition in the industry whittle down the list until there are only a handful of producers who control the entire market, essentially creating a pot oligarchy.

The government already tightly manages the field of producers, slapping on onerous advertising restrictions and warning them not to "advertise marijuana in relation to particular therapeutic claims."