The owner of a Manitoba medical cannabis company has beaten one of the first fines issued by the province's regulator for selling unauthorized marijuana products, but he's still fighting to get back thousands of dollars' worth of material seized by inspectors.

Thaddeus Conrad, owner of Med-Man Brand, was one of two retailers at a convention in February who received a $2,542 ticket after inspectors with the Liquor, Gaming and Cannabis Authority (LGCA) accused them of illegally selling cannabis products.

At a court hearing on June 26, a Crown prosecutor entered a stay of proceedings on the ticket, but another hearing is set for later in July to decide what will happen with Conrad's products.

"They did an illegal search and seizure," said Conrad, who insists that he and his 20 volunteers at the HempFest Cannabis Expo at the RBC Convention Centre on Feb. 23 had medical cannabis licences that authorized them to possess the products, which he said were stored under a table and not sold at the event.

The two tickets were issued against Med-Man and another company, B.C.-based Kootenay Labs, which LGCA confirmed were the first and only tickets for unauthorized cannabis sales issued by the authority since legalization on Oct. 17, 2018.

Inspectors seized dried cannabis, seeds, topical creams, edibles, shatter and vape cartridges from Conrad's booth. (John Einarson/CBC)

The inspectors seized 1,371 grams of dried cannabis flower, nearly 5,000 cannabis-infused gummy bears and other edibles, 108 vials of topical cream, 59 packages of seeds, as well as packages of shatter, vape cartridges and other items.

The LGCA estimates the total street value of the products at $34,000.

Who is regulating the LGCA ... and why are they allowed to make medical marijuana patients' [lives] miserable while trying to gain a profit from ticketing them? - Thaddeus Conrad, owner of Med-Man Brand

Conrad argues the seizure was unlawful because the LGCA has no involvement in regulating medical cannabis.

"I think that the LGCA has no idea what's going on at all," he said. "I don't think they received any proper training, if they don't even know what jurisdiction they're operating under and if they don't even know what authority they're operating under."

Judge wants proof of medical licences

A spokesperson for the authority wouldn't comment on Conrad's case because it is still before the court, but said "inspectors have the authority to issue offence notices and seize illegal product under The Liquor, Gaming and Cannabis Control Act."

At the court hearing, Crown prosecutor Lee Turner told justice of the peace Alicia Schnell the amount of cannabis seized was "well in excess of what you can legally possess."

Although the Crown is not pursuing the charge against Conrad, Turner said returning that much cannabis to him would be illegal.

"He could be subject to a new charge should he be allowed to take this back by this court."

Recreational users are allowed to possess a maximum of 30 grams of dried cannabis. Medical marijuana users, however, can possess up to 150 grams, depending on their prescription.

Between himself and his 20 volunteers, Conrad said they had far less than the total amount they were allowed to have at the event in February.

Conrad argues he and his volunteers have medical licences that allow them to possess all products seized. (John Einarson/CBC)

If he wants to get the products back, Schnell told Conrad he would have bring his and all his volunteers' licences to court.

"It's not as if I can return it to you as a whole. If each person is allowed to have so much, then that would have to be broken down," she said.

The experience of having their cannabis seized and fighting to get it back has been emotionally taxing for Conrad and his volunteers, he said.

"Who is regulating the LGCA and why are they allowed to operate without any authority regulating them?" he said. "And why are they allowed to make medical marijuana patients' [lives] miserable while trying to gain a profit from ticketing them?"

He's considering filing a complaint with provincial Minister of Justice Cliff Cullen, as well as the Manitoba Human Rights Commission.