Dispensaries seeking a reprieve from the strict buffer zones of Vancouver's new pot-shop bylaw have been dealt a blow by an independent development board, which appears set on keeping the number of storefronts to a minimum.

The Board of Variance will hear from 58 dispensaries over the next nine months after it dismissed the first four pot-shop appeals last week because they were 300 metres from designated sites such as schools and community centres.

If an appeal is granted, then an applicant can move on to the next stage of licensing and apply for a development permit.

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Many in the sector – still illegal under federal drug laws – are now second-guessing the regulatory process they voluntarily agreed to participate in after city council voted in the new rules last June.

Chuck Varabioff, owner of the BC Pain Society, said the board gave short shrift to his argument that the Commercial Drive dispensary provides cheap medicine to 15,000 members, many of whom have low incomes and take public transit in from outlying suburbs. Mr. Varabioff, who made headlines when his store began operating Canada's first pot vending machine, said customers will be underserved if the board denies all the upcoming appeals and only a dozen or so dispensaries remain open.

"It's going to be absolutely ridiculous. … I honestly don't know how a handful of stores are going to handle all the customers," Mr. Varabioff said. "That's why I feel the city didn't really think this out too well."

Provincial politicians are pushing for pot to be sold through liquor stores or pharmacies – not dispensaries – once recreational use is made legal by the federal Liberals, but Vancouver is continuing with its landmark regulation that could see these illegal storefronts winnowed down from more than 100 to just several dozen this year. Regardless of where recreational cannabis is eventually distributed, the City of Vancouver has said face-to-face sales of the drug must follow these rules.

So far only 16 applicants have made it to the second of three licensing stages.

The first new business licence is expected to be issued this spring and, come April 20, those dispensaries still not taking part in the application process will be asked to voluntarily close down.

Councillor Kerry Jang, governing Vision Vancouver's spokesman on marijuana issues, said the Board of Variance seems to be "applying the bylaw very strictly right now."

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Jamie Shaw, spokeswoman for the BC Compassion Club Society, said it would be ironic if her organization is denied an appeal when it comes before the board on April 20. That's because the city's requirements for a special compassion-club licence – which offers a discount to non-profit dispensaries that provide other on-site therapies – was "based pretty heavily" on her group's model, she said.

"If anybody gets a variance it will be us: We've been there for 18 years," Ms. Shaw said.

She said her organization has the support of Stratford Hall private school, a "trusted neighbour" that operates kitty-corner from the storefront.

Ms. Shaw, who is also president of the Canadian Association of Medical Cannabis Dispensaries trade association, said it will be interesting to see what operators do once they are ordered to shut down in April.

Mr. Jang said there will be zero tolerance for those shops that continue operating without a licence, or an ongoing application, after the city's grace period ends, but those that are closed can reapply to operate in other locations.

"That's what they wanted; these pot shops said they wanted to be treated like any other business and that's exactly what we're doing," Mr. Jang said.

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The city will use fines, court injunctions and, in "extreme cases" the police department, to shut down those that don't comply, he added.

Mr. Jang said he didn't know how many dispensaries are needed to adequately serve the Vancouver market.

"With 20 [dispensaries], there would be adequate access throughout the city because they would be placed throughout the city and they would be regulated and monitored to make sure kids and people remain safe," he said.