Medical marijuana dispensaries are now legitimate businesses in the eyes of a new Vancouver bylaw.

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On Wednesday, after four days of public hearings, city council voted to approve a business-licensing program making Vancouver the first jurisdiction in Canada to regulate storefront pot sales.

The rules and conditions are rigorous as the new bylaw aims to rein in the proliferation of pot stores that have cropped up and technically operate outside the federal government’s legal framework.

After the historic vote, Federal Health Minister Rona Ambrose sent a letter to councillors urging the city and its police force to shut down the dispensaries. It was a message echoed by Public Safety Minister Steven Blaney.

In an e-mailed statement to the Globe and Mail, Ms. Ambrose denounced the bylaw arguing that it will increase marijuana use and addiction.

“Storefronts selling marijuana are illegal and under this Conservative government will remain illegal. . . Regulating marijuana in the same manner [as alcohol] could mean as much as tripling its use by youth,” she said.

In a riposte to Ms. Ambrose’s comments, councillor Geoff Meggs said that she is “completely out of touch with the realities on the ground.”

“The policies that you’re advocating are backwards and destructive and they’ve driven us to take the steps that are necessary here today,” Meggs said.

As of Wednesday, owners have 60 days to apply for a license and will have to qualify under strict criteria, such as criminal record checks and limits on where their shops can be located.

Under Vancouver’s new system, retail pot stores will be charged with an annual licensing fee of $30,000. They must also be at least 300 meters from schools, community centres and other dispensaries or compassion clubs. Other restricted areas include the Downtown Eastside, Chinatown and Granville entertainment district.

The license fee will be lowered to $1,000 for non-profit compassion clubs that also offer “non-marijuana health services” such as nutritional counselling, acupuncture and massage therapy. In cases where the city must break up a group of shops that are clustered too close together, compassion clubs will also get a priority over so-called profit shops, which don’t provide such services.

The city, however, did uphold a ban on the sale of edible products, citing the risks of children being lured into buying cookies and candies laced with marijuana. Sealed oils and tinctures, though, can be sold to those wanting to make their own edibles at home.

Over the past several years, springing up in a legal vacuum sparked by an ongoing court challenge to new federal government rules on medical marijuana, the number of retail pot stores have soared from just a handful to nearly 100 across the city.

In the face of Ottawa’s refusal to amend its drug policies, Mayor Robertson defended the council?s historic decision. “We are faced with a tough situation, a complicated situation,” he said, “because the federal government has failed to act on regulating medical marijuana appropriately. We will be looking forward to some more sane policy out of Ottawa to deal with the gaps that currently exist.”