Smoke clearing on cannabis business licences

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By Trevor Busch
Taber Times
tbusch@tabertimes.com

With potential business owners currently left guessing about the town’s approach to cannabis land use regulations, town council is at least providing clarity on the business licensing front after confirming amendments at third reading.

On May 28, town council passed first reading of Business License Bylaw 14-2018. While a public hearing was not required for a business licence bylaw, at the time administration “strongly suggested” that second and third readings be held after the public hearing of Cannabis Land Use Amendment Bylaw 13-2018 on June 25, as some of the concerns potentially raised at the public hearing by council or the public, “may be better addressed through the business license bylaw rather than the land use bylaw.”

As a footnote to that discussion, at their July 16 regular meeting town council defeated Cannabis Land Use Amendment Bylaw 13-2018 at second reading in a 3-3 tie vote, leaving administration to start from scratch on a new land-use amendment bylaw in relation to cannabis regulations. Council’s decision now leaves a significant hole with regard to cannabis-related land use, especially with an Oct. 17 legalization date now looming. The town’s new bylaw is expected to be presented to council for first reading at their Aug. 20 regular meeting.

“In association with the land use bylaw, it was also determined that changes would be required to the current business license bylaw in order to be prepared for the legalization of recreational marijuana uses,” said planning director Phyllis Monks, addressing council later in the meeting on July 16. “As a result, we did some changes in order to ensure that the operation of these businesses would be council approved. Administration has added definitions and licensing procedures to the bylaw that reflect the new legislation while allowing for fees to be charged for the processing requirements for licensing under the bylaw. Items addressed in the amendments include a requirement for background and police checks, creation of a license process, fees for licences, and to set the hours of operation. Staff believe the changes that have been made will reflect and compliment the new legislation, and the bylaw will be ready for us to move forward.”

On May 14, council had directed administration to remove all references to cannabis lounges from the bylaw. Earlier in January, council increased local regulations on the business license process by including a separate business license for cannabis-related businesses, requiring police checks, and “any other necessary regulations administration believed were warranted.” Additionally, direction was given to moderately increase business license fees associated with cannabis businesses.

In March, council limited the hours of operation for cannabis retail sales from 10 a.m. to 10 p.m., with preferred licensing fees of $500 per year for cannabis retail sales, $1,000 per year for cannabis lounges, and $2,500 per year for cannabis production and distribution. Council discussion on May 28 had focused on the wording surrounding business hours of operation, with some councillors seeking enhanced clarity in the language.

Other cannabis-specific changes have included cannabis-related use definitions (Part 1), specific regulations around cannabis-related uses (Part 6), separate application for cannabis-related uses (Schedule B), and a revised fee schedule (Schedule C). The changes are in alignment with best practices established by the Federation of Canadian Municipalities and the Alberta Urban Municipalities Association. Some of those regulations for retail sales include proof of federal/provincial approvals and licenses, a security plan and proof of a security alarm contract, police information checks for owners or employees, prohibition of minors under the age of 18, a ban on all advertising and signage other than the company name and logo, no consumption permitted on the premises, no online sales or home delivery, and “transparent storefronts.”

In an April letter to former planning director Andrew Malcolm which was reviewed by council on May 14, Taber Police Service Chief Graham Abela called for significant increases to business license applications for cannabis-related uses as a method for the police to recoup anticipated costs of enforcement.

“As the chief of police, I am certain that there will be costs associated to the Taber police in the enforcement of cannabis-related activities in the community. There are few ways in which the municipality can recoup the costs associated with cannabis activities, except through the licensing requirements for the businesses that benefit from cannabis sales.”

“In jurisdictions where cannabis is currently legally sold, the increased regulations required to administer cannabis have placed greater strains on the police and the provincial and federal governments have not said how the revenue collected from taxation will trickle down to the municipality.”

Abela noted enhanced costs associated with training ($7,000 per officer), drug testing ($40 per test), enforcement, and prosecution.

“There are few, if any, alternatives in the MGA to recoup these costs… we would urge council to adopt a business licensing application fee and a yearly licensing fee for cannabis-related business endeavours, commensurate to cover some of the costs associated with the enforcement of this industry.”

Administration did not agree with Abela’s recommendations, which could be interpreted as a defacto attempt at municipal prohibition by making cannabis-related business license fees cost prohibitive to potential entrepreneurs.

According to a statement provided by administration in the past, “the legalization of cannabis will likely have significant financial implication for the municipality. However, it is unlikely that the financial implications can be reasonably recouped through business license fees.”

Following discussion, council voted unanimously to give third and final reading to Bylaw 14-2018. Coun. Garth Bekkering was absent.

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