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Provincial pot: Should all B.C. cities get the same piece of the tax revenue pie?

Reporter Nick LabaB次元官网网址檚 third and final instalment in his series on cannabis agriculture in B.C.

In this third and final part of Black Press MediaB次元官网网址檚 special series on cannabis agriculture, reporter Nick Laba explores the debate as to whether B.C. municipalities with less cannabis economy should get the same share of tax revenues as those with more, with a look ahead to the industryB次元官网网址檚 uncertain future.

If one thing is clear in the haze left by businesses scrambling to join the green rush this past year, itB次元官网网址檚 the wide range of attitudes municipalities have toward the growing industry.

An B次元官网网址淎gricultural Study TourB次元官网网址 is the first item on the program at this yearB次元官网网址檚 Union of B.C. Municipalities convention in Vancouver.

Its description includes challenges posed by increased development and land prices in the Fraser Valley, but notably omits a controversial crop thatB次元官网网址檚 sure to dominate discussions at the five-day summit in September: cannabis.

Regardless of their individual pot policies, local governments are eager to receive a share of the excise tax on cannabis products. However, the province still hasnB次元官网网址檛 announced how it plans to dole out these revenues, and not everyone agrees on what amounts to a fair share.

On Vancouver Island, the District of North Cowichan had zoning bylaws in place on day one of legalization, and it allowed producers like Broken Coast to be a first-mover in the cultivation market.

Mayor Al Siebring said the decision to act quickly was two-fold.

B次元官网网址淭he primary driver was the economic development side B次元官网网址 the notion that the community could benefit from this in terms of employment and things,B次元官网网址 he said. B次元官网网址淎nother side to it is if we donB次元官网网址檛 move on this, itB次元官网网址檚 going to happen anyway.B次元官网网址

Siebring said that because of the pre-existing culture of growing pot, they didnB次元官网网址檛 want a situation where a bunch of grows were continuing to operate illegally under the legal regime.

Broken Coast was acquired by Aphria Inc. in January for $230 million. The producer, which names its strains after B.C.B次元官网网址檚 Gulf Islands, employs around 100 staff and has expansion plans that could add another 200 jobs.

In contrast, the City of Richmond back on the mainland has yet to approve any cannabis facilities B次元官网网址 production, processing or retail B次元官网网址 within its city limits. A single cultivator, Emerald Therapeutics, won a legal challenge from the city to operate on agricultural land last fall.

Other municipalities canB次元官网网址檛 even agree if theyB次元官网网址檙e supporting the industry or not.

B.C. VIEWS:

Just a stoneB次元官网网址檚 throw from downtown Squamish, along the Sea to Sky corridor, growers with personal cultivation licences are continuing to operate among the stumpy buildings of its industrial park.

Several of them say they want to apply to become licensed producers, but zoning restrictions prevent them from upgrading their existing grows or finding sites to build new ones.

At Pacific Northwest Garden Supply, the store equipping most of SquamishB次元官网网址檚 growers, co-owner Chris Leboulch said heB次元官网网址檚 approached a city staffer several times looking for a suitable lot to purchase.

B次元官网网址淪heB次元官网网址檚 like, B次元官网网址極h, thereB次元官网网址檚 lots of places.B次元官网网址 IB次元官网网址檓 like, B次元官网网址榃ell, tell me where they are,B次元官网网址橞次元官网网址 Leboulch said. B次元官网网址淚B次元官网网址檝e been looking for eight months, and nothing B次元官网网址 zero, zip. If I had a spot, I would sign up right now.B次元官网网址

Pacific Northwest Garden Supply sells hydroponic equipment and nutrients to most of SquamishB次元官网网址檚 growers. (Nick Laba/Black Press Media)

The City of Squamish disagrees its zoning requirements prevent new licensed cultivation sites, and said it hasnB次元官网网址檛 received any requests to rezone.

B次元官网网址淭he current change in zoning has taken a proactive, yet cautious approach to the evolving cannabis production industry, but it has also left the door open for variances to be considered as applications come forward,B次元官网网址 city staff said in an email statement.

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Fair share of the pot pie

Civic leaders across B.C. have expressed frustration with the province for being slow to announce its scheme to share the cannabis excise tax with municipalities, which are responsible for much of the related policy and enforcement.

Of the 10-per-cent tax, the federal government takes 2.5 per cent. The remainder goes to the province, with the understanding that a portion will go to local government. In a statement last July, the Union of B.C. Municipalities proposed they should get almost half of the projected $125 million over the first two years.

People in the industry say municipalities that prohibit the industry shouldnB次元官网网址檛 get a piece of the pie, and Siebring agrees.

B次元官网网址淭o me, that makes total sense because the reality is that when you have these kinds of operations, be they dispensaries or agricultural operations, there are potentially some security concerns and increased RCMP costs,B次元官网网址 the North Cowichan mayor said. B次元官网网址淚f you donB次元官网网址檛 have them and youB次元官网网址檙e not bearing those costs, why would you grab a share of that revenue?B次元官网网址

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Municipalities like Richmond counter by saying all civic governments should receive a significant share of the revenue to offset extras costs for policing, bylaw enforcement, training, community education and outreach.

In the Township of Langley, where production giant Zenabis received a licence for its two-million-sq.-ft. greenhouse complex in August, Coun. Nathan Pachal said the simplest solution is per-capita.

B次元官网网址淚f you try to get more complicated than that, I think things get really messy, really quick,B次元官网网址 he said.

B次元官网网址極vertaken by the EastB次元官网网址

As the legal market rounds out its first year, much uncertainty remains for the future of the plant with such deep roots running through the province.

With the global trend of liberalizing weed laws, will B.C. bud continue to make a stamp on the world stage, or will the name be preserved only in marketing clich茅s?

B.C. could lose out to more progressive provinces, according to Pasha Brands government relations director Susan Chapelle, whose Vancouver-based company works with prohibition-era growers and lobbies for the craft industry.

B次元官网网址淣ew Brunswick has opened up cannabis. ThereB次元官网网址檚 500 jobs in their industrial park outside of St. Andrews, with tilapia farming and aquaponics,B次元官网网址 she said. B次元官网网址淸Their mayor] opened the world cannabis conference with, B次元官网网址榃eB次元官网网址檙e celebrating this economy.B次元官网网址 British Columbia built this economy and now weB次元官网网址檙e being overtaken by the East.B次元官网网址

Susan Chapelle owns an integrated health clinic in Squamish. During her time as a city councillor, she helped to implement progressive zoning bylaws. (Nick Laba/Black Press Media)

Chapelle said the cannabis economy adds high-paying tech jobs and offers an alternative to todayB次元官网网址檚 housing-dependent rural economies, which would collapse if development slows.

Tantalus Labs CEO Dan Sutton B次元官网网址 who said his Maple Ridge facility started getting pushback only after residents found out it was going to grow cannabis B次元官网网址 predicts public perceptions will soften as the industry develops.

B次元官网网址淚 think that we will have hundreds of outdoor cannabis farms in British Columbia, actually in production, letB次元官网网址檚 say over the next five years,B次元官网网址 he said. B次元官网网址淚n that timeline, itB次元官网网址檚 also entirely reasonable that we will see farm gate sales. This is something that was promised by the [BC] NDP.B次元官网网址

Farm gate sales, similar to tasting rooms at wineries, allow customers to drive up and talk to the people who make a product. Sutton said this will help ease the stigma as well.

Tantalus Labs in Maple Ridge has around 30 full-time employees and hires temporary workers for labour-intensive harvests. (Nick Laba/Black Press Media)

There are already dozens of websites for cannabis tourism companies waiting for laws to allow them to take members of the public to visit cultivation sites.

But with such a high value crop moving into mainstream agriculture, there are bound to be consequences.

Canada has enough arable land that food security wonB次元官网网址檛 be an issue, said Martin Collins, policy and planning director for the Agricultural Land Commission. What it likely will do, is increase the price of farmland.

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B次元官网网址淵ou donB次元官网网址檛 pay $150,000 an acre for farmland to put your cow out there,B次元官网网址 he said. B次元官网网址淔armland values are negatively affected, in terms of value, by the highest-value ag crop, and the trouble with cannabis is itB次元官网网址檚 so valuable. ItB次元官网网址檚 going to distort land values for agriculture.B次元官网网址

As its first year goes up in a puff of smoke, the first chapter in the book of legal bud has barely been written. Many more stories are still to come.

Read the other two instalments:

Nick Laba is a 2019 graduate of the Langara College journalism program. He pursued this investigative series in partnership with Black Press Media.


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