Staff Report: Analysis of City of Langford Approach To Recreational Cannabis Retail Sales

RECOMMENDATION

THAT Committee receive the report entitled “Analysis of City of Langford Approach to Recreational Cannabis Retail Sales” from the Community Planner and dated June 3, 2019 for information.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS I concur with the recommendation.

DIRECTOR OF PROTECTIVE SERVICES’ COMMENTS I concur with the recommendation.

OFFICER IN CHARGE, WEST SHORE RCMP’S COMMENTS I concur with the recommendation. T. P. (verbally approved)

PURPOSE OF REPORT

This report will summarize the approach Langford has taken to issuing Temporary Use Permits through a Request for Proposals process for recreational cannabis retail sales. Langford refers to recreational cannabis as ‘non-medicinal cannabis’ but they are to be considered interchangeable terms. The report will also summarize other municipalities’ approaches and make a recommendation moving forward regarding process for approvals and cost-recoveries associated with this potential land use.

BACKGROUND

This report is in response to Council’s request for options for approving recreational cannabis retail uses within the Town. The City of Langford has taken a different approach from the majority of the CRD municipalities’ plans to use the traditional rezoning process for each retail location.

PROJECT DESCRIPTION

The City of Langford’s approach to approving recreational cannabis retail sales has been to initiate what they are referring to as the ‘pilot program’ and issue a Requests for Proposals (RFP) for response from prospective cannabis retailers. The successful proponents will be issued Temporary Use Permits for cannabis retail sale, which are valid for 3 years and then a further 3 years after a renewal of the permit. Langford is open to permanent rezoning after this trial period, should they deem it successful.

The logic behind this approach is as follows (referencing attached April 30, 2018 Staff Report to Council):

• Council could limit the overall number of outlets within the community
• Allow for a “pilot” period
• Impose conditions to mitigate possible negative effects
• Provide an opportunity for community feedback

The report also identifies ‘guiding principles’ regarding the location of retail sale of recreational cannabis products:

• 500 metres of any other location where the retail sale of Cannabis Products for non-medicinal use has been authorized (with the exception of Goldstream Avenue, where two locations may be considered);
• 300 metres of any school;
• 300 metres of any group daycare;
• 150 metres of Centennial Park, Veterans Memorial Park, City Centre Park, Westhills YMCA, any regional or Provincial park, or Langford, Glen or Florence Lakes; and,
• 50 metres of any land zoned R1 (One-family Residential) or R2 (One- and Two-Family Residential), except within the designated City Centre.

The number of stores in Langford has been capped at 5 as per the staff recommendation, and this has resulted in one store per each significant commercial retail node in Langford.

The RFP identifies challenges to authorizing the retail sale of recreational cannabis:

1. Determining the number of locations, if any, where the retail sale of Cannabis Products for non-medicinal use should be permitted within the City’s boundaries;
2. Determining the appropriate location(s), if any, where the retail sale of Cannabis Products for non-medicinal use should be permitted within the City’s boundaries;
3. Identifying and addressing the neighbourhood impacts of permitting in a particular location within the City’s boundaries the retail sale of Cannabis Products for non-medicinal use;
4. Funding training costs for police and bylaw enforcement officers in addressing: a) Nuisance issues relating to public use of Cannabis Products for non-medicinal purposes; and, b) Impairment issues relating to public use of Cannabis Products for non-medicinal purposes;
5. Funding policing, bylaw enforcement, and administrative costs associated with; a) Ensuring that the retail sale of Cannabis Products for non-medicinal use in a particular location is in compliance with the Regulatory Framework and all applicable City bylaws; b) Addressing nuisance issues relating to public use of Cannabis Products for non-medicinal purposes; and, c) Addressing impairment issues relating to public use of Cannabis Products for non-medicinal purposes; and,
6. Funding educational initiatives and materials associated with the above impacts and related social concerns.

A large part of the rationale for issuing an RFP is related to the Province not stating that it will provide additional resources to local governments to offset the anticipated increase in administrative and policing costs. As the report states in reference to the lack of firm financial support:

Council, therefore, may wish to ask, as part of the application process, for each potential cannabis retailer to provide their proposed plan for financially assisting the City with policing and bylaw enforcement costs, including the costs of additional training and administrative costs, associated with:

• Ensuring that the retail sale of Cannabis Products for non-medicinal use in a particular location is in compliance with the Regulatory Framework and all applicable City bylaws;
• Minimizing the impact on the neighbourhood of the retail sale of Cannabis Products for nonmedicinal use;
• Addressing nuisance issues relating to public use of Cannabis Products for non-medicinal purposes;
• Addressing impairment issues relating to public use of Cannabis Products for non-medicinal purposes; and,
• Providing educational initiatives and materials associated with the above impacts are related social concerns.

Langford’s goal is to recover these costs with cash contributions made by the successful proponents. Langford has not made public the nature of the financial contributions that the five successful proponents have made.

ISSUES AND ANALYSIS

Langford’s rationale for the Temporary Use Permit is based on considering a trial period for recreational cannabis retail, imposing conditions on the use, allowing for public engagement, and limiting the number of outlets within Langford.

There are several important considerations for Council in the application of this approach to approving recreational cannabis uses within the Town of View Royal.

Zoning vs Temporary Use Permit and Community Feedback

Issuing a Temporary Use Permit for the stated trial period reasons would be a departure from the Town of View Royal’s traditional process of approving permanent land uses. Staff believe that the proper tool for approving what is to be a permanent use within the Town is a rezoning and associated Public Hearing. While Langford’s TUP approach is cautious, there is the argument to be made that caution is unwarranted based on the region’s experiences thus far with cannabis retail outlets.

There has been an abundance of fear of the recreational cannabis retail use that has proven to be largely unwarranted in the region. The City of Victoria has had retail outlets operating for years with little to no apparent issue. Indeed, the stated goal of federal and provincial legislation to this end has been to reduce the burden on law enforcement, the reduction in criminal activity, and the transparent application of mitigating public health measures.

Staff believe that these retail stores are no more socially impactful than liquor stores; uses that receive far less scrutiny at the rezoning stage. The uncertainty for a retailer in the tenuous three to six-year trial period associated with TUPs is unnecessary, represents poor customer service and is an improper application of the instrument. The rezoning process, complete with a Public Hearing, is the Town’s standard for public engagement and Council scrutiny in approving land uses.

Should Council desire increased public engagement around individual applications, it is possible for Council to require this of the applicant in advance of the approval of a rezoning. It is also possible that the Province will require additional public engagement as a condition of the issuing of their retail licensing. The City of Victoria has been required by the Province to provide proof of additional public engagement beyond a Public Hearing. It remains to be seen whether View Royal would be subject to the same requirement.

Bidding on an RFP vs Business License Fees

Langford’s stated reasoning for accepting cash contributions as part of the RFP process is to offset the costs of their identified challenges in authorizing retail sale of recreational cannabis. The traditional way of accomplishing this is through the business licensing fee, which is collected yearly. To take Langford’s approach of accepting bids from multiple proponents is to reduce transparency and predictability in that process. The practise could be considered ‘selling zoning’ where the goal is no longer cost recovery but potentially ‘highest bidder’ where the funds received exceed the costs of the business to the municipality. A cost-neutral business licensing approach based in some level of impartiality and objectivity is the provincially mandated approach for municipalities and is the Staff-recommended approach.

Imposing Conditions

In previous reports Staff has taken the position that the Provincial licensing process, zoning regulations and Form and Character Development Permit requirements are sufficient for ensuring the retail locations operate in a manner consistent with established commercial retail uses.

Limiting the Number of Retail Stores

Langford’s stated goal of limiting the number of retail stores can just as easily and effectively be accomplished through the rezoning process.

Other Municipalities Approaches

Victoria, Saanich, Esquimalt, Highlands and Sooke are requiring site-specific zoning, or have intentions to do so.

Central Saanich will be considering zoning amendments after a proponent has operated a retail cannabis business after two years under a Temporary Use Permit.

North Saanich, Oak Bay, Sidney and Metchosin are undecided as to their approaches.

Business license fees vary dramatically depending on the location. The City of Langford is not recovering costs through the business license process and are therefore charging the same as any other commercial business retail license. The City of Victoria is charging $5,000, the City of Vancouver is charging just over $33,000.

Staff would require time to research the anticipated costs associated with retail sale of recreational cannabis in View Royal before recommending a justifiable fee for a business license.

Cost Sharing

Currently, the Union of British Columbia Municipalities (UBCM) is surveying local governments in BC regarding their anticipated costs related to cannabis legalization. These surveys will support UBCM’s discussions with the Province related to excise tax sharing. More information on that process can be found here: https://www.ubcm.ca/EN/main/resolutions/policy-areas/community-safety/marijuana-regulation.html

There is the potential for the Province to share tax revenue with municipalities to further offset the costs of permitting these uses.

DISCUSSION

The Langford approach, in staff’s opinion, does not accomplish anything a traditional approach to a rezoning cannot. Staff believes that a permanent rezoning provides:

1. better and more certain customer service by providing a permanent land use;
2. a more transparent business licensing process to offset the costs of development; and
3. the same certainty over conditions of use and numbers of retail stores that a TUP would.

Staff recommends the following approach to retail recreational cannabis sales in View Royal:

1. That a site-specific rezoning process be used to establish the use.
2. That a business license fee (and potential for excise tax sharing) be researched and proposed based on a cost-recovery basis for the operation of such a retail establishment in the Town.

RECOMMENDATION

THAT Committee receive the report entitled “Analysis of City of Langford Approach to Recreational Cannabis Retail Sales” from the Community Planner and dated June 5, 2019 for information.

SUBMITTED BY: J. Davison MCIP RPP, Acting Director of Development Services

ATTACHMENTS

1. Draft Temporary Use Permit No. TUP19-0001 – City of Langford, March 2019
2. Staff Report to Council – Retail Sales of Cannabis and Cannabis Related Products – City of Langford – April 2018
3. RFP for the Retail Sales of Cannabis and Cannabis Related Products – City of Langford