Attachment A: REVIEW OF BUSINESS LICENSE FEES FOR CANNABIS RETAIL STORES
Detailed staff review of regional cannabis retail fees and the recommendation to reduce View Royal's current $7,500 fee.
TOWN OF VIEW ROYAL PLANNING, DEVELOPMENT AND ENGAGEMENT REPORT
TO: Committee of the Whole DATE: Sept. 6, 2023 FROM: J. Chow, RPP, MCIP Senior Planner MEETING DATE: Sept. 12, 2023
REVIEW OF BUSINESS LICENSE FEES FOR CANNABIS RETAIL STORES
RECOMMENDATION:
THAT the report titled “Review of Business License Fees for Cannabis retail Stores” from the Senior Planner dated September 6, 2023 be received for information.
PURPOSE:
The purpose of this report is to reconsider the annual business license fee for cannabis retail stores.
TIME CRITICAL:
If an amendment to the business license fee for cannabis retail stores is supported, Fees and Charges Bylaw, No. 958, 2016 should be amended by the end of November in time for the 2024 business license renewals to be sent out in December.
EXECUTIVE SUMMARY:
The annual business license fee of $7500 set in 2020 for cannabis retail stores now exceeds the next highest fee in the Capital Region by more than $5500. Early concerns about the need to fund additional education and enforcement have not manifested over the past three years. The Westshore RCMP has found that cannabis retail stores in general have been well managed in the West Shore with no major issues.
Staff recommends changing the business license fee for cannabis retail stores to $2000. While it would leave View Royal with the highest fee in the region (but now tied with Township of Esquimalt), this would match the Town’s fee for drug paraphernalia businesses, as the Cannabis Control and Licensing Act permits cannabis retailers to sell cannabis accessories.
BACKGROUND:
Non-medical cannabis
The federal government legalized non-medical cannabis across the country in October 2018. The Province subsequently enacted the Cannabis Control and Licensing Act to address production, manufacturing, distribution, sale and consumption. The provincial Liquor and Cannabis Regulation Branch (LCRB) oversees non-medical cannabis regulation. In 2020, the Town amended several bylaws in accordance with the legislation to address production, land use, signs, screening, and business licensing.
Business licensing
S.194 of the Community Charter assigns councils the authority to regulate business. All businesses operating in the Town, including home-based and mobile, are required to have a valid business licence. This ensures that business locations are safe and meet land use requirements.
The Town’s regulatory approach
The Town has taken the approach of using rezoning and business license fees as the tool for approving recreational cannabis retail uses. Guidelines (Attachment 1) have been adopted to set out location criteria that would inform the zoning process and establish expectations for applicants. A specific business license fee for cannabis was set to offset potential costs for education programs and increased enforcement.
DISCUSSION:
Motion C-83-22 was passed at the September 6, 2022 Council meeting to direct staff to review the Town’s cannabis business license fees. This report addresses the following:
- How the business license fee was established
- Fees in the region
- Cannabis retail stores in the Town
- Westshore RCMP experience with cannabis retail stores
- Options
1. How the current fee was established
Business licence fees are established to cover the general cost of administration, bylaw enforcement, policing and the necessary reviews and inspections to related bylaws concerning business operations.
In April 2020, Fees and Charges Bylaw, No. 958, 2016 was amended to establish a business license fee of $7,500 per year for cannabis retail stores. Staff had proposed a business license fee $10,000 to fund education and enforcement because at the time, the several municipalities were piloting cannabis retail stores in advance of provincial regulations. Comparable business license fees were $33,000/year in Vancouver (reduced to $5000 in 2023) and $5,000/year in Victoria (now $1500 as of 2023). City of Langford’s pilot program was administered through a Request for Proposal process utilizing temporary use permits.
2. Fees in the region
Most municipalities in the Capital Region apply regular commercial business license fees to cannabis retail stores and are typically in the $100 to $200 range. Four municipalities including View Royal have specific fees as shown highlight in Table 1. Even among these, the Town’s fee is an outlier.
| Jurisdiction | Business category | Annual fee |
|---|---|---|
| Central Saanich | Cannabis retail (temporary use permit only) | $100/$200 |
| Colwood | Commercial, small/large | $125(small)/$200(large) |
| Esquimalt | Cannabis retailer | $2000 |
| Highlands | Cannabis sales | Not permitted |
| Langford | Commercial, based on gross floor area | One time $100-$200 |
| Metchosin | Cannabis sales | Not permitted |
| North Saanich | ALR Cannabis production and sale | $500 |
| Oak Bay | Retail sale of cannabis | Not permitted |
| Saanich | Commercial, small/large | $100(small)/$200(large) |
| Sidneya | Cannabis retail - commercial, small/large | One time $100/$200 |
| Sooke | Commercial, small/large | $125/$250 |
| Victoriab | Storefront cannabis retailer | $1500 |
| View Royal | Cannabis retail store | $7500 |
a plus LCRB license assessment fees b Special one-time rezoning fee of $7500
3. Cannabis retail stores within the Town
There is only one location zoned for cannabis retail store use, which is Rise Cannabis at Admirals Walk Shopping Centre. No other applications for rezoning to permit cannabis retail store use have been received.
4. Westshore RCMP experience with Cannabis Retail Stores
Westshore RCMP provided the following responses to staff questions:
a. What issues or concerns have arisen for the Westshore RCMP regarding cannabis retail in View Royal?
There does not appear to be any concern regarding Cannabis retail stores in View Royal. There is only 1 Cannabis Store in View Royal, Rise Cannabis, which has had 5 calls for service. Nearby Songhees Cannabis Store has had 3 calls for service.
b. How many calls have there been to the cannabis retail store in View Royal?
Overall, Cannabis related files in the West Shore total 133 calls for service since January 1, 2020, of these, only 13 calls were in the View Royal jurisdiction. (The year 2020 was picked as this is when the Cannabis stores opened in View Royal).
c. Has there been increased enforcement costs with regard to the Rise cannabis retail store in View Royal since it opened around May 2020?
No
d. What has been the Westshore RCMP experience with cannabis retail stores in general?
Cannabis retail stores in general have been well managed in the West Shore with no major issues.
e. Is Westshore RCMP aware of any cannabis education campaigns that have been conducted in View Royal?
The first year Cannabis was made legal in October 2018, West Shore RCMP had a dedicated a Cannabis Education and Enforcement Officer who did run several police-led educational talks/information sessions. This position was later changed to youth outreach officer. The Government of Canada also embarked on an educational campaign regarding Cannabis. Aside from the first year Cannabis was made legal (October 2018), we are not aware of any educational campaigns.
f. Does the Westshore RCMP recommend conducting education campaigns and who would conduct them -RCMP, Town or provide funding to others?
The public appears to be well informed about Cannabis regulations as the law was passed nearly 5 years ago. There does not appear to be a need for Cannabis education at this time.
5. Options
The business license fee schedule is shown below in Table 2.
Table 2. Business License fees (Fees and Charges Bylaw, No. 958, 2016 excerpt)
| Item Detail | Fee | Fee Description |
|---|---|---|
| Home Crafts | $50.00 | |
| Home Occupation | $100.00 | As per Bylaw No. 952 |
| Non-resident | $100.00 | |
| Commercial - small | $100.00 | Less than 464 m2 (5,000 ft2). As per Bylaw No. 952. |
| Commercial – large | $200.00 | 464 m2 (5,000 ft2) and larger. As per Bylaw No. 952. |
| Intermunicipal | $100.00 | As per Bylaw No. 952 |
| Intercommunity | $170.00 | As per Bylaw No. 952 |
| Apartments | $15 per unit (minimum $100) | As per Bylaw No. 952 |
| Pub | $500.00 | |
| Liquor sales | $300.00 | Off-site consumption. As per Bylaw No. 952 |
| Drug Paraphernalia | $2,000.00 | |
| Transfer place of business | $10.00 | As per Bylaw No. 952 |
| Late renewal of license | 10% or $25.00, minimum $25.00 | |
| Cannabis retail Store | $7,500.00 | As per Bylaw No. 1036 |
Should a change in the business license fees for cannabis retail stores be supported, options for consideration include the following:
- Changing the fee to $2000, same as a drug paraphernalia business
- Changing the fee to $300, same as for liquor sales
- Changing the fee to the same as regular commercial businesses, $100 for <464m² floor area and $200 for 464m²+ floor area),
Given that there has been no clear need to fund additional education programs or increased enforcement in relation to cannabis, staff supports changing the business license fees for cannabis retail stores from $7500 to $2000. This would match the annual fee for drug paraphernalia business, as the Cannabis Control and Licensing Act permits cannabis retailers to sell cannabis accessories. It would also be consistent with the business license fee adopted by the Township of Esquimalt; however, it would leave both municipalities with the highest fee in the region.
SUSTAINABILITY/CLIMATE CHANGE IMPACTS:
This issue has no significant sustainability or climate change impacts.
FINANCIAL IMPLICATIONS:
Annual business license revenues are approximately $58,000. There is one cannabis retail store and the business license fee of $7,500 for this business comprises 13% of the Town’s annual business license revenue. While changing the fee to $2000 would have a percentage impact on annual business license revenues, the reduced revenue of $5500 would be insignificant relative to the Town’s overall revenue.
ALTERNATIVES:
Alternatives include:
- Maintaining the existing fee of $7500 per year.
- Changing the fee to $2000, the same as a drug paraphernalia business.
- Changing the fee to $100 (<464m² floor area) and $200 (464m²+ floor area), the same as a regular commercial business.
CONCLUSION:
Staff recommend changing the business license fees for cannabis retail stores to $2000. This would match the annual fee for drug paraphernalia business, as the Cannabis Control and Licensing Act permits cannabis retailers to sell cannabis accessories. If an amendment to the business license fee for cannabis retail stores is supported, Fees and Charges Bylaw, No. 958, 2016 should be amended by the end of November in time for the 2024 business license renewals to be sent out in December.
| CONCURRENCE: | Initials | Comments |
|---|---|---|
| Chief Administrative Officer | KA | RECOMMEND APPROVAL |
| REVIEWED BY: | Initials |
|---|---|
| Director of Corporate Administration | n/a |
| Director of Finance | SV for DC |
| Director of Development Services | LT |
| Director of Engineering and Parks | n/a |
| Director of Protective Services | |
| Westshore RCMP | No concerns |
ATTACHMENTS:
- Town of View Royal Cannabis Retail Store Buffer Guidelines
Document Images
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