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Kamloops council sets cannabis business licence fee at $5,000 per year

By comparison, owners of beer and wine stores pay $196 for the same annual fee
public hearing
Kamloops council was busy on Aug. 28 with three issues at a public hearing. Coun. Denis Walsh (second from right) recused himself during the cannabis business licence discussion due to a potential conflict of interest.

The City of Kamloops is nearly prepared for legalized recreational marijuana after council set a business licence fee following a public hearing on Tuesday night at Sandman Centre.

The city has now changed its zoning bylaw and included retail cannabis in its regulations for business licences ahead of legalization, which is set for Oct. 17.

“We know that there are some other bylaws that need to be tweaked, but as far as retail cannabis sales, I think we’re pretty close to the end point,” business licence inspector Dave Jones told KTW. “Now it’s just a matter of educating staff and determining how we move that forward.”

Following the public hearing, council set the annual business licence fee for cannabis stores at $5,000 and the permit application fee at $1,600.

The vote was 6-1 in favour of the fees, with Coun. Tina Lange opposed and Coun. Denis Walsh recusing himself due to a possible conflict of interest. Walsh owns a building downtown with empty space and said he has received calls from potential cannabis retailers. He said he is also considering entering the recreational marijuana market. Coun. Pat Wallace was absent rom the meeting.

Lange said the pricey business licence fee will hurt an estimated 12 to 20 business owners trying to start up.

No prospective cannabis retailers spoke at the hearing, which saw just one member of the public address council.

Jennifer Adams, who is running for a council seat in the upcoming municipal election, described the fees as unfair to people who will be regular business owners.

The permit application fee matches that paid by owners of beer and wine stores, but the $5,000 business license fee is much higher than its liquor store equivalent of $196.

Mayor Ken Christian has described the $5,000 fee as a placeholder while cities await word on what the revenue-sharing split with the provincial government is going to be. Municipal costs related to cannabis could include policing, zoning and social services.

Adams asked if the city would consider lowering the fee once it knows if some of those costs are going to be covered by the provincial government.

“We should be having all legal businesses with similar fees,” Adams told council.

Christian said he shared her concerns regarding the amount, noting the $5,000 was staff’s recommendation after reaching out to similar-sized cities dealing with the same issue.

“This is, at best, a placeholder and, just like any of our bylaws, they can be reviewed by us or a future council,” Christian said.

Lange said the $5,000 fee is high. She said she owned a liquor store and knows the cannabis shops will have plenty of other expenses.

“I can see that down the road if there was huge issues, that then we would increase [the fees], but to do it ahead of time is punitive,” Lange told her fellow councillors.

The fact no prospective cannabis retailers spoke at the hearing indicated to Coun. Arjun Singh that keeping the fee at $5,000 is appropriate.

Lange suggested the dearth of cannabis retailers at the public hearing may have been the result of them being afraid to come forward and debate the fee out of fear council “may not like them as much when they came to open up their store.”

“Please be assured that every cannabis application will be adjudicated with an open mind by this council,” Christian replied.

Jones told KTW he believes it will take a few years before the cost of recreational cannabis to the city will be known.

“The $5,000 will probably recover some of those costs. I don’t believe it’s going to cover them all and that’s an opportunity for us to document and determine whether we can lower [the fee] in a couple years,” Jones said. And if we can’t, then how much money can we receive from the province to reduce some of those costs?”

A large portion of that business licence fee will likely be used to educate business owners, the public and bylaw officers about the new rules for cannabis, he said.

Jones said there will be additional staff time needed from his department, particularly when edibles are legalized next year.