City signals support of $30K cannabis business licence fee, restricted operating hours

By Tyler Marr
July 25, 2018 - 8:00am

Round two of talks hashing out the cost for cannabis retail business licences went smoother than the first and ended with Prince Albert’s executive committee signalling its support to move forward on a $30,000 fee and to restrict storefront hours.

After nearly two hours of talks, which included a procedural challenge, the city's lawmakers voted 6-3 to roll out the city’s Cannabis Business Licence Bylaw with the steepest fees so far in the province and making P.A. the sole municipality to restrict operating hours to between 11 a.m. to 11 p.m. The provincial Cannabis Control Act will allow storefronts to operate from 8 a.m. to 3 a.m., though it leaves the door open for local authorities to tighten the times. The annual licence renewal fee will be decided next year, in order to gain a better understanding of associated costs and charge accordingly. Wholesale and production facility fees will be set at $2,500.

Councillors Dennis Ogrodnick, Charlene Miller, and Evert Botha were opposed the pricey fee, while Botha, Miller, and Terra Lennox-Zepp voted against the restricted hours, believing they should be in line with liquor outlets. The new bylaw will come back before city council at its next meeting for formal approval.

Administration initially proposed a $5,000 cannabis business licence fee and a $1,500 annual renewal for storefronts, but a hectic late June meeting saw councillors direct staff to return with a report on $30,000 fee, citing the fact sellers will have a near-monopoly on the market due to the cap on provincial licences. Staffers were hesitant on charging this amount, worried it would fall out of line with what the city is allowed to charge under The Cities Act. These arguments were maintained, amplified, and exhausted at length Tuesday, after administration returned with just a $10,000 recommendation and $100 renewal, calculating the cost of 350 hours committed to the process and charging accordingly, equating to roughly $25,000.

Director of Planning and Development Craig Guidinger said the Act states "the fee that would be established for licence, inspection, permit, or approval must not exceed the cost of the city in administering and regulating the activity.”

Mayor Greg Dionne interpreted the act differently. Since the province will not be sending inspectors, the mayor said the city has the right to charge for those eventual costs and said administration never factored that into the price.

"It clearly says we have the right to charge for those inspections,” he said, further defending the costs through the fact sellers will be easily able to cover the costs.

"There can't be ten pot stores in our city. There is two," Dionne told media after the meeting. "I don’t want pot costs [to come from] my taxpayers. It is a billion-dollar business so it should stand alone and pay for itself."

Dionne said the Board of Police Commissioners will forward a report to council outlining the projected inspection and enforcement costs and what will need to be recouped. The mayor was not alone in his thinking, as other municipal lawmakers believed the city had to find some way to recover future costs for policing and inspections. Others held trepidation over the notion that any money will trickle down from the province.

"We have talked to the government and they are not going to give us 10 cents," Ward 4 Coun. Don Cody, who sits as the city's representative for the Saskatchewan Urban Municipalities Association, said. "One of our big problems here is the government. They have not said, ‘here is the percentage you re going to get.’ If they did ... we wouldn’t be here."

On the other side, Ward 3's Botha said he was "struggling" with the high business licence fee and suggested that more licences are likely to come on to the market in the future, which will negate the de facto monopoly. He also did not believe the province will not pass along any of the proceeds.

"We need to look at the long-term share of the revenue rather than the immediacy of the recovery," he said.

Ward 5's Ogrodnick was solely in support of a cannabis fee equal to a regular $100 licence, but supported the restricted hours for a number of reasons.

Supporting the cost but not the hours was Ward 2s Lennox-Zepp. She also questioned why administration changed their recommended hours of operation from 8 a.m. to 10 p.m. and decided on 11 a.m. to 11 p.m. without backing it with a report or evidence.

“Good governance should be administration providing reports based on evidence and not changing just trying to guess what the decision of council will be,” she said. 

Also in attendance at the meeting was Jim Southam, president and CEO of Prairie Cannabis, one of the winners of the two retail permits available in Prince Albert. He addressed the executive committee and urged them to reconsider on both counts, warning restrictive hours could divert business to the black market, the exact thing legalized cannabis is looking to thwart. 

Speaking to media after the vote, Southam said he was glad to see council willing to revisit their cost decision in eight to 10 months, confident a bounty of new revenue will find its way to city coffers. 

“I am happy the city is moving forward and I hope there are no further delays in the process,” he said. “I think there are going to be a lot of growing pains around the province and country and we will work through them and educate each other.”

 

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On Twitter: @JournoMarr

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