Vancouver cannabis retailers breathed a sigh of relief Thursday evening as city councillors agreed to review the annual fees they pay to the city.
City staff will review the $34,000 licensing fee, the highest for any cannabis retailer in the country, and prepare a report for council. This is expected to reduce the annual fee by up to tens of thousands of dollars.
Weed retailers likely won’t see a change in fees before January 2022, said Coun. Rebecca Bligh in an interview last week. Bligh first brought the motion to the standing committee on policy and strategic priorities Feb. 10. On Thursday, the motion — which included Mugglehead’s reporting on pot shop licensing fees across Canada — passed unanimously.
Councillors heard from speakers Feb. 10 and Feb. 18, all who strongly supported reviewing the fees. Following pandemic protocol, all communication took place online via a livestream conference.
After hearing from speakers, councillors talked about how the fee seemed inequitable and how they wanted to support the city’s small businesses.
Vancouver has an opportunity here to shift from being a gate keeper to a partner with the regulated cannabis industry, Coun. Michael Wiebe said.
Passing this motion will send a message to the regulated industry that the city supports it and wants to see if grow throughout the economic downturn of the Covid-19 pandemic, Bligh said.
These retail fees eat up 35 per cent of our gross profit, Up In Smoke co-owner and president of Association of Canadian Cannabis Retailers Matthew Greenwood told council. When Up in Smoke opened in 2020, Greenwood says he asked the city to be able to pay the fee in monthly instalments, which would have made a “world of a difference for our small business.” His request was rejected.
Greenwood says these fees could push retailers into the unregulated market if they are unable to afford all of the fees levied by the city.
The $33,958 annual retail licensing fee is a carry over from the 2015 Medical Marijuana-Related Uses bylaw, when Vancouver had to shoulder all costs of regulation. Post-legalization, the province took over all regulation and enforcement but the fee stayed the same.
A liquor store pays $492
A comparable industry, a liquor retail store, pays an annual licensing fee of $492. On the other hand, the massive amusement business of the Pacific National Exhibition pays $18,856.
No justification for these fees for cannabis retail, in marked contrast to fees for the distribution of alcohol, the more dangerous of these two drugs. https://t.co/dPFfj6G1hZ
— Neil Boyd (@NeilBoydSFU) February 19, 2021
Mike Babins, co-owner of Evergreen Cannabis, Vancouver’s first regulated weed store, told council the annual fee is equal to a living wage for a full-time employee. He says his store needs at least three more employees, and could afford to hire one more with a lower fee. After three years Babins has paid over $100,000 to the city but hasn’t seen any returns.
“I want us to be treated the way any other business would be treated,” he told council. “There’s no reason on paper why we should be paying so much more than any other store.”
When he asked why the fees are so high, Babins says he was told it was because the province wouldn’t share excise tax revenue with the municipality. But licensing fees are only supposed to be used to recoup the cost of regulating and overseeing a business, he explains.
Sunrise Cannabis founder Ehren Richardson spoke in support of reviewing the fees. Sunrise Cannabis opened in 2015 under the MMRU and ran multiple social programs, including offering low-barrier employment for people with developmental disabilities, donating to harm reduction initiatives and offering reduced prices to seniors on supplemental income, he says.
Sunrise had to close to restructure itself when Canada legalized cannabis and was only able to reopen three weeks ago, Richardson continued.
The store has had to cut a lot of its social services and today only employs eight people, whereas before legalization it employed 30. The small business is operating in the red and even had to raise money from their families to reopen the store, according to Richardson.
“Small operators need help, not in 2022 or 2023, but now. Pure and simple these cannabis retailer fees are unfair, unjustified and an insult.”
Top image of Vancouver City Hall in June 2011. Image by Kelam via Wikimedia Commons