New cannabis laws will have big impact on local governments

Mel Rothenburger is the TNRD Director for Electoral Area P, including Whitecroft and Heffley Creek. He was the mayor of Kamloops from 1999-2005 and a former newspaper editor.

Local governments need to prepare for the impacts of a major new industry as Canada moves toward changes in marijuana laws.

A presentation by Denise McCabe and Kaitlynn Cumming of Fulton & Company was one of the most interesting sessions I attended during the annual convention of the Southern Interior Local Government Association at Sun Peaks recently.

The purpose of Bill C-45, the Cannabis Act, is to reduce organized crime, restrict youth consumption and allow for legalized recreational use of marijuana.

Whether or not it accomplishes all of those things, another result will be the creation of an industry conservatively estimated at $22.6 billion.

As the existing medical marijuana industry expands into recreational marijuana, production will increase 10-fold.

This rapid expansion won’t be through Mom and Pop operations but largely via mega-farms. McCabe gave one example of plans for an indoor growing facility close to 790,000 sq. ft. on 30 acres of property.

An existing producer in Nanaimo, licensed for medical marijuana, has a 600,000 sq. ft. facility and is poised for the so-called “green rush” of recreational use.

This is more than a matter of curiosity to municipalities and regional districts. As McCabe and Cumming explained, cities have to be prepared for a host of trickle-down impacts as the Cannabis Act moves toward adoption and implementation.

One of them will be a potential explosion in storefront dispensaries. In Denver, Colorado — about the size of Vancouver — storefronts had to be capped at 1,000 after marijuana was legalized for recreation in 2012.

Opening hours are also regulated for marijuana stores there, and laws restrict when and where you’re allowed to consume the product.

In some jurisdictions, marijuana stores take the form of coffee shops or smoking lounges. Will Canadian beer and wine stores be able to sell marijuana?

The two Fulton lawyers explained that local governments will likely have to fill in many of the gaps that may not be prescribed in the upcoming federal legislation — things like odour control, fire safety, quality control, nuisance properties, zoning and enforcement, many of which will be matters for local bylaws, including building bylaws and community plans.
And here’s something I didn’t know — individuals will be able to grow up to four plants for their own use, but they can’t be taller than a metre. How such a law would be enforced at the local level is a good question.

“I think your plate is going to be so full with dispensaries and tasting rooms and cultivation that personal cultivation is not going to be an issue,” McCabe said.

As proposed in the bill, the feds would be able to enter into agreements with local governments on prosecution and enforcement, including the sharing of proceeds from fines
and fees.

In short, there are both tremendous revenue opportunities (McCabe guestimated with “pure speculation” that the City of Kamloops might be able to realize around $3.6 million in marijuana licensing and taxation) and major costs and challenges.

And there are many “nuts and bolts” yet to be worked out around licensing, monitoring, oversight, safety and other questions, but the bottom line from McCabe and Cumming was that local governments need to get out in front of  the situation.