Nelson City Council in BC has moved to decrease business license fees for recreational cannabis retail by over 90%.
Request to Reduce Fees
In 2022, the City of Nelson received a request from cannabis retailers to reduce their business license fees. The current fee for a recreational cannabis retail license is $2,500 per year in Nelson. City Staff proposed that the fee be amended to match retail wine and beer, meaning a reduction from $2,500 to $210.
City Staff says Nelson’s cannabis retail fees were found to be significantly higher than other neighbouring municipalities. For example, the fee in Castlegar is $200 for cannabis and liquor retail sales. However, the fee in Trail is based on square footage and can range from $900 to $2,950 for a cannabis retail store.
In his report to council, City Director of Development Services and Climate Leadership, Sebastian Arcand said, “The high cannabis retail business licence fee reflects that when they were first created in the wake of legalization, there was some speculation that the City resources these businesses might require would be higher than of a typical business. At this time, those City departments involved with business licensing (issuance, inspection and enforcement) have determined that cannabis retail does not require additional resources. Staff also consulted with neighbouring municipalities to compare fees for cannabis retail. The review concluded that the fees in Nelson were significantly higher. Accordingly, at this time, staff are of the opinion that it would be fair, as an interim measure in advance of a broader business licence fee review, to reduce the fees for cannabis retail to match the fees for liquor retail.”
It should be noted the city only has four cannabis retailers at this time. Should this number remain the same in 2024, the City would see a reduction of $9,160 in business licensing revenues.
Review All Business Licensing
The first three bylaw amendment readings were passed by City Council in November. A question from City Councillor Kate Tait heard Mayor Janice Morrison express the desire to look at all business licensing moving forwards: “I have asked staff to try and fit it into the 2024 work plan, that we would have a complete review of all business licences for the City of Nelson… There just was no room on the work plan. Hopefully there will be going forward, and maybe we’ll have discussions even in budgeting about whether or not we actually use a summer student or we look at some other options of coming in to do any kind of background research that may be needed as we look at a complete review of our business licencing process.”
However, in Arcand’s report, he says, “It has been determined that a complete review of the Bylaw would be a significant undertaking and should be adequately resourced and included in departmental workplans. Staff will be determining when and how the review should best take place in the future.”
Other Cities Drop Fees
Other cities have moved in the same direction much earlier than Nelson. In 2021, the City of Vancouver unanimously passed a motion to rethink the exorbitant fee—at the time retailers were required to pay $34,000 every year just to keep their licenses. The fee was dropped to $13,500 in 2022 and further reduced in 2023 to $5,000.
In 2022, the City of Edmonton reduced the fees for a cannabis business license from $2,500 to $255 for the initial license.
The city of Kelowna in BC is also lowering annual fees for cannabis retailers from $9,500 to $650.
By dropping the fees, municipalities aim to make the landscape more fair and equitable for cannabis retailers, making it easier to bolster the legal market, and providing support to local businesses.