Update: licence fee for cannabis retail operations reduced
The ship has been righted for cannabis retail operations in Nelson.
There will be a reduction in the business licence fee that cannabis retail operations pay to the City of Nelson, after a request from cannabis retailers made in 2022 to reduce licence fees for “retail: recreational cannabis” was approved and adopted.
The previous fee for a recreational cannabis retail store was $2,500 per year. However, a City staff report had recommended that it was “reasonable” to amend the cannabis retail business license fees to match “retail wine and beer” — dropping the fee from $2,500 to $210.
The previous fee that cannabis retail businesses paid was more than twice what the highest fee any other city business paid — chartered bank at $1,040 — and there was no rationale for the price point, said City director of Development Services and Climate Leadership, Sebastien Arcand.
“This will bring the business licence fee in line with other similar businesses,” he said in his report to council on Nov. 7.
It would be appropriate for the City to lower the cannabis retail business licence fee to match that for retail wine and beer, Arcand said in his report.
“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,” said Arcand.
City departments involved with business licensing — for the departments of issuance, inspection and enforcement — determined that cannabis retail did not require additional resources. In addition, neighbouring municipalities were also consulted to compare fees for cannabis retail.
The review concluded that the fees in Nelson were significantly higher.
Cannabis retailers are to be informed of the amendment now that it is adopted.
By the numbers
In 2023, the City issued four business licenses for cannabis retailers.
If this number remains the same in 2024, the City would see a reduction of $9,160 in business licensing revenues.
At the time of request, City staff considered reviewing the entire Business License Bylaw and associated business license fees to ensure that all fees are fair and reasonable.
A comprehensive review of the Business License Bylaw and associated fees will be required in the next few years, Arcand noted.
“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,” said Arcand.