A city report heading to next week’s Urban Planning Committee recommends the permit and licensing fees for cannabis stores should cost applicants $8,100.
City staff have calculated what they think is a suitable charge for cannabis sales in Edmonton once marijuana is legal later this year. The $8,100 cost is split up into a $5,600 development permit fee and a $2,500 business licensing fee.
The report states the proposed fees are meant to recoup some of the costs associated with the sale and consumption of cannabis, such as bylaw enforcement.
READ MORE: Cost of cannabis: How will Edmonton pay for enforcement?
“The calculation for the recommended fees includes personnel, overhead, and other associated costs for preparing for the legalization of cannabis as it relates to the application, permitting and licensing process,” the report reads.
“It does not include other costs such as plan reviews and inspections by Fire Rescue Services, bylaw enforcement or policing.”
The report states that had they tried to get “full cost recovery” that would have been seen as not being business friendly and would have hindered “the development of a legitimate market.”
READ MORE: Sale of recreation marijuana in Canada delayed until August
Had the city done that, it would have cost nearly $150,000.
The report outlines five options for development permits and licensing fees, one of which sets the cost in alignment with similar categories in the city — around $500.
Ward 1 Councillor Andrew Knack said administration’s recommendation is different than what the city has done in the past in terms of fees, but he admits there is a need to be cautious when entering new territory with a brand new industry.
“The feedback we’ve been hearing from everyone that’s always made presentations to us, people who have gone through this in spots like Colorado and other locations say start off a little more conservative first because you can always loosen things and lower the fees later on,” he said.
“I think the last thing we want to do is have a new industry come in where we are incurring significantly new costs as a city and not able to recover that.”
Knack said he hasn’t heard much concern surrounding the proposed fees, and he believes there’s a general understanding that the startup costs are going to be higher than your average business license and development permit.
“I think the recommendation — and I’m very interested to hear additional feedback — but I think the recommendation upon first reading seems like a good place to be. It doesn’t go too far down the excessive range but it doesn’t just assume this is going to be business as usual,” he said, adding the costs will be reviewed on a yearly basis.
“We can make sure that if we find it is too high after the first year then absolutely, we should reduce it. But let’s make sure we have that data to help inform that decision versus the other way which is setting yourself too low, not recovering the appropriate costs and putting yourself in a really challenging situation afterwards to have to adjust the other direction.”
The Alberta Gaming and Liquor Commission (AGLC) started accepting applications for retail cannabis stores on March 6. As of April 20, the commission had received 452 applications for stores across Alberta.
READ MORE: 452 applications received so far for Alberta cannabis retail stores
There is no cap on the total number of retail licenses, but no one person can hold more than 15 per cent of retail cannabis licences in the province.
The approval process includes background checks, an interview and a financial analysis. Municipal approval is also required.
READ MORE: Alberta outlines rules for retail marijuana sales
The report will be debated at the city’s Urban Planning Committee on Tuesday. Due to the timeline, the city report said the proposed fees have not been subject to “broad public engagement.”
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