Will cornfields and greenhouses that now grow tomatoes and cucumbers give way to marijuana crops on farmland in the Agricultural Land Reserve (ALR) in Delta?
This is among questions the B.C. government needs to answer by July 2018, when new federal legislation makes recreational marijuana use legal.
In an attempt to get some kind of public consensus on key regulatory issues, like taxation, distribution and retailing, the B.C. government is asking the public for input.
B.C. Solicitor General Mike Farnworth announced an online consultation campaign at the recent Union of BC Municipalities annual conference.
“Collaboration is key to getting it right here in British Columbia,” Farnworth said.
Dan Sutton, founder and managing director for Tantalus Labs, a licensed medical marijuana grower, welcomes the government’s plans to consult the public. He thinks B.C. is uniquely positioned to turn cannabis into a major new industry.
“This will be one of the largest industries in B.C. – certainly one of the top five industries – if it’s executed effectively,” he said.
Growers like Tantalus, which is licensed to supply the medical marijuana market, are hoping they will also be able to capture the recreational marijuana space.
Farnworth added that he hopes to see provinces set “uniform” levels of taxation on marijuana sales so that provinces are not competing against each other.
A big question, however, will be whether marijuana growers should be allowed to use farmland in the ALR or be relegated to industrial zones and warehouses.
Lower taxes in ALR
“I really don’t want to be the pot capital of Canada,” Delta Mayor Lois Jackson said.
She said 35 companies have already made inquiries about growing marijuana on Delta ALR land. That’s not surprising, given that ALR land is taxed at a much lower rate than industrial land.
“I think we’re going to have to address the question: Are we going to allow, or should we allow, all of our agricultural lands to be used for growing of marijuana – and our greenhouses – or are we going to grow our own vegetables?” Jackson said.
Sukhbir Manhas, a lawyer with Young Anderson, said the provincial government has already addressed that question with respect to medical marijuana: municipalities cannot prevent medical marijuana growers from setting up on ALR land.
It’s not clear whether municipalities like Delta would have the authority to prohibit ALR land from being used to grow marijuana for recreational use.
“Certainly, if we want to have some teeth vis-a-vis ALR land, we’re going to have to see that regulation amended,” Manhas said.
Sutton said it would make no sense to relegate marijuana growing to warehouses because the energy inputs for growing indoors are enormous.
“Cannabis is agriculture,” Sutton said. “It makes zero agricultural, economic or environmental sense to cultivate any flowering plant in a warehouse environment. It absolutely belongs in greenhouses on the ALR.”
While the federal government is responsible for regulating production, provincial governments are responsible for things like sales taxes, distribution and retail.
Municipal governments, meanwhile, are responsible for policing, zoning and business permitting. Trying to regulate a grey market for medical marijuana dispensaries has already proven to be a big headache for the City of Vancouver, where more than 120 illegal pot shops have cropped up in just a few years, said Coun. Kerry Jang.
Rather than use municipal police to shut them down, Vancouver has used its zoning and business bylaws to try to at least regulate where and how they operate. Dispensaries pay $30,000 for business licences and are restricted from being close to schools.
Jang said about a dozen such businesses have complied with the new rules and gone through the process of becoming properly licensed.
Presumably, most, if not all, of the existing pot shops would have to shut down if the provincial government decides to go with an Ontario model of government-controlled distribution and retail.
B.C. has long been known for its cannabis culture. Growers have developed skills that, although honed illegally, are transferable to a legal industry.
Jonathan Page, president and chief scientific officer for Anandia Labs, which provides clinical testing of medical marijuana, hopes to see the province try to capitalize on that knowledge base.
“The province needs to have a role in figuring out how that whole illicit industry is transitioned,” Page said. “B.C. has been a big producer of cannabis, and there’s a way to do that under a legal system as well.”