Alberta and Ontario brace for the age of legal pot

Theglobeandmail.com
August 22, 2018
Christina Pellegrini

Calgary and Toronto couldn’t be more different when it comes to how ready they are for recreational cannabis to become legal on Oct. 17.

In Calgary, city officials have approved more than 100 sites for cannabis shops. The Ontario provincial government’s recent U-turn on private marijuana sales has left municipal planners in Toronto in the dark and scrambling to adapt to the new regime that is not yet set in stone.

Last week, Ontario’s new Progressive Conservative government unveiled its plans to allow the private sector to own retail stores and said shops would open by April. But the announcement was light on details, particularly about the role municipalities will play in deciding where stores can be located.

“We’re not really clear on what [it’s] going to look like,” Tracey Cook, the City of Toronto’s executive director of municipal licensing standards, said on Tuesday at an event hosted by The Globe and Mail in Toronto.

"Even though the province indicated it’s going to go with a private model, there are a variety of private models that would then dictate a different municipal response. The province may determine that only those who are a licensed pharmacy can sell – that’s a private retail model.”

Still, entrepreneurs are scouring the province for the perfect store location and signing leases, even before they know whether those spots will pass muster or before they know if a city will allow cannabis stores at all.

The race for real estate for a future cannabis store has been hot in Alberta for the past year, with heavy interest forcing firms to secure leases while facing rising costs. Rents for pot shops have as much as doubled at some sites in Alberta – to roughly $65 a square foot annually – compared with the rate for a liquor store.

Calgary for its part, has been thinking about its approach to recreational cannabis since the spring of 2017.

“I don’t envy my Ontario counterparts, who now have to respond to the private market in a matter of eight months," said Matt Zabloski, Calgary’s municipal project lead for cannabis legalization.

Over the past several weeks, Calgary has approved 108 licence applications and rejected 108 others, Mr. Zabloski said. Around 40 more are still being processed. The city is updating a public map on its website that shows who’s getting a green light and who isn’t.

The process isn’t done yet, as these hopeful store owners also have to get vetted and licensed by the Alberta Gaming, Liquor and Cannabis Commission and can be rejected. The AGLC hasn’t approved any interim licences yet and doesn’t know when it expects to issue its first, Heather Holmen, an AGLC spokeswoman, said in an e-mail.

While Alberta is further ahead in its planning, there are still some unknowns.

The AGLC won’t be sharing a list of the applicants that didn’t make the cut with Alberta municipalities, Ms. Holmen has said. This raises questions about what will happen to their permits and their planned retail site, especially in cities such as Calgary that restrict how close cannabis stores can be to one another. Calgary requires pot shops to be 300 metres apart in an area where cannabis retailing is going to be permitted.

In Ontario, municipal elections on Oct. 22 will make the province’s April timeline even more crunched.

Provincial officials confirmed on Wednesday that Ontario’s municipal leaders won’t know until after the fall elections how much time they have to decide whether to prevent cannabis shops from opening in their communities. Places that opt out of Ontario’s new system will be allowed to reverse the decision and permit the shops to open in the future, according to a report from The Canadian Press.

Cities in Ontario may take a page from some in British Columbia. Many B.C. municipalities were advised by legal counsel to prohibit cannabis retailing as a temporary measure to prevent shops from opening up before the rules are set, Tofino Mayor Josie Osborne said. That’s what her town has done. The surfing district is looking to allow a few legal stores in the future, but is in no rush to have them ready for Oct. 17. Ontario municipalities could do the same to be ready for the provincial government’s April deadline and opt back in later once city councils and staff have more time to study the issue.

Beyond municipalities, growers also face uncertainty around how much the Canadian government is going to charge them each year to recoup the costs of regulating the cannabis industry. The proposed Health Canada levy for larger cultivators is 2.3 per cent of their revenue.

The executive director of the industry’s lobby group told The Globe on Tuesday it is urging Ottawa to delay collecting the fee from producers early on because their sales will be hampered by Ontario’s move to delay in-store retailing until next year. Health Canada didn’t immediately provide comment late Wednesday.