City to slash licence fees for cannabis retailers by 90 per cent

Setting up a pot shop in Edmonton will be a lot cheaper come January when annual business licence fees are slashed by 90 per cent.

The high $2,500 price tag will be cut to $255, and even less for renewal, when the city's revised business licence bylaw comes into effect Jan. 17. Fees for processing plans will also be dropped to $540 after council approved the bylaw changes Monday.

Downtown Coun. Scott Mckeen, who also serves as chairman of the Edmonton Cannabis Coalition, first brought the cost discrepancy issue forward in an effort to address the thriving black market. Soaring costs to set up business meant shops had to charge a significant amount for their products, which Mckeen said he now hopes can be reduced.

“If we're going to have legal cannabis sales and consumption, one of the goals should be to reduce and eventually eliminate the black market,” Mckeen said in an interview with Postmedia Wednesday. “If we have legal cannabis costing much more than black market cannabis, then we've got a problem.”

Since legalization in October 2018, costs to set up cannabis retail stores have been more expensive than other industries as the city provided extensive support to navigate the permitting process. But with the process mellowing out, the drastic changes will bring the cannabis industry in line with liquor stores.

“Normalizing fees for cannabis retail stores demonstrates a continued commitment from the City of Edmonton in supporting local businesses,” deputy city manager Stephanie Mccabe said in a report to council. “This industry no longer requires dedicated services and the application process for both development permits and business licensing is part of regular permitting and licensing services.”

On top of the changes to licence fees, development permit charges will also be cut by about 80 per cent. Up to 500 square metres of area will now cost $1,080, down from the previous price of $5,600, and changing the use of an existing building will now cost less than $528.

The significant reduction should give legal retailers a fighting chance against black market vendors, Mckeen said, noting the savings can be returned to customers through reduced prices.

“It's pretty clear that we'd hamstrung the retail industry and I see that as a result of continuing skepticism, if not outright disdain, for the drug,” Mckeen said. “The black market is killing the legal market because of pricing. Why are we undermining the legal market by charging these sky-high fees?”

The projected $165,000 annual decrease in business licence revenues is expected to require a small increase to the tax levy starting in 2022, which will be presented to council during the fall budget adjustment. It is part of a larger $1.4-million revenue reduction stemming from the business licence overhaul.

Since 2018, there have been 151 cannabis retail licences and 244 development permits issued in Edmonton.