$20K pot business licences approved by Saskatoon committee

A Saskatoon city council committee has unanimously agreed to recommend that cannabis retailers should be charged $20,000 for their business licences.

The planning, development and community services committee approved the recommendations after a brief debate Wednesday afternoon.

Administration proposed an initial business licensing fee of $20,000 for cannabis retail shops, with an annual $10,000 renewal fee.

The fees are significantly higher than those charged for a regular business licence, which has a first-time payment of $125 and an annual renewal cost of $85.

Community Services General Manager Randy Grauer explained the higher costs were to help the city recover money spent to regulate the new industry.

He estimated the city has spent $150,000 in the past year to prepare for cannabis legalization, and the costs are expected to increase once stores open.

Mayor Charlie Clark voted in favour of the recommended price tags to forward the debate to council on June 25.

However, he expressed concern on whether costs should be recovered through licences.

“It’s a significant departure from how we’ve dealt with costs and business licences from what we have in the past,” he said after the meeting.

“I want more information to be clear on what our costs are.”

He suggested a better avenue might be to advocate for clear revenue sharing with the province through excise taxes and PST on cannabis sales.

Asked about the perception of a municipal cash grab, Clark said the city’s coffers aren’t being padded.

He noted the city has had to spend money to conduct surveys, hold public meetings and put significant work into preparing regulations, while police will also need additional funding to deal with legal cannabis.

“The city is not making money on this process,” he said.

“If seven businesses generate $20,000 each, that’s $140,000. That won’t even touch the amount of expense that’s gone into sorting this out.”

Ward 1 councillor Darren Hill voiced support for the higher fees at the meeting, noting higher fees are already agreed to in Vancouver — where cannabis business licences will cost $30,000 each.

He also addressed questions as to why liquor retailers aren’t charged as much to cover city regulation costs, saying there are far more liquor businesses to spread the burden among them.

“We have seven cannabis stores to cover at least the minimum of one full-time senior person to do all the work on this,” he said.

“The comparison is apples to oranges.”

Hill added if the costs weren’t placed on the business licences, they would end up on property tax bills.

“By no means will I ever entertain a penny of citizens of Saskatoon property tax going towards all of the administration, the costs associated with these seven retail cannabis outlets,” he said.

“They are going to be extremely lucrative, for-profit ventures that should be funded by their business licence fee.”

The committee also recommended to separate pot shops by at least 160 metres from each other to prevent clusters in some areas.

“It would be a good thing if these stores were spread out throughout the city, so everybody doesn’t look to just one district or one area,” Clark said.

A recommendation to mandate air filtration systems in cannabis stores was approved as well.

The cannabis licensing issue will be debated at council on June 25.