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The City of Saskatoon’s Planning, Development and Community Services Committee has unanimously recommended that cannabis retailer license fees be reduced from the current $20,000 to $4,500 when the SLGA begins accepting new applications for stores in September.
Subsequent business license renewals are expected to remain at $85 annually. To date, $120,000 in revenue from business licensing fees has been received.
Before legalization, in early June, 2018, the provincial government announced a list of successful potential business owners who would be permitted to open stores. Later the same month, the City of Saskatoon adopted the cannabis business license bylaw as a way of recovering costs associated with store openings, including administering, regulating and enforcing the bylaw.
In late October, 2019, the province announced the Saskatchewan Liquor and Gaming Authority (SLGA) wouldn’t limit the number of cannabis stores any longer, and would start accepting applications for new retail outlets in September, 2020.
“This provincial change has implications for the business license fee,” said City Licensing and Permitting Manager Mark Wilson, at Monday’s meeting. “There will no longer be a fixed number of businesses contributing to the cost recovery of operating the program.”
According to a report from city administration, there could be as many as 20 cannabis related stores and one production facility in Saskatoon by 2023, up from the current six.
However, that’s not sitting well with some owners of the stores operating in Saskatoon right now, including the Saskatoon Licensed Cannabis Retailers Working Group, made up of four stores, including The Pot Shack.
Owner Geoff Conn told the committee waiving a cap on the number of stores in the city would be a mistake.
“When cannabis first came onto the market, everyone thought it was a golden egg. But really, it’s not. So, you have a city that has 40 liquor stores and probably around 7,000 customers for each liquor store. Where, in the cannabis industry you’ve got right now currently six stores in Saskatoon and maybe about 3,000 or 4,000 customers per store. So, if you’re adding another another 14, you’re going to dilute the market and then it becomes a big fight.”
He said the group is asking the city to look at what a reasonable number of stores might be, and to have a mechanism in place to prevent an oversaturated market.
City administration is not recommending a municipal cap on the number of stores allowed to operate in Saskatoon, or the separation distance between cannabis stores increased to 1,000 metres, from the current 160.
The report and presentations were submitted as information and must still be debated and approved by city council before any changes are made.
If city council votes to accept the recommendations from the committee at a later date, the city solicitor will be directed to amend the existing cannabis business license bylaw to include the new fee.