Kelowna dropping retail cannabis business licence fee from $9,500 to $650

Cannabis biz fees to drop

Cannabis retailers in Kelowna have been paying some of the highest municipal business licence fees in the province, but that's about to change.

There are currently 18 licensed cannabis retail stores operating within the City of Kelowna, and each one has been paying an annual business licence fee of $9,500 since cannabis was first legalized in 2018. This has been in stark contrast to the $650 annual fee a liquor retail store pays in the city, while most types of businesses pay $160.

With his licence up for renewal later this month, Dan Lepine, owner of Cannabis Corner Kelowna, reached out to Castanet last week to express frustrations with having to pay the exorbitant fee once again.

But City of Kelowna Planning Director Ryan Smith says local cannabis retail owners have paid their last four-figure business licence fee.

“We're doing an update to the cannabis licence bylaw, which is going to happen in January or February, but we're holding off on formal renewals of the $10,000 cannabis licences – there's 18 – until after we change the bylaw next year so that they'll pay the same fee as a retail liquor store," Smith said.

“We're not going to penalize people because we didn't get to it, we're going to hold off and not let them renew their licences yet until we can charge them a lower fee.”

Many B.C. municipalities introduced very high cannabis business licence fees back in 2018 when the drug was first legalized, to help recover costs associated with developing the new cannabis retail regime.

“We were into it for hundreds of thousands of dollars in staff time,” Smith said.

“I think we were worried about more issues than actually occurred ... the stores in town that are operating have been doing a good job and we don't have the same concerns that we had at the beginning of the process. We don't need to have the same level of resource intensity put towards it.

“We originally were told by the provincial government that we were going to be reimbursed for our costs, but that never occurred.”

Most municipalities have already reduced their once high cannabis business licence fees. While Vancouver cannabis retailers were paying more than $30,000 for a business licence five years ago, a licence now costs $5,000.

Last year, Kamloops council slashed their fee from $5,000 to $196, while Vernon has brought its cannabis licensing fees in line with its liquor stores, ranging from $115 to $800 per year based on size. Just last month, Nelson cut its cannabis business licence fee from $2,500 to just $250.

Lepine also owns a Cannabis Corner in Fort St. John, where he pays $150 for his business licence.

“We've never had any issues, no break-ins, no nothing,” Lepine said. “So for us to be singled out like that by the City of Kelowna, it's ludicrous.”

Kelowna's fee reduction is a long-time coming. Smith told Castanet back in January 2022 that the city was looking to reduce their fees. At the time, he said the city was “pretty close” to recovering the $300,000 to $400,000 cost of implementing the new cannabis retail regime.

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