BC Local Governments & Medical Marijuana – Taxation & Location Implications

prscripOn April 1 2014, new Canadian rules came into effect promoting a private-sector commercial marijuana production industry over what had been in place previously. There’s been ongoing confusion over what that means for licensed users for personal production as well as some dilemmas for local governments.

This post focuses on local government implications and recent developments.

In general, the issues relate to location and taxation. Some recent developments have clarified both of those issues – in a truly Canadian-style decision-making tradition.

Today’s council meeting information package has two items that speak to this. See items 16 and 19 here.

Basically, there were considerations by some municipalities to solely restrict grow operations to industrial areas. A number of reasons were given including safety, ease of monitoring, less demand on extending service infrastructure and taxation. There were also concerns in municipalities where urban and rural areas were increasingly interfaced.

Recent provincial decisions have clarified things. Local governments can’t restrict  commercial grow-ops to industrial areas and that marijuana production is consistent with farm use on ALR properties.

The “on-the-other-hand”  kicker though is that “medical grow ops in the ALR will be excluded from farm classification for assessment and property tax purposes. The medical grow ops – which are intensive operations – will be taxed at the full industrial rate. They will not benefit from the greatly reduced farm tax rate

So there you have it. Commercial medical grow-ops can locate on ALR lands and can’t be restricted to industrial areas but they’ll have to pay industrial tax rates no matter where they locate.

Your growing thoughts?





Author: Tim Lavery

Aim High Salmon Arm It matters

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