City of Delta COUNCIL REPORT F.08 · Regular Meeting
To: Mayor and Council
From: Corporate Services Department
Date: July 19,2018
Cannabis Regulations Update
The following report has been reviewed and endorsed by the Acting City Manager.
• RECOMMENDATION:
THAT this report be received for information.
• PURPOSE:
The purpose of this report is to provide an update to Council regarding the impending legalization of cannabis.
• BACKGROUND:
Staff most recently provided an update to Council regarding the impending legalization of cannabis at the May 14, 2018 Regular Meeting: Since then, Bill C-45 (the Cannabis Act) received Royal Assent on June 21, 2018 and non-medical cannabis will become legal on October 17, 2018. In addition, more details have emerged regarding the BC government's regulatory regime for non-medical cannabis, including regulations related to the Agricultural Land Reserve and legislation regarding the licensing of non-medical cannabis retail stores.
• DISCUSSION:
Agricultural Land Reserve On July 13, 2018, the provincial government issued an information bulletin (Attachment 'A') announcing changes that impact local government control over cannabis production in the Agricultural Land Reserve. Local governments now have the ability to prohibit cannabis production that impacts the productive capacity of agricultural land. However, cannabis production cannot be prohibited if grown lawfully:
• in an open field; • in a structure that has a soil base; • in a pre-existing structure, or a structure that was under construction, as of July 13,2018;or Page 2 of 4 Cannabis Regulations Update July 19, 2018
• in an existing licensed production facility.
Staff are assessing Delta Zoning Bylaw No. 7600, 2017 to determine its position related to this new regulatory change by the provincial government and will bring an amendment forward for Council consideration if required.
Status of Senior Government Legislation In addition to the federal Cannabis Act, which received Royal Assent on June 21, 2018 and takes effect on October 17, 2018, multiple pieces of provincial legislation have recently been put in place:
• Cannabis Control and Licensing Act- a portion of this Act is now in force, including the provisions that govern applications for the issuance of licenses for the retail sale of cannabis. • Cannabis Distribution Act - this Act is now in force and it authorizes the provincial government to operate the provincial cannabis distribution system and conduct retail and online cannabis sales. • Cannabis Control and Licensing Interim Regulation - this Regulation establishes two classes of licenses under the Cannabis Control and Licensing Act: retail store licences and marketing licences. A marketing licence will allow marketers to promote the products of federally licensed cannabis producers to licensed cannabis retail stores. To be granted by the provincial government, a retail store licence must be supported by the host local government, whereas there is no such requirement for a marketing licence. • Cannabis Transitional Regulation - this Regulation allows for the provincial government to sell cannabis only once the Cannabis Act comes into force. • Cannabis Distribution Regulation - this Regulation addresses the handling of cannabis records and information by the provincial government.
Non-Medical Cannabis Retail Stores Delta Zoning Bylaw No. 7600, 2017 prohibits cannabis dispensaries in all zones.
Private Cannabis Retail Stores The Liquor and Cannabis Regulation Branch (LCRB), formerly the Liquor Control and Licensing Branch, has established regulatory requirements for private cannabis retail store licenses. Licenses are only issued by the provincial government if certain conditions are met, including:
• that the cannabis retail store is a standalone business; • that the cannabis retail store licensee must not also be a federally licensed cannabis producer; • that a maximum of eight cannabis retail store licences may be issued to a group of related persons; • that the cannabis retail store pay an initial application fee to the province of $7,500 with an additional $1,500 payable as an annual licence fee; and Page 3 of 4 Cannabis Regulations Update July 19, 2018
• that the host local government provides a positive recommendation for the cannabis retail store.
Applicants for a non-medical cannabis retail store licence must submit a licence application to the LCRB. The LCRB will then notify the host local government of the application, at which time the local government can choose to:
• make no recommendation regarding the cannabis retail store licence application (this would end the application process because the LCRB cannot issue a licence unless the local government provides a positive recommendation); or • make comments and recommendations regarding the cannabis retail store licence application.
If the local government chooses to make comments and recommendations, then it must gather the views of residents. If the local government recommends denying the application then the LCRB cannot issue the licence. If the local government provides a positive recommendation then the LCRB retains discretion whether to issue the licence, but it must consider the local government's recommendation. Further details about requirements for gathering residents' views and what a local government's recommendation must include are included in Attachment 'B'.
BC Cannabis Stores In addition to cannabis being sold through private cannabis retail stores, the provincial government will be selling cannabis through its own stores, which will be branded 'BC Cannabis Stores'. While the provincial government's licensing regime for private cannabis retail stores requires that each store be supported by the host local government, the government's own BC Cannabis Stores do not require the same approval from the host local government. Despite this gap in local government oversight in the Cannabis Control and Licensing Act, the provincial government has stated that a BC Cannabis Store will not be opened if it is not supported by the local government.
BC Cannabis Stores will follow a similar operating model to BC Liquor Stores, except that no minors will be permitted in BC Cannabis Stores, cannabis consumption or samples of any kind will be prohibited in BC Cannabis Stores, and cannabis products will be kept behind the checkout in an employee-only area of the store. For more information on BC Cannabis Stores see Attachment 'C'.
UBCM meeting requests Delta has been lobbying the federal and provincial governments on a variety of cannabis-related issues since the announcement that cannabis would be legalized in Canada. These efforts are ongoing and include recent requests for meetings with appropriate provincial ministers at the 2018 UBCM Convention.
Delta has requested a meeting with the Minister of Public Safety and Solicitor General to discuss the need for cannabis roadside detection devices to detect and quantify cannabis impairment. In addition, Delta has requested a meeting with the Minister of Agriculture to discuss Delta's concerns regarding the impacts of cannabis production on farmland and displacement of traditional food crops. Page 4 of 4 Cannabis Regulations Update July 19, 2018
Staff Working Group Internally, staff remain highly engaged related to the impending legalization of cannabis. In addition to the efforts described in this report, a working group of key staff has been formed to address emerging cannabis-related issues related to bylaws, zoning, enforcement, and public safety in the limited time available before October 17, 2018.
This group meets as needed, including most recently on July 19, 2018, to ensure there are no internal silos on these issues. One item that arose from the most recent meeting was the decision to require cannabis producers in Delta to obtain a business licence, consistent with Delta Business Licence Bylaw No. 7670, 2017 and Delta's practices related to greenhouses growing other products.
Delta remains active, from both a staff perspective and through lobbying senior levels of government, on outstanding issues related to the impending legalization of cannabis. These include the forthcoming issue of edibles, home cultivation of cannabis (the Cannabis Act allows for the cultivation of up to four cannabis plants per residence), driver impairment, and cannabis production on farmland.
Implications: Financial Implications - There are no financial implications to Delta.
• CONCLUSION:
Staff continue to address emerging issues related to the impending legalization of cannabis. The provincial government has recently adopted regulatory changes related to local governments' authority over cannabis production in the Agricultural Land Reserve and legislation related to licensing non-medical cannabis retail stores. Staff are working to ensure that Delta is well-situated to respond to these regulatory and legislative changes made by the provincial government. ~:;- Director of Corporate Services
Department submission prepared by: Michael Gomm, MPP, Senior Corporate Policy Analyst
Department Name Signature Community Planning & l Marcy Sangret Develo ment Police Neil Dubord
• ATTACHMENTS: A. ALR Information Bulletin B. Local Governments' Role in Licensing Non-Medical Cannabis Retail Stores C. BC Cannabis Stores Overview 7/19/2018 Protecting land in the ALR guides cannabis production regulation I Be Gov News Attachment 'A' Page 1 of 1 British Columbia News Protecting land in the AlR guides cannabis production regulation https://news.gov.bc.ca/17605 Friday, July 13, 20189:39 AM
Victoria - Local and First Nations governments now are able to prohibit cannabis production in the Agricultural Land Reserve (ALR) within their communities, unless it is grown in ways that preserve the productive capacity of agricultural land.
This regulatory change, effective immediately, gives authority to local and Indigenous governments to prohibit cement-based, industrial-style, cannabis-production bunkers on ALR land in their communities, while clarifying that cannabis production in the ALR cannot be prohibited if grown lawfully:
• in an open field; • in a structure that has a soil base; • in a structure that was either fully constructed or under construction, with required permits in place, prior to July 13, 2018; or • in an eXisting licensed operation.
The regulation allows local governments and First Nations to prohibit the altering of existing structures to increase the size or material used as the base of the structure, and applies, or will apply, to licensed medical and non-medical cannabis facilities in the ALR.
The new framework allows local and First Nations governments to make decisions regarding cannabis production that align with local planning and priorities in their communities.
The regulatory change pertains only to land in the ALR. Local and First Nations governments can regulate or prohibit cannabis production on lands outside of the ALR.
Quick Facts:
• Once the federal Cannabis Act comes into force on Oct. 17,2018, the federal government has announced it will allow cannabis producers to grow cannabis in open fields, greenhouses and industrial bunkers. • There is no biological difference between a cannabis plant grown for medical or for non-medical purposes.
Media Contacts
Robert Boelens Communications Ministry of Agriculture 250356-1674
https:llnews.gov.bc.ca/releases/2018AGRI0050-001390 111 Attachment '8' Page 1 of 4
BRITISH COLUMBIA
Loca l Governments' Ro le in Licensing Non-M edica l Can nabis Retail Stores
If you have any questions about this document, please contact the Liquor and Cannabis Regulation Branch toll-free at 1-866 209-2111, or email [email protected] . NOTE : This document will be updated from time to time as additional information surrounding the regulatory framework for cannabis retail sales becomes available.
Branch name change
The Liquor Control and Licensing Branch has been renamed to the Liquor and Cannabis Regulation Branch (LCRB) to represent its new additional responsibility of licensing and monitoring the retail sale of non medical cannabis in British Columbia .
Non-medical cannabis retail licence
The province will be issuing licences for non-medical cannabis retail stores. A cannabis retail store must be a standalone business. This licence requires input and a positive recommendation from a local government in whose area the proposed store is located.
The province recognizes the importance of ensuring carefully regulated access to non-medical cannabis in all areas of the province, including rural areas.
As a first step, the province will open opportunities to apply for regular retail licences. Once the regional distribution of retail non-medical cannabis stores is known, the province will consider issuing licences to service rural or remote areas that are not sufficiently served by existing retail cannabis stores.
Th e role of local governments in the cannabis retail store licensing process
Applicants for a non-medical cannabis retail store licence must submit a licence application to the LCRB . When an application is received, the LCRB will notify the local government of the area where the proposed store will be located.
Upon receipt of notice, local governments can: • choose not to make any recommendation in respect of the application for a cannabis retail store licence (Note: this would end a licence application in progress because the LCRB cannot issue a licence unless the local government gives the LCRB a positive recommendation that the licence be issue) • choose to make comments and recommendations in respect of an application for a cannabis retail store licence. Note that: o if the local government chooses to make a comments and recommendation on the licensee's application to the LCRB, it must gather the views of residents Attachment '8' Page 2 of 4
o if it makes a recommendation to deny the application then the LCRB may not issue the licence o if it makes a recommendation in favour of the application, then the LCRB has discretion whether or not to issue the licence, but must consider the local government's recommendation.
Local Governments (municipalities, regional districts or Islands Trust local trust committees) have some or all of the following regulatory powers in respect of cannabis retail store licences: • Impose restrictions in its zoning bylaws regarding the location of cannabis retail stores
41 Regulation of business (municipalities only): by terms and conditions in its business licensing bylaw, a municipality may limit the hours that cannabis retail stores can operate or impose other conditions such specifications regarding signage • Charge the applicant fees if choosing to assess an application.
The above process applies to all relocations of existing cannabis retail stores.
Gathering residents' views
If the local government decides to consider the notice of application and to provide comments and recommendations as to the location of the proposed retail store, it must gather the views of residents of the area if the location of the proposed store may affect nearby residents. It may gather resident's views by using one or more of the following methods: • Receiving written comment in response to a public notice of the application • Conducting a public hearing in respect of the application • Holding a referendum, or • Using another method the local government considers appropriate.
It is up to the local government to determine the area, relative to the licensee's application, where resident's views must be gathered.
Please note: Gathering the views of residents of the area/providing a recommendation to the LCRB must be unique to each provincial licence application. In other words, past recommendations cannot be used in a new licensing process. Each individual application must be considered separately by the local government.
What must the local government's recommendation include?
The recommendations and comments the local government provides to the LCRB must: • be in writing (this mayor may not be in the form of a resolution) • show that the local government has considered the location of the proposed store • include the views of the local government on the general impact on the community if the application is approved • include the views of residents if the local government has gathered residents' views, and a description of how they were gathered • include the local government's recommendation as to whether the application should be approved or rejected and provide the reasons upon which the recommendation is based.
The local government should also provide any supporting documents referenced in their comments.
2 Attachment '8' Page 3 of 4
What if the local government does not want to provide a recommendation?
If a local government does not want to accept the notice of application and provide a recommendation for the proposed retail location, they should notify the LCRB. A licence for a cannabis retail store will not. be issued without a positive recommendation from a local government. If a response is not received, LCLB will not consider the application any further.
What if the recommendation does not meet the regulatory requirements?
If the recommendation does not meet the regulatory requirements, the LCRB will ask the local government to provide new or amended comments that address outstanding issues.
How long does the local government have to provide comments?
Unlike in the process for liquor licensing, local governments are not required to provide a recommendation on a cannabis retail store application within a specific time period. Please note that delays in the application process can have a significant impact on the applicant. If the applicant is the reason for the delay, please notify the LCRB. If the applicant is not trying to move an application forward, the application can be cancelled.
Can the local government recommend approval subject to certain conditions?
In some circumstances, the local government can recommend that the LCRB approve the application as long as certain restrictions (e.g. hours of operation) are placed on the licence. In these situations, the recommendation should clearly explain the rationale for placing restrictions.
If the local government intends to request that the LCRB impose terms and conditions on a licence, prior to sending such a recommendation the local government should consult with the LCRB so that the LCRB can determine whether it has the authority to impose the requested terms and conditions before finalizing their conditional recommendation.
The local government may also have the ability to impose other operating rules on the proposed store through the terms and conditions of the applicant's business licence, zoning or bylaw. The local government is responsible for enforcing these rules.
Floor Plans
Applicants must submit a floor plan with their licence application for approval so the LCRB can identify store features such as sales, storage and delivery areas. Unlike for some kinds of liquor licence applications, local governments are not required to provide occupant load stamps or approve the applicant's floor plans as part of the provincial licensing process for cannabis retail stores.
3 Attachment '8' Page 4 of 4
A municipal councilor regional district board can delegate authority to their staff to provide comments and a recommendation to the LCRB
A municipal councilor regional district board may delegate its powers and duties to provide comments and a recommendation to the LCRB regarding a cannabis retail store licence application. If a councilor board has delegated this authority, a cannabis retail store applicant may ask for comments and recommendations made by delegated staff to be reconsidered by the local government.
Council as defined in the Vancouver Charter:
A.Council, as defined in the Vancouver Charter, choosing to delegate to its staff must establish procedures for a reconsideration of comments and recommendations made by delegated staff, including how a cannabis retail store applicant may apply for reconsideration. In undertaking a reconsideration, the Council will have the same authority as it delegated to staff.
Right of reconsideration:
Delegated local government staff must advise the cannabis retail store licence applicant that the applicant has the right of reconsideration of the staff's recommendation by the councilor board .
How local governments inform the lCRB of delegation:
A local government that has delegated authority to staff should send a copy of the delegation to the LCRB at [email protected].
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'~~ ....-.. ~~-~- ~~~ --:- - -- " , " -' Overview RESPONSIBLE ALIGN ED SAFE & SECURE KNOWLEDGEABLE PROFESSIONAL Every decision we make We are experienced at Unprecedented safety and The in-store experience We have a proven track supports the social meeting municipal security measures are is designed around record of successful reta il responsibility requirements with incorporated into our store responsible messaging, operations, end-to-end, commitments we make transparent engagement design, to ensure a education and awareness, meeting the highest t o our communities. every step of comfortable and modern delivered by trained and standards of professional t he way. experience for customers. certified employees. public service and accountability. Attachment 'e' Page 4 of 16 .... , To make high-quality cannabis products and education available to all customers - from the discerning to the new - through responsible channels that provide expert and friendly service. Proven track record of public service, accountability will carryover to cannabis • Our strict /flO Under 3D" policy on the liquor side of our business is a strong contributing factor to our successful compliance record . On cannabis, our planned two IO-check procedure will keep regulated products out of the hands of minors. • Effective responsible consumption awareness programs in stores and in our communities like Dry Grad and Get Home Safe protect young people and their community. • Our at-the-till charitable collections and employee contributions raise nearly $1 million for local communities annually. • We thrive as an environmental leader in sustainable retailing by practicing energy and fuel efficiency, container recycling, plastic bag reduction and responsible waste management. Attachment 'C' Municipality zoning bylaw Land use permittrri~ e 7 of 16 compliance and approval and approval Council proposal and hearing, Safe proximity from schools, public notices, inspection process playgrounds, parks,community centres, daycares and other cannabis retailers Responsible community engagement. Our approach to an open and transparent civi.c process has led to operating one of Be's largest retail networks. Commercial leasing approval Business licensing approval Tenant lease agreement, insurance, Acceptable operating hours, waste tenant building improvements and recycling management, occupancy permits, security '. '. .. .' ccrncept .Flo,drpla~: ~·-7- -•• "~"...... ~~~ .... ~~ ...... ~~~ .. ~~ ...... (p- ...... """ ...... ~(~ ...... ~.p- ...... Security Locked display cabinets gate I Man-ager's -_.. --;y-' ' ~- - ' of{ic e ~ , - rl'e ' ''I" ' A"O~' ---.JI..---__ ,. - -0 - I ... _I __ , tll - '. .. , Vl Vl Secure displays, rl' V> ~ - Secure ~ , Qj " 1 a tllVl / _ C storage OQ.. -- , ::rc ::r and handling (3 =t --- • a Vi' 3 (1) ,,-_ ..' _~ ~rmd ( x , Staff room .. , p -~ - Storefronts. .. '---. - __QU[ _stores. are_bright, clean, welconl'ing· . · arictprofe.ssional-~ creating a- safe a"d-··· - -" . favourable. alternative~~o1lurchasi . ng .. ~ _ -,.."._._ At.,______L __ ...... - ~ . _ non -rned icaLc_ao_n~a bis _trom theJ II icit • Superior intruder and fire monitoring systems maximize response time and minimize losses. • Interior and exterior camera surveillance used to deter theft. • Locking valuable accessories in tempered glass display cases prevents shoplifting and creates an added barrier for burglars. • A secure storage room keeps regulated product out of sight from minors and out of reach from shoplifters. • Durable and reliable commercial-grade doors and locks secure our store premises. • Smash-resistant windows obstruct vandalism and break-ins. • Attractive and visible on-premise signage of security measures deter would-be thieves and criminals. Attachment 'e' Page 13 of 16 One advantage to operating a retail network as extensive as ours is the ability to offer a diverse selection of product at varying price points, which will significantly reduce the impact of the illicit market. We will purchase lab-tested product only from licensed producers to ensure a dependable track record of consistency, both in quality and in the timely delivery of reliable products. TR H Truth: We are committed to working with municipa l zoning bylaws and licensing requirements to ensure fairness for all in t he communities we do business in. Truth: We stand by our commitment of responsible waste management by safe ly destroying cannabis products off-premise. Truth: Minors are not permitted to enter cannabis stores, even if accompanied by an adu lt. Ou r two ID-check POlicy at store entranceways ensures we ~omply with t he law. Truth: Clean, bright white wa ll s, natural textures and timeless accen ~create a ....' I professional environment and comfortable shopping experience for our customers. Truth: The Cannabis Control and Lice prohibits cannabis consumption of cannabis stores, and providinb ~ be permitted. • We are committed to working Wtttlshment 'C' municipal regulations around"h b1jr~bo/ 16 operation . • j BC Cannabis Stores will be full-se rvice retail establishments, where employees fulfill customer orders from behind-the counter. • Unlike at BC Liquor Stores where empties can be returned, BC Cannabis Stores will not be accepting cannabis product Store packaging for recycling. Defective product that is returned to BC Cannabis Stores will be transported Operations · securely to a secure, off-premise location " to be safely destroyed. • BC Cannabis Stores will not incinerate or dispose of cannabis products on-premise. • BC Cannabis Stores will not carry cannapis-branded promotional wares such as apparel, stationary and novelty giftware. 1. . , • I I .~ • GJ .L2 I • t ra I - -I-' ) I ~ I ~ .;, - 0 u J ,. u· !I« I I J I