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