Cost of opening a cannabis store in Kelowna is about to double

KELOWNA – A proposed business licence fee of $9,465 will mean the City of Kelowna could get about $20,000 from any retail cannabis store that opens in the city.

It has already cost the 41 businesses that filed applications for retail cannabis stores $1,000 each just to apply. It will cost them another $9,495 if the application proceeds to rezoning.

City council will be asked Monday, Dec. 10 to approve the $9,465 business licence fee, which will be in addition to the application and rezoning charges. It’s almost double the $5,000 fee in Kamloops, Vernon and Penticton.

“That ($9,465) is based on an estimate of about a dozen of these applications making it through,” Greg Wise, the city’s Business Licence Manager told iNFOnews.ca. “We’ve already incurred over $100,000 in costs getting this up and running.”

City staff were directed by council to make the establishment of cannabis stores as revenue neutral as possible. In September, it was estimated that $116,000 had already been spent drafting regulations. Those costs are expected to be recovered through the high rezoning fees.

The business licence fees are to cover the costs of ongoing monitoring of the shops. Council, during its provisional budget discussions next week, will review a request for a new hire to do this work and oversee a proposed short-term rental policy as well.

Since no retail outlets will be open for a few months, the initial licence fee will be pro-rated until the end of 2019. After that, it will cost $8,000 a year for a cannabis retail business licence.

That compares to less than $1,000 Wise is proposing be charged to retail shops that sell cannabis accessories and is in the mid-range of what other cities are charging.

Vancouver for example, is at $30,000 and Nelson is at $20,000, while a number of other cities are all at $5,000.

Wise is proposing the fees be reviewed after two years, since there is no way to tell right now how many applications will be successful and there is no word yet about any revenue sharing from the province. Those and other factors may allow for the lowering business licence fees in the future.

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