Cash crunch created by city’s new cannabis regulations puts second dispensary in jeopardy

Nelson Cannabis Compassion Club’s (NCCC) manager Phillip McMillan said these bylaws restrict so much of what we can do in this city. — Creative Commons photo
Nelson Cannabis Compassion Club’s (NCCC) manager Phillip McMillan said these bylaws restrict so much of what we can do in this city. — Creative Commons photo

A second medical cannabis dispensary is reeling from the city’s recent decision to set the business licence fees and regulations high in order to recover its costs.

The Nelson Cannabis Compassion Club’s (NCCC) manager Phillip McMillan has taken to Facebook to alert people to the fact the long-serving business needs to raise $5,750 by the end of the month in order to stay open.

The NCC has been operating in the city since 2000 but now it must pay $5,000 for the new licencing fee to city — under the recently approved Medical Cannabis Business Licence Bylaw  —and $750 for the variance fee so it can stay in its present location.

“These bylaws restrict so much of what we can do in this city,” McMillan said earlier this month at a public meeting on the zoning amendment.

He said a lot of the cannabis business bylaw requirements — such as doubling staffing levels, increased security and setting the business licence at $5,000 per year — add unnecessary cost to sick and dying people who require marijuana as medicine.

He noted that the NCCC moved over $1.1 million in product last year yet, in an effort to keep prices low for its customers, the club lost $15,000.

Last week the Kootenay’s Medicine Tree executive director Jim Leslie said the Nelson dispensary is facing financial hardship as a result of the new regulations.

“This license fee may force us to close our Nelson dispensary, which threatens the current services we offer Nelson’s most ill residents and the community at large,” he said.

“It’s going to be very, very difficult to stay open, bottom line. We want to protect the services we offer here and the good work we have done over the last two years … but quite frankly our survival is in jeopardy.”

But the $5,000 fee the city will be charging for a dispensary business licence is not a punishment, said Mayor Deb Kozak, and instead was established to provide for the regulation of the dispensaries solely by the city and reflects the regulatory and enforcement responsibility — or the costs — incurred by the city. Some cities, such as Vancouver, charge $30,000.

“(The business licence) is a direct reflection of the amount of time and energy everybody — staff, police, council — has put into this. It is not meant to be punitive at all,” she said.

Unlike prescription drugs and alcohol — which are regulated provincially and federally — the city would be completely responsible for regulating the dispensaries, she said. The bylaw will impact four city departments — administration, business licence inspector, bylaw enforcement and police — while active enforcement of regulations is not required for other businesses receiving a business licence from the city.

Business licence fees in Nelson range from $5 per day for a busker, to $1,040 for retail sales space in a mall over 10,000 square feet.

Under the new bylaw the city will permit the use of cannabis dispensaries in specified downtown zones (C1 and MU4), with “additional requirements limiting proximity to certain facilities and each other.”

The separation limit is 300 metres east and west in the C-1 zone, and 150 m. of separation north and south in the same zone; in the MU-4 zone it would be 150 m. separation as well as 80 m. separation from schools, youth and recreation centres.

People will be able to apply to council to vary the proximity requirements in the Zoning Bylaw if necessary. The fee for a minor development variance permit will be either $500 or $750 depending on whether one or two variances are required.

In addition to beefing up security, cannabis-related businesses must not “allow a person under the age of 19 on the premises unless that person is accompanied by a parent or a legal guardian.”

The NCCC will be exploring fundraising ideas, said McMillan, but until then it will be setting up a donation jar at the club (606 Front St.).

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