Pubdate: Sat, 07 Jun 2014
Source: Vancouver Sun (CN BC)
Copyright: 2014 Postmedia Network Inc.
Contact:  http://www.canada.com/vancouversun/
Details: http://www.mapinc.org/media/477
Author: Kelly Sinoski
Page: A8
Bookmark: http://www.mapinc.org/mmjcn.htm (Cannabis - Medicinal - Canada)

MUNICIPALITIES FEAR LOOPHOLE COULD COST THEM TAX WINDFALL

Scheme Would Allow Producers to Apply for Farm Status

Metro Vancouver directors worry municipalities could lose significant 
tax dollars - while the federal and provincial governments rake the 
money in - under a scheme that allows large-scale medical marijuana 
producers to apply for farm-tax status even if they aren't located in 
an agricultural area.

A new Health Canada law came into effect in April that regulates new 
commercial facilities that produce, process and distribute medical 
marijuana and prohibits production in residential homes.

B. C. Assessment has ruled that licensed commercial marijuana 
production, even if it is located in an industrial or commercial area 
and includes labs and offices, may qualify for the farm 
classification as "medicinal plant culture."

And once licensed by Health Canada, the farm class status can't be 
denied, according to a Metro Vancouver report, and lands used as a 
licensed medical marijuana production facility are treated like any 
other farm in terms of assessment.

This means a medical marijuana producer operating out of a $ 2.1- 
million, 25,000 sq. ft. warehouse on a one- acre industrial property 
in Richmond, for example, would pay just $ 395 in annual taxes if it 
received farm-class status - 99 per cent less than the $ 33,100 a 
comparable business would have to shell out.

The Agricultural Land Commission has also noted that marijuana is 
classified as a plant and therefore may be grown on farmland in the 
Agricultural Land Reserve.

"This is all about other orders of government making money," Burnaby 
Mayor Derek Corrigan, chairman of Metro's regional planning and 
agriculture committee, said Friday. "Imagine what would be paid to 
the federal and provincial government in taxes. The only ones not 
making any money are local municipalities that have to treat this as 
agricultural land. Why should municipalities subsidize the growing of 
marijuana?"

A Metro Vancouver report by planner Tom Pearce warns the potential 
property taxation implications could be significant for the region 
depending on how many medical marijuana producers apply for farm 
class status on properties currently billed as industrial or 
commercial. So far, Health Canada has licensed 13 medical marijuana 
producers across Canada, with six of those in B. C. - including one 
in Whistler and three in Metro. More applications are being assessed.

Richmond's Medi-Jean also has a licence from Health Canada to grow 
medical marijuana for research and development, but not commercial, 
purposes, while Delta council this week gave conditional approval to 
an application by International Herbs Medical Marijuana Ltd. for an 
industrial-scale medical marijuana growing operation on Annacis Island.

Richmond Coun. Harold Steves said while Medi-Jean pays regular taxes, 
the move could open the door to more exemption applications by 
producers of medical plants, such as St. John's wort, who want to 
avoid hefty tax bills.

"It's a pretty dangerous precedent we're setting here," he said. "If 
you raise horses, you don't qualify for farm tax status but if you 
grow marijuana, you do."

Ernie Daykin, mayor of Maple Ridge, said it's no wonder people are 
concerned, noting municipalities have become "de facto regulators" of 
the new system. "It's our police and firefighters that have to 
respond to the complaints," he said. "We were told we can regulate it 
but we can't prohibit it."

Dharmesh Sisodraker, deputy assessor with B. C. Assessment for the 
Vancouver Sea to Sky region, said it is too early to say how many 
farm-class applications have been made, noting the new regulations 
just came into effect and medical marijuana operators have months to 
make an application.

Pearce suggests a municipality may have recourse to object to the 
farm-class status if the farm use is not consistent with the 
permitted uses in an industrial or commercial zone.

Corrigan said more should be done to anticipate problems in the industry.

"I don't think it's going to be like growing tomatoes," he said, 
"it's going to be grown behind barbed wire fences. This is big 
business and it's all about industrial business and has little 
relation to agriculture."

He added: "It's fraught with issues and we should be saying we need 
to be more involved."
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MAP posted-by: Jay Bergstrom