Pubdate: Wed, 11 Jun 2014
Source: Richmond News (CN BC)
Copyright: 2014, Lower Mainland Publishing Group Inc.
Contact:  http://www.richmond-news.com/
Details: http://www.mapinc.org/media/1244
Author: Kelly Sinoski

CITY FEARS FARM LOOPHOLE COULD CAUSE LOSSES

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.

Richmond Coun. Harold Steves said while MediJean 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."

"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 
MediJean 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.

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.
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MAP posted-by: Jay Bergstrom