Pubdate: Wed, 25 Jun 2014
Source: Globe and Mail (Canada)
Copyright: 2014 The Globe and Mail Company
Contact:  http://www.theglobeandmail.com/
Details: http://www.mapinc.org/media/168
Author: Ian Bailey
Page: S1
Bookmark: http://www.mapinc.org/mmjcn.htm (Cannabis - Medicinal - Canada)

MARIJUANA FARMS DENIED TAX BREAK

Municipalities will be able to collect more revenue from growers who 
do not have the proper agricultural designation

The B.C. government is denying medical-marijuana companies access to 
a property tax break intended for agriculture so that communities 
where the operations are located do not lose potential tax revenue.

On Tuesday, the government announced that it would not allow 
marijuana operations to claim the agricultural tax designation, 
starting with the 2015 tax year. The commitment addresses the 
concerns of B.C. municipalities over the issue.

James Poelzer, chief operating officer of Agrima Botanicals, which 
has been aiming to grow medical marijuana in Maple Ridge, B.C., said 
the decision is unfair.

"We're not trying to exploit a loophole or avoid taxes. We're growing 
plants, which is as agricultural as it gets," he said, protesting 
against a policy that would deny his business the break given to the 
rest of the agricultural sector.

But Agriculture Minister Norm Letnick said marijuana plants are not 
the same as, for example, tomatoes. "Medical marijuana is a federally 
regulated narcotic and tomatoes aren't," Mr. Letnick said in an interview.

Health Canada has approved five medical-marijuana operations in 
Central Saanich, Whistler, Maple Ridge, Nanaimo and Spallumcheen. The 
federal health department is projecting 10 such operations in B.C. in 
coming years.

Mr. Letnick said his government moved quickly in response to concerns 
from municipalities.

The government also announced Tuesday that medical-marijuana 
production will be allowed within the Agricultural Land Reserve, a 
use that can't be overridden by local government bylaws.

Mr. Poelzer said he had yet to calculate the financial effect of the 
new policy but that he doubted it would be a deal-breaker for either 
his operation or others, "It's just something we're going to have to 
deal with going forward," he said of his industry.

But he said he expected patients would pay as increased costs are 
passed on to them.

Mr. Letnick, however, was skeptical.

"I believe as more of these facilities are approved by Health Canada, 
there's going to be a balance in the marketplace as there usually is 
for any good," he said. "You'll find volumes will increase until 
equilibrium, to use my Economy 101, is found between supply and 
demand, which probably means that costs will be moderated by the competition."

The government's move was immediately hailed by the Union of B.C. 
Municipalities, as well as the NDP opposition.

Rhona Martin, president of the UBCM, said that the measure will mean 
more tax revenue for B.C. municipalities.

"What it means is that instead of getting farm taxes [from 
medical-marijuana operations], municipalities will get industrial 
taxes, which are more," she said.

A spokesperson for the organization said there are no forecasts 
available on the revenues that municipalities will receive as a 
result of the new policy. Mr. Letnick also said he did not have any 
such forecasts available.

NDP critic Selina Robinson said she only recently encouraged 
Community Minister Coralee Oakes, involved in the file with Mr. 
Letnick, to take the tax step. "I'm blown away," Ms. Robinson said of 
the development. "I'm pleased she has acted so quickly on this issue."

Ms. Robinson said tax rules for conventional agriculture were never 
designed for marijuana. "No one envisioned we would have marijuana 
growing legally on farms," she said.
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MAP posted-by: Jay Bergstrom