Pubdate: Wed, 25 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: A2
Bookmark: http://www.mapinc.org/mmjcn.htm (Cannabis - Medicinal - Canada)

NEW BUSINESS CLASS FOR POT GROWERS KILLS FARM TAX STATUS

Classification Preserves Municipalities' Property Tax Revenues

Commercial medical marijuana operators in B. C. will not be allowed 
to claim farm tax status after the provincial government created a 
new business classification for the federally licensed facilities.

The new classification is in response to a Health Canada law that 
came into effect in April that regulates new commercial facilities 
that produce, process and distribute medical marijuana and prohibits 
production in residential homes.

Coralee Oakes, minister for community, sport and development, said 
the province designed a new business class after B. C. municipalities 
complained they could lose significant tax dollars under the scheme 
while having to pay more for increased regulation of the facilities.

The concerns arose after BC Assessment ruled that licensed commercial 
medical marijuana production could receive farm tax status even if it 
wasn't located on agricultural land.

A Metro Vancouver report by planner Tom Pearce had warned 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 billed as industrial or commercial.

Oakes said the new classification, which will apply to all federally 
regulated narcotics, will ensure local governments do not lose 
potential property tax revenues from Health Canada-licensed 
production facilities. Under the new rules, medical marijuana 
production on the Agricultural Land Reserve will still be an 
allowable farm use, but will not be eligible for farm tax status.

"While this is new we have to look long term, 10 years down the road, 
to make sure we are capturing the assessment piece," Oakes said 
Tuesday in an interview with The Vancouver Sun. "It's a large 
industry. The facility in Nanaimo is a $ 10- million to $ 15- million 
facility. It's not a like mom- and-pop operation."

Health Canada has so far licensed 13 medical marijuana producers 
across Canada, with six of those in B. C. - including one in Whistler 
and three in Metro Vancouver - while another 100 are being assessed, 
including one from Highmark in the Township of Langley. If they were 
allowed to get farm tax status, a medical marijuana producer 
operating out of a $ 2.1-million, 25,000-square foot warehouse on a 
one- acre industrial property in Richmond, for example, would pay 
just $ 395 in annual taxes - 99 per cent less than the $ 33,100 a 
comparable business would have to shell out.

Richmond Coun. Harold Steves, who sits on Metro's regional planning 
and agriculture committee, welcomed the move Tuesday, saying he had 
been worried a precedent would be set, with people growing St. John's 
Wort or other herbal medicines seeking farm-class tax status. Metro 
had planned to take the issue to the Union of B. C. Municipalities this fall.

"What we wanted to do was to make sure that if medical marijuana went 
onto industrial land they paid the full tax," he said. "This is an 
important move. Basically we wanted to encourage these developments 
to go on industrial land and a lot of municipalities didn't want to 
do that because they would pay lower taxes. When you have to provide 
extra services for a business, it really hurts when they pay less taxes."

Richmond's MediJean, which has a licence from Health Canada to grow 
medical marijuana for research and development, agreed to pay regular 
taxes when it set up next to the city's RCMP station. David Taylor, a 
director with Highmark, a company seeking a licence to open a medical 
marijuana facility in the Township of Langley, said his company 
wasn't planning on seeking a tax break.

Oakes said the move is consistent with the approach being taken in 
neighbouring Alberta, but the province will continue to review it to 
make sure it is in the best interests of both parties.

The exclusion from farm classification for property tax purposes will 
take effect for property assessments in the 2015 taxation year.
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MAP posted-by: Jay Bergstrom