As the total number of licensed cannabis stores in Calgary has soared higher than any other Canadian municipality, a new report shows the city has incurred more than $10 million in related costs since it started preparing for legalization.
The report, scheduled to be presented at council’s community and protective services committee on Wednesday, discusses the economic impact of legalization on city coffers. Since 2016, city administration has spent $3.6 million in cannabis-related costs while Calgary police have incurred approximately $6.7 million, as of Sept. 30.
The city’s total bill of $10.3 million far exceeds the $3.84 million in one-time funding provided to Calgary through the province’s Municipal Cannabis Transition Program, according to city data.
City staff also pointed to some positive economic benefits from cannabis legalization, with physical retail spaces and facilities contributing an estimated construction value of $16.7 million from September 2018 to September 2019.
Dubbed Canada’s cannabis capital, Calgary currently has 66 provincially licensed cannabis retail stores and three federally licensed cannabis production facilities, with development permits for further stores and production facilities under review.
Another 154 locations have been approved in Calgary.
Edmonton has the next most retails stores with 49, followed by Vancouver with 15 and Winnipeg with 14. Toronto and Montreal have just five and four brick-and-mortar cannabis shops, respectively.
Provincially-licensed cannabis stores by municipality as of Oct. 28, 2019. City of Calgary report
City officials have bemoaned having to bear the brunt of administrative and enforcement costs when it comes to cannabis, without receiving equal financial benefits from the federal cannabis excise tax and revenues from provincial product sales.
“That was the big issue with the cannabis file, was that the other orders of government were going to make the revenue and the city was going to end up with the costs,” said Coun. Gian-Carlo Carra, who chairs the community and protective services committee.
“At the time, we were making that argument we had no idea what the costs might be. Luckily, it’s been a much quieter rollout than I think the doom and gloomers were worried about, but there are still material costs to the city.”
But after the UCP tabled a “nightmare of a budget” in October, Carra said funding from the province to address the city’s cannabis-related costs is just one of many things for which city officials will have to step up their advocacy.
“Our estimates were pretty good, which is unfortunately too bad seeing as we don’t have that kind of partnership with the province to help us address those costs,” he said.
In its first budget last month, the UCP government indicated that bringing legalized pot to market has proven costly for the province, with no sign of turning a profit in the near future.
Following a loss of $34 million in 2018-19, further shortfalls are expected in each of the next four fiscal years.
The estimates reflect weaker consumption than initially predicted following cannabis legalization in October 2018, according to the province.
Related
But close to two-fifths of Canadian pot consumers are still purchasing from black market sellers, Statistics Canada estimated earlier this year.
“Administration continues to advocate to other orders of government for a share of cannabis tax revenue sufficient to offset the costs incurred to the municipality as a result of legalization,” the city report stated.
Alberta, Gaming, Liquor and Cannabis has green-lighted 306 retail outlets across the province, a figure that’s expected to grow to more than 500 by 2021.
Coun. Sean Chu said it’s not surprising to find out what weed has cost the city, adding the federal government rushed implementation before the regulation system was ready.
Total costs of cannabis legalization to the City of Calgary in millions from 2016-2019, as of Sept. 30. City of Calgary report
“We knew this was going to happen,” Chu said.
“Like I said at the time, the federal government’s pulling the trigger way too early without lining up all their ducks. Now they’re coming home to roost. So, basically, this is downloading responsibility.”
Calgary police have issued 140 cannabis-related tickets, in addition to 27 by Calgary Transit.
Administration said it would continue to monitor the ongoing implementation of cannabis legalization, despite a lack of recommended amendments to existing bylaws in its report.
The report, scheduled to be presented at council’s community and protective services committee on Wednesday, discusses the economic impact of legalization on city coffers. Since 2016, city administration has spent $3.6 million in cannabis-related costs while Calgary police have incurred approximately $6.7 million, as of Sept. 30.
The city’s total bill of $10.3 million far exceeds the $3.84 million in one-time funding provided to Calgary through the province’s Municipal Cannabis Transition Program, according to city data.
City staff also pointed to some positive economic benefits from cannabis legalization, with physical retail spaces and facilities contributing an estimated construction value of $16.7 million from September 2018 to September 2019.
Dubbed Canada’s cannabis capital, Calgary currently has 66 provincially licensed cannabis retail stores and three federally licensed cannabis production facilities, with development permits for further stores and production facilities under review.
Another 154 locations have been approved in Calgary.
Edmonton has the next most retails stores with 49, followed by Vancouver with 15 and Winnipeg with 14. Toronto and Montreal have just five and four brick-and-mortar cannabis shops, respectively.
Provincially-licensed cannabis stores by municipality as of Oct. 28, 2019. City of Calgary report
City officials have bemoaned having to bear the brunt of administrative and enforcement costs when it comes to cannabis, without receiving equal financial benefits from the federal cannabis excise tax and revenues from provincial product sales.
“That was the big issue with the cannabis file, was that the other orders of government were going to make the revenue and the city was going to end up with the costs,” said Coun. Gian-Carlo Carra, who chairs the community and protective services committee.
“At the time, we were making that argument we had no idea what the costs might be. Luckily, it’s been a much quieter rollout than I think the doom and gloomers were worried about, but there are still material costs to the city.”
But after the UCP tabled a “nightmare of a budget” in October, Carra said funding from the province to address the city’s cannabis-related costs is just one of many things for which city officials will have to step up their advocacy.
“Our estimates were pretty good, which is unfortunately too bad seeing as we don’t have that kind of partnership with the province to help us address those costs,” he said.
In its first budget last month, the UCP government indicated that bringing legalized pot to market has proven costly for the province, with no sign of turning a profit in the near future.
Following a loss of $34 million in 2018-19, further shortfalls are expected in each of the next four fiscal years.
The estimates reflect weaker consumption than initially predicted following cannabis legalization in October 2018, according to the province.
Related
- Cannabis market proving costly for province, no sign of turning a profit
- More than 200 cannabis stores approved in Calgary; city says market's the limit
- Alberta cannabis use up 25%, 500 pot stores likely by 2021
- A year of legalization finds black market cannabis still doing a smoking business
But close to two-fifths of Canadian pot consumers are still purchasing from black market sellers, Statistics Canada estimated earlier this year.
“Administration continues to advocate to other orders of government for a share of cannabis tax revenue sufficient to offset the costs incurred to the municipality as a result of legalization,” the city report stated.
Alberta, Gaming, Liquor and Cannabis has green-lighted 306 retail outlets across the province, a figure that’s expected to grow to more than 500 by 2021.
Coun. Sean Chu said it’s not surprising to find out what weed has cost the city, adding the federal government rushed implementation before the regulation system was ready.
Total costs of cannabis legalization to the City of Calgary in millions from 2016-2019, as of Sept. 30. City of Calgary report
“We knew this was going to happen,” Chu said.
“Like I said at the time, the federal government’s pulling the trigger way too early without lining up all their ducks. Now they’re coming home to roost. So, basically, this is downloading responsibility.”
Calgary police have issued 140 cannabis-related tickets, in addition to 27 by Calgary Transit.
Administration said it would continue to monitor the ongoing implementation of cannabis legalization, despite a lack of recommended amendments to existing bylaws in its report.