The B.C. government is working with local governments on a formula for sharing revenue from legalized cannabis sales, but so far there is no revenue to share, Finance Minister Carole James says.
B.C.’s revenues from sales are lagging far behind neighbouring Alberta, which has many more licensed stores and about five times the sales as B.C., according to the latest Statistics Canada figures since recreational marijuana was legalized in October 2018.
James and other B.C. cabinet ministers are preparing for meetings this month with the Union of B.C. Municipalities to discuss the progress of cannabis store licensing and revenue sharing.
“One of the first steps is to look at who is responsible for what, because the province has responsibility for some of the pieces, criminal record checks, background checks,” James said Tuesday as she released the latest B.C. financial reports.
“The municipalities have the bylaw and licensing piece. The other important piece here is there isn’t a profit right now to be able to share. Our costs are outweighing the revenue that’s coming in.”
— Tom Fletcher (@tomfletcherbc) September 10, 2019
B.C.’s revenues were lower than all other provinces but Prince Edward Island, and the number of stores has lagged behind Alberta. One issue is the size of the entrenched illegal market in B.C., which historically has produced half of Canada’s output.
Alberta now has more than 270 licensed cannabis retailers, while B.C. has issued licences for just over 60. James said legalization last fall coincided with B.C. municipal elections, so their licensing and zoning were delayed.
“Part of it may be B.C.’s long history of an illegal market, and people moving to a legal market from an illegal market they have lived with for a great number of years,” James said. “That’s a shift that may take some time.”
B.C. Public Safety Minister Mike Farnworth has been traveling the province to meet with “craft cannabis” producers who want to be legal, but police need assurances that they are not linked to organized crime groups that have long operated in B.C.
The province’s new community safety unit has begun moving in to shut down unlicensed cannabis dispensaries, which proliferated in B.C. over the years as quasi-medical operations.
James said the next phase of federal legalization, the approval of cannabis edibles, should change the business picture in B.C.
“There may be some shifts as you look to edibles this coming spring,” James said. “That’s the next step in legalization but we’re continuing our work on that piece with UBCM.”