Pair of retail cannabis growers look to become 1st in Saskatoon

Home to six recreational cannabis retail stores, Saskatoon is now being asked to approve sites for two companies looking to join the small list of Saskatchewan pot producers.

"Although no cannabis production facility licences have been issued at the time of preparing this report, two applications were recently received and are currently under review," according to a report the city made public last week.

The two budding companies are unnamed in the report. Whether they plan to grow indoors or outside in the city is also unclear. 

But if approved, the operations would join two outside-of-Saskatoon competitors that are farther along in supplying stores with made-in-Saskatchewan cannabis.

This past June, Ontario-based Canopy Growth Corp., owner of the Tweed chain of cannabis retail stores, planted its first cannabis cuttings on a 7-million square-foot cultivation field in an unspecified area of northern Saskatchewan. 

The June 24 plantings happened hours after Canopy Growth Corp. received its outdoor growing licence from Health Canada, according to a news release.

A month later, a second company, Bold Growth Inc., was approved by Health Canada to grow outdoors on a 2.7-million square-foot piece of land near the Saskatoon airport. 

The land is technically located within the neighbouring Rural Municipality of Corman Park; it was that RM's city council that approved the site back in February. 

"Saskatchewan receives higher levels of sunshine than anywhere else in Canada, making it the perfect location for greenhouse and outdoor growing," according to Bold Growth Inc.'s website.

Growth centres

Last year, Saskatoon city councillors approved specific areas of the city commercial growers could grow in, mostly confining them to the city's northern industrial hub and outskirts. (See the light and dark grey areas in the below map.)

In the light grey areas (zoned "light industrial district"), proposed cannabis growers were to be reviewed on a "discretionary," case-by-case basis.

Now, in a move meant to offer "a higher level of confidence in the approval process," the city is proposing to relax that rule.

The city says there are other rules to mitigate the potential impacts of production facilities, including a 160-metre buffer from schools, parks and child care centres, plus a requirement for growers to prevent the spread of odious odours.

Fees for thought

That's not the only change the city is proposing for local cannabis operations.

Last year, city councillors approved a comparatively steep $20,000 business licence fee for cannabis retailers and growers.

• Saskatchewan pot business licence costs: Saskatoon $20K, Regina $0

The city isn't proposing to change that amount now but is willing to lower the annual licence renewal fee to $500 from the originally-set fee of $10,000.

The city has linked its high fees to "the significant costs associated with preparing for the federal legalization and provincial regulation of cannabis, as well as the anticipated costs of administering, regulating and enforcing the bylaw," according to the report.

Specifically, those costs included:

• Working with retailers to find appropriate store locations and guiding them through the development permit process.
• Checking to see if necessary permits from the Saskatchewan Liquor and Gaming Authority — the primary regulator of cannabis operations in the province — were obtained.
• Telling the public about the new cannabis regime.
• Answering a lot of questions from store owners, plus other communities and agencies.

"In addition, significant administrative resources have been required to enforce the bylaw and prosecute unlicensed cannabis retail store owners," according to the report.

The city's cannabis regulatory costs from June 2017 to June 2019 totalled $167,760, while revenues from the seven holders of Saskatoon retail recreational cannabis permits totalled $140,000 — meaning the city came up short by $27,750. (Only six of Saskatoon's seven designated cannabis stores have opened.)

But the city says the $500 renewal fee will help bring things into balance. 

Proposed fees still too high: store owner

Cierra Sieben-Chuback, the owner of the Living Skies Cannabis retail store in downtown Saskatoon, said the lower renewal fee "sounds a lot better than $10,000."

But she still objects to cannabis retailers paying a higher licence renewal fee than most other Saskatoon businesses, which pay a mere $85.

"We are honestly just like any other business," she said. "We just sell this product that's new to the Canadian marketplace. Well, not so new, but it's legal now. So it would be nice to be treated fairly just like any other business."

Sieben-Chuback said that even after reviewing the city's cost breakdown, the fee amounts still seem "silly."

"I still don't understand how it ended up costing that much," she said. "Regina for instance was a zero dollar licensing fee. I really don't see how Saskatoon is so different from Regina or other places in the province."

The City of Regina does not require commercial business licences and has previously told CBC that "to do so solely for cannabis retail outlets would require initiating a licensing regime, as one does not currently exist."

Geoff Conn, owner of the Pot Shack on 8th Street, said a lower renewal fee would be "awesome."

As for the huge deviation from the originally-set fee, Conn said, "That may have been a contingency cost for problems that could have arisen due to the industry. But now they realized that cannabis legalization was a non-event."

One headache persists post-legalization, however, according to the city. 

"The need for staffing resources to address future anticipated enforcement related to unlicensed illegal cannabis operations will continue," according to the city report.

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"As a result, costs associated with regulating the industry as a whole, including enforcement, will be ongoing and unpredictable."