Medical pot grow-ops won’t get tax break in B.C.

B.C. prevents commercial marijuana grow-ops from getting farm tax break

By James Keller, The Canadian Press

VANCOUVER – Medical marijuana producers setting up shop in British Columbia won’t be able to claim a lucrative property tax break designed for farms and other agricultural operations, the provincial government said Tuesday.

Mayors in B.C. have been warning for months that commercial grow-ops could get out of paying nearly 90 per cent of their property taxes if they’re lumped together with farms, even if they’re operating on expensive industrial land.

The province’s agriculture minister, Norm Letnick, said medical marijuana facilities are complex industrial operations — and that’s how they’ll be taxed.

“Local governments are concerned — and fairly so — that there might be some extra costs associated with these facilities,” Letnick said in an interview.

“We’re talking about a federally regulated narcotic, so it’s different than growing mushrooms or cherries or tomatoes in a greenhouse.”

The debate over how to tax medical marijuana operations is happening as governments across the country figure out how to deal with an expected influx of such facilities.

New federal rules took effect in April that shift marijuana production to licensed commercial producers, rather than patients, who were previously allowed to grow their own. An ongoing court case has meant that some patients are still growing at home, but the commercial system has proceeded.

Health Canada has approved 13 producers, including five in B.C., though many more are expected to join them. There is no cap on the number of commercial growers and Health Canada is currently reviewing hundreds of applications.

B.C.’s property tax rules set rates based on a list of factors, including how the land is being used. Agricultural rates are up to 87.5 per cent lower than other tax categories.

Some mayors were concerned that allowing medical marijuana operations in industrial areas to claim the farm credit would downgrade the value of land that is taxed at a much higher rate.

For example, Maple Ridge Mayor Ernie Daykin said a piece of land that would normally generate more than $30,000 in property taxes could be worth just a few hundred dollars if it was considered a farm.

“It’s going to be a pharmaceutical, industrial application,” said Daykin.

“It (Tuesday’s announcement) will allay the fears of a number of municipalities that could have seen a significant hit on the taxes they could collect on a valuable piece of property.”

At the same time, the province also confirmed marijuana production would be considered a “farm use” within the Agricultural Land Reserve, 4.7 million hectares of protected farmland located across the province.

James Poelzer of Agrima Botanicals, a medical marijuana operation in Maple Ridge that’s close to receiving final approval, said it doesn’t make sense to consider marijuana production farming in one context but not in another.

“I don’t really know how much closer you can get to farming or agriculture than growing plants,” he said.

“We’re not doing anything to try and exploit or avoid taxes. What we’re doing is growing plants — that’s our sole business.”

Agrima Botanicals’ facility is located within the Agricultural Land Reserve, though Poelzer said the company is currently paying industrial property tax rates.

Poelzer said his company likely would have applied for the farm tax break, but he said it’s not a make-or-break issue for his company.

The decision to consider marijuana production “farm use” within the Agricultural Land Reserve also means local governments will not be able to prevent medical pot facilities in those areas.

Some municipalities, such as the Township of Langley, have passed bylaws banning marijuana facilities on agricultural land and restricting them to industrial areas.

But Langley Mayor Jack Froese said the provincial government has effectively overridden the town’s bylaw when it comes to the Agricultural Land Reserve.

“Having an intensive operation, that’s challenging, and in industrial land, we have a lot more authority and bylaws,” he said.

“We want to make sure that the new system protects our residents and is safe for the people working there.”

Follow @ByJamesKeller on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The City of Victoria filed a petition with the Supreme Court of B.C. March 2 to have it clarify whether, under the Trustee Act, Beacon Hill Park can be used for temporary sheltering. (Black Press Media file photo)
Victoria asks court to clarify if Beacon Hill Park can be used for sheltering

City of Victoria filed petition to Supreme Court of B.C. March 2

The application proposing to rezone Western Speedway was passed by Langford’s planning, zoning and affordable housing committee Feb 8. A petition has since been started by residents of Trudie Terrace, hoping to stop the proposed residential portion of the development plan. (CBRE Victoria)
Petition opposing Western Speedway development proposal gains steam

Save Thetis Heights Neighborhood petition aims to stop extension of Trudie Terrace

Activists from the Fairy Creek Blockades hold the injunction application notice which was submitted by logging company Teal Jones to the B.C. Supreme Court. The application, which asks to have blockaders removed from the sites that stop access to cut blocks, is set to be heard on March 4. (Photo contributed/Joshua Wright)
Activists hunker down to protect Fairy Creek near Port Renfrew from logging

Forest company Teal Cedar applies for injunction to remove seven-month-old blockades

Boma Brown won the Emerging Leader Award for her work founding the Support Network for Indigenous Women and Women of Colour. (Courtesy of Boma Brown)
Victoria SNIWWOC founder up for national women’s award for volunteer efforts

Victoria’s Boma Brown is a semi-finalist in the running for the L’Oreal Paris Women of Worth award

Older rental apartments are prime candidates for renovations, and could result in lost affordable housing stock. (Zoë Ducklow photo)
B.C.’s renoviction overhaul a good start, but won’t preserve affordable stock, lawyer says

And still no protection for people who can’t pay rent due to COVID-19

(Photo by Marissa Baecker/Shoot the Breeze)
B.C. WHL teams to hit the ice with Kelowna, Kamloops hub cities

Kelowna, Kamloops centres chosen to host B.C. WHL teams for 24-game regular season

The victim of the homicide on Cowichan Lake Road early Monday morning was 17 years old, and was stabbed in the incident. (File photo)
Duncan homicide victim was 17 years old

RCMP report that teenager was stabbed

(Black Press file photo)
Agassiz boy, 11, dies from ‘extensive injuries’: Homicide team

Agassiz RCMP were called out Friday to assist with a child in medical distress

(File photo)
RCMP arrest man after report of gun-toting threat-maker near Parksville schools

43-year-old man taken into custody; students at nearby schools were asked to stay inside

The machines are akin to ATMs and allow drug users at risk of overdose to get hydromorphone pills dispensed to them after their palm has been scanned to identify its unique vein pattern. (CANADIAN PRESS)
Feds dole out $3.5M for ‘vending machines’ to dispense safer opioids in B.C.

The machines are located in four cities across Canada, including Vancouver and Victoria

Kelowna’s lakefront visitor centre is one of 130 around the province. Tourism businesses have been hardest hit by COVID-19 restrictions on travel. (Destination B.C.)
Tourism, small business getting COVID-19 help, B.C. minister says

$300M grant program has delivered $50 million so far

Most Read