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Cities fret over tax, farmland hit from medical pot

Cities worry that marijuana producers that set up in industrial areas will get farm tax status in order to dramatically reduce their property tax bills.  - File
Cities worry that marijuana producers that set up in industrial areas will get farm tax status in order to dramatically reduce their property tax bills.
— image credit: File

Metro Vancouver politicians are increasingly worried their cities will receive less in property tax if big medical marijuana producers set up shop on industrial land and then convert the property to farm tax status.

In one example outlined in a Metro staff report, a 25,000-square-foot warehouse in an industrial business park in Richmond that pays $33,500 in taxes to the city would pay just $395 – a 99 per cent reduction – if a new pot producer moves in and secures farm status.

B.C. Assessment has already ruled medical marijuana to be a qualifying agricultural use for the lower farm tax rate because it's classified as "medicinal plant culture."

"It's a pretty dangerous precedent we're looking at here," Richmond Coun. Harold Steves told Metro's regional planning committee June 6.

The issue has left cities weighing whether to allow pot to be grown on farmland to avoid erosion of their industrial tax base.

That scenario also concerns Steves, who said nobody wants to see "some big grey concrete box that looks like a D-Day bunker" erected in the midst of productive farmland, reducing the capacity to grow food crops.

"If this is about bunkers with barbed wire fences around them, it should be in industrial areas," said Burnaby Mayor Derek Corrigan.

He said it's unfair to local cities that they may lose out while the federal and provincial governments stand poised to earn more tax revenue as medical marijuana becomes a commercial industry.

"Why should municipalities subsidize the growing of marijuana through agricultural zoning and taxes while other orders of government make significant amounts of taxation?" Corrigan asked.

New pot plantations will be "fraught with issues" and bear very little resemblance to conventional agriculture, he predicted.

"Eventually these grow into winery-style businesses where there's ancilliary uses, tasting labs and all sorts of fallout as a result of it."

The Agricultural Land Commission has already ruled medical marijuana can be grown on farmland in the Agricultural Land Reserve.

Health Canada has so far issued 13 licences for commercial producers of medical pot, which were supposed to become the only legal suppliers as of April 1.

But a court injunction granted in March allows previously authorized medical marijuana home growers to continue pending a decision on a constitutional challenge in the Federal Court of Canada.

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