Cannabis retailers may pay 10 times more for a business licence than Edmonton liquor stores

A budding cannabis retailer isn't swayed from setting up shops in Edmonton, even if they have to pay 10 times more for a business licence than a liquor store.

Fire & Flower moved its headquarters from Toronto to Edmonton this year and has applied for business licences to open 16 stores in the capital city.

Nathan Mison, vice-president of government and stakeholder relations for Fire & Flower, said the company is OK with potentially paying the $2,500 a year for a licence compared to $235 for liquor stores. 

Mison sees it as an opportunity to diversify the economy and eventually share the knowledge and practices with other countries looking to legalize marijuana, like Australia, Germany and the United Kingdom.

"Canada is really at the forefront of an exciting opportunity," he told CBC News Monday. "Everybody in the world is watching how we're going to do it." 

The $2,500 a year cost is on top of a one-time $5,600 development permit fee for cannabis retailers, bringing it to a potential total of $8,100 up front for retailers.

The cost recommendation is the minimum needed to recover direct costs of legalizing marijuana, including bylaws and rezoning on the city's part.

The city estimates it will spend $4.3 million on cannabis legalization, with $1.4 million going to police for one-time funding for equipment and training.

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"There is such a level of uncertainty in how this is being rolled out," Mison added. "And we're OK with that because we want to commit to this exciting opportunity and something that Canadians really own at the forefront of a worldwide developing sector."

Kyle Murray, a University of Alberta professor of marketing, said the amount seems reasonable.

"If you're going to be a viable retail location, then an $8,000 up–front cost isn't going to make or break you."

He added that Alberta is favourable to entrepreneurs because it has fewer rules and government restrictions on the number of businesses allowed. 

"We'll have no problem attracting new businesses," he told CBC News. "Here it's wide open. It's a bit of the Wild West and I think if you're a retailer, that's kind of where you want to be."

The city will be dealing with different issues in monitoring cannabis as opposed to monitoring alcohol, which has been regulated for decades.

Coun. Michael Walters said the city is still waiting to hear how much it will get from tax on marijuana sales. The federal government will take 25 per cent of national tax revenues while allowing the provinces to take 75 per cent.

On top of that, the provincial government plans to impose another 10 per cent on sales in Alberta. 

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"The challenge for us is, has been and I think will continue to be, is what kind of support are we going to get from the federal government through the provinces."

"Until then, we're left in the dark," he said.

The recommended $2,500 on cannabis retailers "isn't full cost recovery by any means," he added.

That's one of the lower options of five recommendations in a city report — the fifth and most expensive, is a yearly business licensing fee of $137,000, an amount Walters calls "astronomical." 

"That kind of blows the principal of business friendliness out of the water."

The issue will be before city councillors Tuesday. 

Alberta Gaming and Liquor Commission (AGLC) said they've received 482 applications for cannabis retail licences as of April 30th.

Municipalities in Alberta have to approve applications before the AGLC issues a business licence.

The city estimates about 100 companies will apply for a cannabis retail licence in Edmonton this year.

@natashariebe