Vancouver Adjusting Sky High Licensing Fee
Vancouver has long been thought of as a hub for cannabis enthusiasts. With the legacy market dating back long before October 17th, 2018 legalization.
With just how ingrained the legacy market is in Vancouver society and culture, we knew it would make it difficult for legal retailers to step in and take away market share. Recently we were made aware of this being made even more difficult with Exorbitant Licensing fees for legal retailers. These yearly fees were sitting upwards of $35K per year! Which is a massive price to pay considering liquor store licenses are $429/ year.
We understand that governments want to tax and profit from this growing industry, but this sky-high fee seems ridiculous and only benefits the illicit players that the legal retailers are trying to replace. This issue is further complicated by the fact that the government of British Columbia is operating its own legal cannabis stores. Some could come to the conclusion that this fee creates an anti-competitive market that benefits the government stores.
This fee coupled with institutional financing troubles for legal Canadian cannabis retailers creates a large barrier to entry, further exacerbating the social equity disparity we see in the cannabis industry.
Luckily for the cannabis stores of Vancouver, the proponents of legal cannabis have spoken up and brought their concerns to the attention of Vancouver council.
Just this past week Vancouver city council passed a motion to rethink the extraordinarily high fee and align it with the rest of municipalities and provinces. This will move the licensing fee down to the $1,000- $5,000 range which seems much more reasonable. Sure, in the short term they may see lower revenue from licenses but overall, it should lead to a much more competitive and successful legal market, which should lead to higher tax revenue collected in the long term.
With Vancouver seriously behind on legal retailer count (36 stores). This should be welcome news to retailers looking to open shop and compete with the legacy market which is already deeply ingrained in customer purchasing habits. Increasing community access to legal cannabis products and providing an environment for these legal retailers to flourish.
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