THE CORPORATION OF THE CITY OF NELSON

REQUEST TO APPEAR AS A DELEGATION

DATE: May 28, 2018 Committee of the Whole
TOPIC: Recreational Cannabis – Proposed Amendment to the Land
Development Applications Procedures Bylaw
PROPOSAL: Receive proposed cannabis licensing procedure for information
PROPOSED BY: Staff

ANALYSIS SUMMARY:
Staff are seeking Council direction on a proposed Land Development Applications
Procedures Bylaw amendment, which would establish procedures to process cannabis
retail applications referred to the City by the Province.

BACKGROUND:
The recreational sale and consumption of cannabis will become legal by late summer
2018. The Land Development Applications Procedures Bylaw contains a schedule that
prescribes how the City of Nelson processes liquor licence applications. Since the
provincial licensing application system for cannabis will be similar to liquor, much of the
existing City’s liquor application procedures are proposed to be used for cannabis as
well.

Where cannabis retail applications will differ from liquor licence applications is that the
City of Nelson is considering a cap and it is likely that the City will receive more
applications than the cap would allow. In order to avoid relying on a lottery system
alone, staff are proposing the use of an evaluation matrix to score applications as per
the following:

Criteria Points % of total

The owners failed to comply with previous City Maximum - (20%)
regulations. 20 points

Location and Community Compatibility and Impact: Maximum + 25%

- Minimizes impact on the neighbourhood and 25 points
minimizes nuisance
- Location is at an adequate distance from
sensitive uses and complies with zoning
requirements
- Adequate odour control measures are
identified
- Has a plan to create educational initiatives
around impairment, health, safety, and public
consumption

Security Plan: Maximum + 15%

- Effective fire prevention, suppression, HVAC, 15 points
and alarm systems
 - Adequately address security for the particular
site and operation

Qualifications and Experience of the Applicant(s): Maximum + 30%

- The applicant provides a viable business plan 30 points
- The applicant has previous, successful
business experience and background

Building Façade and Interior Improvements: Maximum + 30%

- The applicant provides a detailed interior 30 points
improvement plan
- The location’s exterior and façade will be
attractive and align with the design guidelines
of the Official Community Plan

Highest Possible Score: 100 100%

Staff will not recommend applications scored at under 50 points. Applications whose
scores are within 10% of each other will be considered materially equivalent.

Those interested in opening a cannabis retail business must first apply to the Province.
The provincial licensing authority will screen applications to ensure that basic
requirements are met. These include background and criminal checks on the applicants
and verifying that the applicant holds a minimum 12-month lease for the propose
premises. Furthermore, the Province will only proceed to review applications that
conform to the local government’s zoning.

Once received by the City, applications will be reviewed and processed by zone
(Downtown, Railtown, Lakeside/Industrial, and Nelson Avenue). There are three broad
steps to processing cannabis retail applications:

Step 1: Step 2: Step 3: Council

Province refers Applications are Staff score approves/denies
application to reviewed against application using application based on
City
bylaws matrix score & public input

The draft bylaw establishes a quarterly processing cycle in order to promote fairness (in
contrast to a first-come, first-serve workflow) and streamline staff and Council time.

Staff are seeking direction from Council on the bylaw content, the priorities expressed in
the matrix, and the weighting assigned to each scoring category.

Advisory Planning Commission (APC) Comments

Although not included in the Zoning Bylaw Amendment that it reviewed, the APC would
like Council to consider giving priority to local businesses and non-profits. Legal advice,
however, is that Council cannot lawfully favour a local business (see Legislative
Impacts).
BENEFITS, DISADVANTAGES AND NEGATIVE IMPACTS:
Most items from the matrix have been used in other jurisdictions. Scoring applications
using a matrix embedded in bylaw provides transparency and certainty for applicants.
Furthermore, it assists Council in its deliberations on recommending applications in
accordance with consistent priorities established by Council.

LEGISLATIVE IMPACTS, PRECEDENTS, POLICIES:

The current procedures schedule on liquor licence applications stands as the principal
precedent for processing cannabis retail applications referred by the Province.

Staff are familiar with using a scoring matrix in purchasing, human resources, and other
processes for selection purposes. Other jurisdictions have used an evaluation matrix to
score cannabis business applications. This includes Vancouver and Newfoundland &
Labrador, as well as numerous American jurisdictions such as Palm Desert, Santa
Barbara, and New York State. While the final score is used to inform staff
recommendations and, if necessary, determine which applicants enter a lottery, Council
retains its ability to approve or deny applications as it sees fit. Pending provincial
legislation establishes that the Province will not issue a cannabis retail licence without
municipal recommendation.

Staff explored using the non-binding scoring matrix to give priority to local, independent
businesses as follows:

One or more owners, directors, or officers of the business - 30 points

cannot demonstrate legal principal residency (that is, the place
where they normally reside for at least six months per year) for
the previous six (6) months within the boundaries of the
Regional District of Central Kootenay.

The business operates under a brand name shared by more - 10 points

than one other cannabis retail store in the country (that is, a
chain business).

A legal review of this proposal, however, advised that the above two items would be
susceptible to legal challenge under the New West Partnership Trade Agreement
between British Columbia, Alberta, Saskatchewan, and Manitoba. The agreement
contains a non-discriminatory clause preventing government entities from purporting to
give preferential treatment to local or independent businesses as compared to any
company or individuals from the other signatory jurisdictions. Nonetheless, the
agreement would allow the City to give fewer points to non-signatories such as federal
or Eastern Canadian companies, for example.

COSTS AND BUDGET IMPACT - REVENUE GENERATION:

The fee for new liquor licence applications is set at $2,000 in the Fees and Charges
Bylaw in order to cover staff time and other costs associated with application
processing, include the required newspaper advertisement. Staff are considering the
$2,000 fee as a starting point for a new cannabis licence application, but may propose a
higher fee for cannabis applications due to additional required staff time.

IMPACT ON SUSTAINABILITY OBJECTIVES AND STAFF RESOURCES:

No impact is anticipated.

COMMUNICATION:
The framework for the draft bylaw was presented at the May 1 st, 2018 open house,
including the possibility of awarding points to local businesses and penalising
businesses with a poor compliance track-record. No comment was received directly on
the evaluation criteria, although there has been written feedback supporting local
businesses’ access to the retail cannabis market.

ATTACHMENTS:
1. Draft Land Development Applications Procedures Bylaw amendment

AUTHOR: REVIEWED BY:

___________________________ ____________________________
PLANNER CITY MANAGER
Land Development Applications Procedures Amendment (Cannabis Licensing) Bylaw No. 3407, 2018

SCHEDULE 9

CANNABIS LICENSING

PROCESSING PROCEDURE

1. Upon receipt of an application accompanied by all required fees and attachments, Development
Services staff will open a file and issue a receipt to the applicant. Incomplete applications shall
not be accepted.
2. If additional information is required by staff to review the application, the applicant must
provide the required information within a timeframe identified at the discretion of staff. If the
deadline is not met, the application and fee will be returned to the applicant.
3. Staff will review the application against all applicable bylaws.
4. The applicant shall post a sign on the exterior of the building or property for a minimum of
fourteen (14) days as per the specifications in Schedule 1.
5. The City will advertise the proposal in one edition of a local newspaper to solicit comments from
the public on the application. Any comments must be submitted in writing to the Director of
Development Services within fourteen (14) days of the publication of the notice.
6. Council may, at its sole discretion, require further public consultation, which will be held at the
applicant’s expense.
7. In the event that more eligible applications are received than there are licences available in any
one quarter (as set out in the Zoning Bylaw), staff will score applications using the following
matrix:

The owners failed to comply with previous City regulations. Maximum - 20

points
Location and Community Compatibility and Impact: Maximum + 25
- Minimizes impact on the neighbourhood and minimizes nuisance points
- Location is at an adequate distance from sensitive uses and
complies with zoning requirements
- Adequate odour control measures are identified
- Has a plan to create educational initiatives around impairment,
health, safety, and public consumption
Security Plan: Maximum + 15
- Effective fire prevention, suppression, HVAC, and alarm systems points
- Adequately address security for the particular site and operation
Qualifications and Experience of the Applicant(s): Maximum + 30
- The applicant provides a viable business plan points
- The applicant has previous, successful business experience and
background
Building Façade and Interior Improvements: Maximum + 30
- The applicant provides a detailed interior improvement plan points
- The location’s exterior and façade will be attractive and align with
the design guidelines of the Official Community Plan
8. Staff will bring forward applications to Council no more than once per quarter. Staff should
consider the final scores in making recommendations to Council.
a. Applications scored at under 50 points should not be considered for recommendation.
b. Applications whose scores are within 10% of each other will be considered materially
equivalent.
c. Should a tie need to be broken, a lottery shall be held, to which the applicants in
question shall be invited.
9. Council will review the application, comments, scores, and City staff reports. A recommendation
will be made to the provincial general manager, as defined by the Cannabis Control and
Licensing Act, by passing a resolution to either approve or deny the application. The Council
resolution will include the following information:
a. The reason for the recommendation;
b. Comments on any conditions that Council feels should apply; and
c. Summary description of the public comments received.
10. Applications for minor changes to cannabis licences not requiring Council resolution will be
reviewed and recommended to approve, approve with conditions or deny by the Director of
Development Services. Posting of a sign is not required for minor changes to a cannabis licence.
Should the applicant wish to appeal the recommendation of the Director of Development
Services, the application will be placed on Council’s agenda for its consideration.
11. In the event that a licence is cancelled or revoked, the City will announce on its website, within a
reasonable timeframe, that the licence has been cancelled. Staff will process new applications
no more than once per quarter.