REGIONAL DISTRICT OF CENTRAL KOOTENAY Committee Report

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REGIONAL DISTRICT OF CENTRAL KOOTENAY Committee Report Date of Report: March 1, 2018 Date & Type of Meeting: March 14, 2018 Rural Affairs Committee Author: Meeri Durand, Planning Manager Subject:

1 REGIONAL DISTRICT OF CENTRAL KOOTENAY Committee Report Date of Report: March 1, 2018 Date & Type of Meeting: March 14, 2018 Rural Affairs Committee Author: Meeri Durand, Planning Manager Subject: CANNABIS ACT LAND USE CONSIDERATIONS File: CANNABIS_ACT SECTION 1: EXECUTIVE SUMMARY The purpose of this report is to provide the Rural Affairs Committee with an update on recent developments and anticipated implications of the Cannabis Act at a Federal and Provincial level and consequential land use considerations for Local Government. SECTION 2: BACKGROUND / ANALYSIS BACKGROUND: At present, cannabis is a controlled substance under the Federal Controlled Drugs and Substances Act and the Access to Cannabis for Medical Purposes Regulation (ACMPR) which allows authorized individuals to grow their own cannabis for medical purposes or obtain it from a licensed commercial or designated producer. The ACMPR replaced the former Marihuana for Medical Purposes Regulations (MMPR) in The proposed Cannabis Act is anticipated to be in place by August 2018 and is intended to set the parameters for the operation of a legal cannabis industry in Canada. It is proposed that the Federal Government (Health Canada) will continue to be responsible for licensing the cultivation and processing of cannabis and that the Province will be able to use their legislative authority with regard to the distribution and retail sale of cannabis. The Province of British Columbia has indicated that retail sale and distribution will be through both public and private retailers through the Liquor Control Branch (LCB). At this time, proposed changes will only address dried cannabis, fresh cannabis, cannabis oil, seeds and plants. Edibles or concentrates, such as resin or hashish will be addressed at a later date, anticipated to be one year following implementation of the Cannabis Act or July Currently within the Regional District of Central Kootenay, Production Licenses (LPs) were enabled under the former Marihuana for Medical Purposes Regulations (MMPR) on lands zoned Agriculture or Industrial in 2014, in parallel with the Provincial governments decision that cannabis production was considered a Farm Use by the Ministry of Agriculture and was deemed a land use that could not be prohibited on lands designated for such purposes. The Ministry of Agriculture produced a Ministry Bylaw Standard in 2015 which established the limits to which local governments can restrict the production of medical marijuana in the Agricultural Land Reserve, and provided local governments with suggested bylaw provisions. The Regional District adopted such bylaw provisions in all of its applicable land use regulations but established a minimum parcel size which was later contested by Provincial staff as being inconsistent with recommendations. Shortly after, the federal government announced its intentions toward legalization of cannabis for both medical and recreational use and further amendments were not pursued in anticipation of changes at a

2 March 14, 2018 Page 2 Federal level. REGIONAL CONTEXT: Outdoor cultivation is historically widespread in the Kootenay region but has been reduced significantly since 2010 by an estimated 80% due to changing market preferences and a reduced market demand south of the border following legalization in bordering states. Outdoor cultivation was and is primarily undertaken on Crown lands and has resulted in concerns regarding water supply and waste product and infrastructure being abandoned. Since the Federal government first established legislation enabling indoor cultivation, there has been a shift toward the use of accessory buildings and residential dwelling for the purposes of personal and designated growing licenses. There are an estimated 2,000 production facilities within the Kootenay Region the majority under Designated Person Production Licenses under the now defunct MMAR (up to 20% of BC s total production). This includes both sites within adjacent Regional Districts and the Regional District of Central Kootenay. These facilities are not required under the ACMPR to notify local governments and in many cases facilities are constructed or modified without building permits. It is unknown at this time the extent of such facilities specifically within the RDCK, but it can be assumed that the number is significant. There is only one Licensed Commercial Production Facility within the RDCK, located in West Creston that obtained licensing under the MMPR prior to 2016 and an additional two or three proposed within the RDCK. It is anticipated that this number will increase as smaller producers pursue new classes in cultivation licensing that better suit the rural and small scale nature of the industry locally (standard and micro-cultivation licenses). There has also been expression of interest in seedling and nursery licensing, standard and micro-processing licensing and non-medical sales. There are currently seven storefront retailers within the City of Nelson, one in rural Creston and two proposals that have come forward in the Villages of Salmo and Kaslo. ANTICIPATED ROLE OF LOCAL GOVERNMENT CANNABIS EDIBLES It is anticipated that guidelines for cannabis edibles and drinkable cannabis products will be addressed at a later date. Local governments may consider this activity similarly to small scale food production and enable as an accessory use to agriculture or as a commercial or industrial use for large scale facilities. Edible products are not currently legal for retail sale. RETAIL AND DISTRIBUTION The sale of cannabis for medical purposes will continue to be from licensed processing facilities directly to registered clients as established under the current system (over the phone, online or via written order with secure delivery by mail or courier). There is no anticipated change that would impact Local Government responsibilities. The sale of cannabis products for non-medical purposes will be through public and private retailers through the Liquor Control and Licensing Branch of British Columbia (LCLB). This will include dedicated store fronts and direct to consumer mail order. Retail or farm gate sales will not be permitted in conjunction with licensed production facilities. Existing retailers will need to obtain licensing from the LCLB and will be subject to local land use regulations and business licensing. A Private Retail Licensing Guide is currently available from the Province for those wishing to pursue licensing. Cannabis may only be sold by a person who holds a retail license and cannabis stores may only sell cannabis that has been grown by federally authorized producers. Local Governments will need to consider the location of such

3 March 14, 2018 Page 3 store front establishments as they relate to schools, public spaces and other locations that may put youth at risk. Existing Land Use Regulations Proposed Land Use Regulations RETAIL SALES are a permitted principal use or accessory use in all commercially designated zones within the RDCK. There is no distinction made currently specific to the sale of cannabis related products. FARMER S MARKET means a market whose vendors either make, bake or grow the products they produce, where farmer s and/or their families display and sell locally grown or processed foods with only a limited number of non-food crafts and no imported products. HORTICULTURE means growing of fruits, vegetable, flowers or ornamental plants for resale with or without greenhouses. HOME BASED BUSINESS No commodities may be offered for sale except those produced on the premises, with the exception of Electoral Area F where commodities may be offered for sale, including those produced off the premises. DEFINITIONS will need to be amended in all nine applicable land use zoning bylaws for cannabis related uses consistent with Provincial and Federal definitions. Cannabis means cannabis as defined in the Cannabis Act (Canada). Cannabis Retail Store means the premises specified in a retail cannabis licenses where the retail sale of cannabis authorized. Retail Cannabis License means a license issued under the Liquor Control and Licensing Branch of British Columbia. Cannabis Concentrate means the hashish, cannabinoids, or any alkaloid, salt, derivative, preparation, compound or mixture, whether natural or synthesized, of cannabinoids. Cannabis-infused Product means a product infused with cannabis that is intended for use or consumption other than by smoking, including, but not limited to edible product, ointments and tinctures. SITING should be limited to specified commercial zones with an established minimum distance from licensed daycares, public recreation facilities and schools. It is not anticipated that at this time there are commercially zoned properties within the RDCK that are sited in proximity to sensitive sites. Options to consider include allowing retail cannabis stores in existing commercial zones provided that they meet the requirements of the zoning bylaw or identifying them as a specified use through the establishment of a cannabis specific zone. Proposed amendments should include a distinction that Cannabis Sales are NOT permitted

4 March 14, 2018 Page 4 as a Home Based Business or in conjunction with sales associated with Farmer s Markets and Horticulture. CULTIVATION AND PROCESSING The proposed regulations for cultivation licenses are anticipated to include both indoor and outdoor cultivation in secured locations. Licensed activities will not be permitted in dwellings. Where cultivation is authorized indoors, it is expected that the regulations will require reasonable measures to prevent the escape of odours and pollen. Under the current system LPs can not be authorized on lands in which there is residential occupancy. It is unknown at this time whether this restriction will remain in place and whether micro-cultivation will be permitted as an accessory use to residential or other land uses. Further detail on production licensing is expected to be released by the federal government in April or May of It is anticipated that the processing and storage of cannabis products will be within secured indoor facilities. It is likely that many of these licenses will be in conjunction with cultivation licensing. There will be no restriction in the ability of a single person or organization to be authorized to conduct a multitude of activities on one site. It is expected that analytical testing and research will also be conducted in under existing licenses. Existing Land Use Regulations Proposed Land Use Regulations FARM PRODUCTS means commodities or goods derived from the cultivation and husbandry of land, plants and animals (except pets and exotic animals not prescribed by the Minister under the Farm Practices Protection (Right to Farm) Act) and any other similar activity including aquaculture as defined in the Fisheries Act, game farming within the meaning of the Game Farm Act, and the raising or keeping of fur bearing animals, within the meaning of the Fur Farm Act. HORTICULTURE means growing of fruits, vegetable, flowers or ornamental plants for resale with or without greenhouses. LICENSED MEDICAL MARIHUANA PRODUCTION FACILITY means the use of land, buildings or structures for the cultivation, processing, testing, research and development, destruction, packaging, storage and shipping of marihuana used for medical purposes as permitted and DEFINITIONS will need to be amended in all nine applicable land use zoning bylaws for cannabis related uses consistent with Provincial and Federal definitions. Standard Cultivation means the large scale growing of cannabis plants and harvesting material from those plants, as well as associated activities Micro Cultivation means the small scale growing of cannabis plants and harvesting material from those plants, as well as associated activities. Industrial Hemp means the growing of industrial hemp plants (those containing 0.3 percent THC or less) and associated activities. Nursery means the growing of cannabis plants to produce starting material (seed and seedlings)

5 March 14, 2018 Page 5 licensed by Canada. A licensed facility also includes office functions that are directly related to and in support of growing and cultivation activities. LICENSED MEDICAL MARIHUANA RESEARCH AND DEVELOPMENT FACILITY means a facility to be used for the research and development of medical marihuana only in a fully enclosed building as lawfully sanctioned by Canada under the Controlled Drugs and Substances Act (as amended from time to time). SMALL SCALE FOOD PROCESSING means storage, packing, product preparation or processing of farm products, if at least 50% of the farm product being stored, packed, prepared or processed is produced on the farm or is feed required for farm production purposes on the farm. SITING Licensed Medical Marihuana Production Facilities were enabled as a farm use in all lands zoned Agriculture and Licensed Medical Marihuana Research and Development Facility were enabled in all lands zoned Industrial. Associated Land Use Regulations Development Regulations for Licensed Medical Marihuana Production Facilities include: 1 The minimum lot area shall be three (3) hectares. 2 The maximum site coverage shall be 35 percent of the lot area unless an area not larger than 60 percent of the lot is covered with greenhouses. 3 All principal and accessory buildings or structures, except fences shall be set back a minimum of 30 metres from all property lines. 4 The maximum height of a principal building shall be 15 metres. and associated activities. Standard Processing means the large scale manufacturing, packaging and labelling of cannabis products destined for sale to consumers and intra-industry sales of those products, including to Provincially authorized distributors, as well as associated activities. Micro Processing means the small scale manufacturing, packaging and labelling of cannabis products destined for sale to consumers and intra-industry sales of those products, including to Provincially authorized distributors, as well as associated activities. SITING should be limited to specified agricultural and/or industrial zones with an established minimum distance from licensed daycares, public recreation facilities and schools. Typical setbacks for cannabis related uses and sensitive sites range from 150 to 300 meters. Smaller minimum setbacks for such facilities from residential uses range between 15 to 90 meters. Outdoor cultivation may be treated as an agricultural use and may include greenhouse operations. Facilities that were licensed in BC under the current ACMPR were deemed to be Farm Uses under the Agricultural Land Commission Act and were subject to the BC Farm Practices Protection (Right to Farm) Act. Farmers are required to meet both the FPPA and Health Canada requirements for odour and waste management. BC Agricultural Bylaw Standards recommend that a minimum lot size not be used for specific farm commodities. It is anticipated that the RDCK requirement for a three (3) hectare minimum lot area does not meet Provincial standards currently. Maximum site coverage and minimum setback distances meet the recommendations under the existing Farm Bylaw Standards established for Licensed Producers (LPs). Form and character guidelines have been established by some Local Governments under established commodity specific Development

6 March 14, 2018 Page 6 Permit Areas. However, recent legal advice has cautioned local governments from pursuing DPAs as a form of regulatory control over cannabis facilities due to concerns of conflict with federal authority and jurisdiction. Until the Federal government has determined its licensing requirements it would be pre-mature to pursue amendments that may be deemed over stepping jurisdictional authority. Health Canada currently requires that Licensed Producers (LPs) comply with Regional District Bylaws and Building Permit requirements under BC Building Code. These requirements do not apply to those producers who hold Registration Certificates for the production of cannabis for personal or designated medical use SECTION 3: DETAILED ANALYSIS a. Financial Considerations Cost and Resource Allocations: Included in Financial Plan: YES NO Financial Plan Amendment: YES NO Debt Bylaw Required: YES NO Public/Gov t Approvals req d: YES NO There are anticipated budgetary implications with regard to Local Government response to the proposed changes presented by the Cannabis Act. Proposed land use amendments will need to be made to the applicable Official Community Plans, Comprehensive Land Use Bylaws and Zoning Bylaws in all 11 electoral areas of the RDCK. This may require public outreach and education and additional requirements for community public hearings. b. Legislative Considerations (Applicable Policies and/or Bylaws): There is uncertainty currently with regard to what role local governments will have in the administration of cultivation, processing and distribution licensing. It is anticipated that there will be more information made available in April or May of c. Environmental Considerations: The Cannabis Industry is an emerging land use where environmental impacts are not yet widely understood. In the United States, the industry has been cited to have higher than average energy and water consumptive needs. However, careful design considerations can offset these impacts at a site level. This will be an important consideration from the perspective of land use impacts and GHG emission targets at a regional scale. d. Social Considerations: The Cannabis Industry is thought to be a significant contributor to the local economy and there is significant interest by potential license holders throughout the RDCK. A careful and considerate approach to regulating the industry will ensure a safe and responsible supply and distribution chain and contribute

7 March 14, 2018 Page 7 to local employment and skill development. e. Economic Considerations: The Cannabis Industry has the potential to create a variety of employment opportunities within the RDCK, including but not limited to, opportunities in cultivation, marketing, analytical testing, distribution systems, seedling and nursery production, value added processing and business development. f. Communication Considerations: The RDCK may want to partner with member municipalities and stakeholders such as existing producers, dispensaries, law enforcement and fire departments on how to proceed. RDCK planning staff has already engaged members of the industry through attendance and presentation at local industry events, including the Kootenay Outdoor Growers Cooperative and sessions with staff at Community Futures. g. Staffing/Departmental Work Plan Considerations: It is anticipated that Development Services staff in Planning and Building will need to set aside resources and capacity in the coming months to investigate and address anticipated changes. h. Board Strategic Plan/Priorities Considerations: Ensuring a safe and sustainable transition of the cannabis industry contributes to agricultural diversity within the RDCK and may contribute to reduction of community wildfire risk and sustainable community water supply by encouraging creative and innovative solutions to cultivation and its traditional impact to communities and the environment. SECTION 4: OPTIONS & PROS / CONS It is advised that RDCK Planning Staff work toward required amendments to the nine (9) zoning bylaws within the RDCK in anticipation of the Cannabis Act being in effect by August Amendments will include changes to Definitions and associated Commercial, Industrial and Agricultural land use provisions. A stakeholder round table may be appropriate to gauge anticipated impacts to law enforcement, member municipalities, elected officials, Provincial staff, industry participants and community members. Proposed Timelines are as follows: 1. Draft Amendments (April 2018) 2. Stakeholder Round Table (May 2018) 3. Bylaw Readings (June 2018) 4. Public Hearings (July 2018) 5. Adoption (August 2018) Bylaw amendments may include provisions for a Development Permit Area once clarity has been provided by the Federal government as to the local government authority to use such tools. It is not anticipated that the Province will have established regulatory direction on such matters until the Autumn of 2018.

8 March 14, 2018 Page 8 SECTION 5: RECOMMENDATION(S) That RDCK Planning Staff work toward required land use amendments to the nine (9) zoning bylaws within the RDCK in anticipation of the Cannabis Act being in effect by August Respectfully submitted, Meeri Durand, Planning Manager CONCURRENCE Initials: Building Manager General Manager of Development Services Chief Administrative Officer ATTACHMENTS: Attachment A Health Canada Information Sheets

Model. Medical Access to Marihuana first established on a case by case basis using exemptions

Model. Medical Access to Marihuana first established on a case by case basis using exemptions Table 1: Legal Framework for Cannabis in Canada Legal Framework Section 56 Exemptions under Controlled Drugs and Substances Act (1999) Marihauna Medical Access Regulations (MMAR) 2001 Marihuana for Medical