Authorities in British Columbia have followed the footsteps of the city of Nanaimo, which closed a possible tax loophole that may be exploited by medical marijuana growing firms.
The B.C. government has exempted federally approved medical marijuana grow operations from the agricultural activities that are considered for farm classification for property tax and assessment purposes.
The issue gained the attention of Nanaimo city council just before Tilray, a medical marijuana producer, launched its operations at a location in the Duke Point Industrial area, reported the Province.
“I’m very, very pleased, and it’s definitely the right way to go,” John Ruttan, the Mayor of Nanaimo noted. “Any kind of revenue-producing business that may need to rely on protective services must pay their fair share for those services, particularly in industrial situations.”
Nanaimo passed a resolution in April that allows for more supervision over medical pot growing, a proposal that was backed by the Association of Vancouver Island and Coastal Communities. The city was concerned that medical cannabis companies may classify their operations as farm use under B.C. Assessment and hence benefitting from reduced taxes. Industrial lands are charged higher taxes than agricultural operations.
The resolution resulted in Tilray accepting to pay the higher taxes before it began its operations. The company is one out of the only five facilities that are federally licensed to dispense medical marijuana.
British Columbia also follows the path taken by the nearby Alberta, which insists on secure and highly regulated operations. However, B.C. authorities will still view growing of medical marijuana as allowable farm use as per the Agricultural Land Reserve which shields it from prohibition by local bylaws.
B.C. began implementing its federal medical marijuana rules on April 1. Medical pot firms will no longer be classified as allowable farm use in the 2015 taxation period. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com