6.

Cannabis Legalization - City Bylaw Regulation

Update on Potential Costs

Recommendation
That the February 21, 2018, Citizen Services report CR_5064rev, be received for
information.

Previous Council Committee Action

At the November 6, 2017, Community and Public Services Committee meeting, the
following motion was passed:
That the November 6, 2017, Citizen Services report CR_5064, be referred back
to Administration to return with updated information and potential cost to
Community and Public Services Committee on a date to be determined by
Agenda Review Committee.

At the July 11, 2017 City Council meeting, Councillor M. Nickel made the following
inquiries to Administration:
1. Once legalized, will smoking cannabis, including odour and second hand smoke
concerns, be regulated by the City’s existing bylaws?
2. Is Administration considering bringing forward any changes to related bylaws,
and if so, when can we expect to see them?

Executive Summary
This report provides an overview of bylaw changes under consideration in advance of
the legalization of cannabis in July 2018. It is anticipated that amendments to the
Zoning Bylaw 12800, Business Licence Bylaw 13138, Public Places Bylaw 14614, and
Waste Management Bylaw 17555 will be required. Key timelines and next steps to
bring forward amendments to City Council are identified. Preliminary cost estimates
have also been identified based on current information related to federal and provincial
cannabis legislation and regulations.

Report

Background
On April 13, 2017, the federal government introduced legislation for cannabis
legalization which is expected to come into effect July 2018.

ROUTING - Community and Public Services Committee | DELEGATION - L. McCarthy/ D. Hales/ J. Pater
February 21, 2018 – Citizen Services CR_5064rev
Page 1 of 5
 Cannabis Legalization - City Bylaw Regulation - Update on Potential Costs

In anticipation of provincial legislation and regulations changing, City Council approved

the following text amendments to the Zoning Bylaw 12800 in June 2017:
● The addition of definitions of cannabis sales and consumption, including
classifications for Cannabis Retail Sales and Cannabis Lounges; and,
● Clarifying which existing definitions do not include the production, sale, or
consumption of cannabis related products.

Impact to Bylaws
Currently, existing City of Edmonton bylaws do not reflect cannabis as a legal product.
Specific regulations related to the provincial Cannabis Framework are scheduled to be
completed by the Government of Alberta in February 2018 and any bylaw
amendments will need to be consistent with these regulations.

Four bylaws will require amendment:

● Zoning Bylaw 12800 to include permitting and land use (zoning) categories for
retail sales of cannabis, as well as any other regulations identified by the
province.
● Business Licence Bylaw 13138 to introduce new licence classifications for
cannabis related businesses, which may detail specific criteria that businesses
must meet to be licensed.
● Public Places Bylaw 14614 to regulate the consumption of cannabis in public.
● Waste Management Bylaw 17555 to address the safe disposal of cannabis or
any of its derivatives or waste products.

The Community Standards Bylaw 14600 regulates nuisance odours emitted from
activities on privately owned land. Administration does not anticipate amendments will
be required to this bylaw to specifically address cannabis related nuisance odours.

Draft bylaw amendments will be presented to City Council in April 2018 and will
incorporate provincial regulations and input from public engagement conducted by
Administration in the fourth quarter 2017 (Attachments 2 and 3).

Updates from Provincial and Federal Governments

In November 2017, the Government of Alberta released its final Cannabis Framework
and accompanying legislation. The following key aspects have an impact on
Edmonton:
● Distribution will be via privately-run retail stores and through government
operated online sales.
● The province will likely set minimum separation distances between cannabis
stores and ​places that children and youth frequently visit, such as schools and
parks.
● The Government of Alberta will manage provincial licences and operating
details for stores. Administration will review and issue development permits,

Page 2 of 5 Report: CR_5064rev

 Cannabis Legalization - City Bylaw Regulation - Update on Potential Costs

including a review of provincial separation distances, and issue business

licenses.
● Provincial restrictions on the public consumption of cannabis will mirror tobacco
laws, meaning allowing/banning smoking of cannabis where tobacco smoking is
allowed/banned, and will likely be more restrictive.

In December 2017, the federal and provincial finance ministers agreed on a

coordinated approach to cannabis taxation:
● Provinces will receive 75 percent of the total revenues and the federal
government will receive 25 percent.
● Federal revenues will be capped at $100 million per year with any amount
beyond $100 million to be shared by provinces. It was recognized that
municipalities should receive part of the provincial share based on
responsibilities; actual amounts have yet to be determined. Administration
continues advocacy with the province in this regard.

Attachment 1 summarizes the federal and provincial cannabis acts and regulations.

Economic Impact
There is a potential positive economic impact and additional job creation associated
with cannabis legalization in areas such as: cultivation, distribution, retail, professional
services, health and medical services/research, and tourism. ​Administration is working
with investors and external stakeholders on regional economic development
opportunities and is active in investment readiness activities in the Cannabis sector.

Operating Impacts
Cannabis legalization will impact a number of operational areas including zoning bylaw
and development approvals planners, safety codes officers and inspections services,
Integrated Service Centre, fire prevention officers, peace officers, municipal
enforcement officers, social workers, and labour relations, disability management and
workplace safety.

EPS has also identified impacts including the need for identification of, testing and
acquisition of new technologies to test for cannabis impairment.

Budget/Financial Implications
Following completion of federal and provincial regulations, more precise costs for both
Administration and the Edmonton Police Services will be provided in the spring 2018
supplementary operating budget adjustment. Estimated incremental costs for future
years will also be presented at that time. Administration also hopes to include some
estimates for currently unknown costs related to cannabis lounges and consumables.
At this time Administration estimates approximately $4.3 million (including 38
additional FTEs) will be required to implement and operationalize the effective

Page 3 of 5 Report: CR_5064rev

 Cannabis Legalization - City Bylaw Regulation - Update on Potential Costs

regulation of cannabis. This estimate is preliminary and more time will be needed to
understand all of the direct and indirect costs related to the legalization of cannabis.

At this time Edmonton Police Service estimates a requirement of $5 million to $7

million annually to support 25 to 35 new police officers. These cost estimates are
consistent with other Canadian cities.

Public Engagement
From November 13 to December 30, 2017, the City of Edmonton hosted four
stakeholder workshops, five open houses and an online survey to gather public
feedback on cannabis legalization. Attachments 2 and 3 summarize the feedback. The
engagement activities were focused on four key topic areas to help Administration
prepare for legalization:

● Where future cannabis stores should be allowed to locate;

● What to consider for the application/licensing process for cannabis stores;
● How citizens feel about smoking and vaping of cannabis in public; and,
● What key information stakeholders need to improve their understanding of
cannabis legalization.

While there is no specific location where the public would like to see cannabis stores
located, nearly 70 percent of respondents are concerned about how close cannabis
stores will be to places where children and youth gather. About 50 percent of
respondents somewhat agree or strongly agree that smoking and vaping cannabis
should be banned in all public places. Many stakeholders noted the need for an
efficient, fair process, the desire for clear communication and information sharing with
applicants as soon as possible, and the need for a good review of security measures
at stores. Many stakeholders wanted more information on the application and business
licensing process for cannabis stores. It was noted that coordination with the province
is important to ensure consistent messaging and sharing of information about cannabis
legalization.

Additional public engagement is being planned in March 2018 after provincial

regulations are released in order to gather feedback on separation distances, business
licensing requirements and public consumption bylaws. The feedback will be used in
developing the bylaws.

Page 4 of 5 Report: CR_5064rev

 Cannabis Legalization - City Bylaw Regulation - Update on Potential Costs

Corporate Outcomes and Performance Management

Corporate Outcome(s): Edmonton is a safe city

Outcome(s) Measure(s) Result(s) Target(s)

Ensure development of a livable, Total number of bylaw N/A All relevant bylaws for
safe and sustainable community amendments required for review completed and
through effective implementation cannabis legislation. presented to Council by
of new bylaws. April 2018.

Corporate Outcome(s): Edmonton has a globally competitive and entrepreneurial

business climate

Outcome(s) Measure(s) Result(s) Target(s)

Create opportunities for small to
medium sized business in
Edmonton to provide cannabis
related services consistent with
regulations.
Number of small and N/A Target TBD Increase from
medium sized businesses the previous year.
whose primary line of
business is cannabis
(within the regulations).

Attachments
1. Summary of Federal and Provincial Cannabis Acts and Regulations
2. What We Heard - Cannabis Legalization (Online Survey Summary)
3. What We Heard - Cannabis Legalization (Workshops and Open Houses)

Others Reviewing this Report

● C. Campbell, Deputy City Manager, Communications and Engagement
● L. McCarthy, Deputy City Manager, Urban Form and Corporate Strategic
Development
● R. G. Klassen, Deputy City Manager, Regional and Economic Development
● T. Burge, Chief Financial Officer and Deputy City Manager, Financial and
Corporate Services

Page 5 of 5 Report: CR_5064rev