A rezoning application to allow the operation of a proposed medical pot facility in the Duke Point area has received first and second reading from city council. However, the city says it won't go further with the application until it is sure how the development would affect Nanaimo's industrial tax base.
U.S. private equity firm Privateer Holdings has set up a Canadian company, Lafitte Ventures Ltd. to purchase a 1.8-acre property at 1100 Maughan Rd. and apply to rezone the land from light industrial (I2) to industrial (I4).
Earlier this year, the city designated I4 lands in the Duke Point area to include the private production of medical marijuana as a permissible use. The move was in response to regulatory changes by Health Canada that shifted responsibility for production of marijuana from licensed individuals to private contractors. However, city manager Ted Swabey has warned council not to proceed further on the application until key questions are answered.
A central concern is a new B.C. Assessment policy that recognizes medical marijuana as an agricultural use. That designation means the proponent could apply to have the land assessed in the farm category, which means the property could only be taxed at a nominal rate, said Bill MacGougan, regional assessor for Vancouver Island.
Lafitte CEO Brendan Kennedy told council Monday that his company does not intend to apply for farm status. He added the company would be willing to discuss entering into a formal legal agreement to ensure that does not happen. Lafitte aims to begin production of medical marijuana by February 2014.
Swabey told councillors that advice from city solicitors indicate that such an agreement
would not be legally possible. The same would be true for securing a covenant for use of the land, he added, although the city will continue to look at other legal options.
Swabey said the city could face a larger issue about how medical marijuana production could impact taxation on industrial lands. He said it could spur a conversation about re-locating those types of land uses elsewhere.
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