Ottawa city council should allow private cannabis retailers to set up shop in the capital once the stores become legal next April, municipal staff say in a new report released Wednesday.
In the study released at the first meeting of the newly elected council, staff argue the “anticipated negative consequences of allowing the illicit cannabis market to flourish” if there are no legal retail stores in the city would far outweigh any potential harm the outlets would cause.
Legal storefronts would provide “a safe and regulated source of cannabis that does not support organized crime and limits exposure to youth at the retail level,” the report says.
Under the provincial government’s plan, municipalities have until Jan. 22 to indicate if they want to opt out of allowing storefront cannabis retailers, although they can later change their minds. Cities that opt in cannot reverse their decision, however.
Municipalities that choose to allow private retailers within their boundaries will have virtually no say on where cannabis shops can be located or how many are allowed to operate within a city. The provincial Alcohol and Gaming Commission will have the sole power to decide who gets a licence to sell weed, although the province is calling for a 150-metre buffer zone between pot retailers and schools.
Anticipating a “sizeable” retail market for cannabis, city staff predict giving the green light to pot stores will boost Ottawa’s economy. In addition to creating new jobs itself, the industry will generate indirect spinoffs through money spent on sectors such as security, construction, legal and accounting services and tourism, the study adds.
The report projects Ottawa consumers will spend anywhere from $50 million and $200 million on legal weed in 2019, enough to support between 34 and 69 retailers throughout the city.
“Projections and forecasts aside, it is generally agreed that the legalization of cannabis will result in new jobs, new opportunities for business, new revenues for all levels of government, and the onset of innovation and new technologies,” it says, adding "the rejection of cannabis sales in Ottawa could have a negative effect on the city's brand as a place where entrepreneurs are welcome and a place where small business and industry can grow."
The report also suggests residents could face fewer health risks from buying legal weed than from purchasing cannabis on the black market.
In addition, staff point out the city will stand to lose provincial funding aimed at offsetting the costs of legalizing cannabis, such as increased spending on law enforcement, if it opts out of retail. As it stands, staff say, Ottawa would expect to receive the second-largest allocation of cash from the new fund after Toronto.
The province will pay out a total of $15 million to all Ontario municipalities on a per-household basis in early January to help cover the costs of legalization. The province will distribute a second $15 million after Jan. 22, but cities that opt out of legal retail will receive just $5,000 each. Another $10 million will be set aside for “unforeseen circumstances,” with funding priority going to municipalities that allow legal retail.
The city’s bureaucrats also say they have public opinion on their side, pointing to a recent survey that found a large majority of local respondents favour allowing pot stores to legally operate in the city.
Nearly 24,000 people responded to an online city survey on private cannabis retail in late October and early November, 16,000 of whom live in Ottawa, the report said. Nearly 80 per cent of local respondents said they support the legalization of cannabis, while more than three-quarters were in favour of allowing retail pot stores in Ottawa, the results showed.
The city also commissioned a public opinion poll of about 800 residents that found 48 per cent of residents surveyed back private retail, with 43 per cent opposed. Support for pot stores was “consistent among urban, suburban and rural residents,” the report added.
One in eight residents polled said they expect to purchase cannabis within the next year, with 80 per cent of users declaring they'd prefer to get their weed from a private retail store rather than the government-run website.
Noting the city has the right to collect public feedback on retail applications, staff recommend allowing residents to provide input to the Alcohol and Gaming Commission within the 15-day comment window.
The report also recommends the city establish “key principles” for endorsing retail applications. They include maintaining at least a 150-metre buffer zone between outlets, not allowing stores within 150 metres of publicly owned facilities and keeping proposed shops out of zones where retail is not a principal use.
City council will consider the staff recommendations during a special meeting on Dec. 13. The public will be allowed to address council at that time.