Exploring pot on the ALR
Trevor Nichols - May 16 - Biz Releases

Image: Contributed

Only a few weeks after a UBC professor made waves with his proposal to open the Agricultural Land Reserve up to development, Colliers International is suggesting the protected farmland could be used for industrial pot production.

In a new white paper, the real estate firm argues that B.C. cities faced with highly constrained industrial land supplies could benefit from an expanded role for the ALR—in pot production.

Cannabis is set to be legalized in Canada this year, and Colliers points out its impact on commercial real estate in B.C. will likely be “profound,” as new cannabis producers scramble to secure land and warehouse facilities to grow their product.

Kelowna, in particular, is set to see a massive economic boom from legal pot as several big-name companies pour millions of dollars into the region.

Where will we find the land?

In cities like Vancouver and Kelowna, where land is at a premium thanks to the protected farmland within the ALR, “the question of where (production) facilities can go is paramount.”

Right now, medical cannabis production is permitted on the ALR as long as it is inside a warehouse and conforms to a number of specific bylaw requirements. However, because of the strict rules and logistical challenges most producers grow their product on industrial land.

Collier’s report focuses primarily on Vancouver, but that city’s situation mirrors Kelowna’s almost perfectly.

The firm points out Vancouver is experiencing historically low vacancy rates, extremely limited industrial land availability, and high land costs.

In its own 2017, Q4 industrial market report for the Thompson-Okanagan, the firm says prices rose in Kelowna as industrial vacancy rates “reached a new historical low” as a result of “limited available supply on the market.”

Open it up to recreational

In its paper, Colliers suggests expanding the permitted uses of the ALR to allow for recreational pot, as well as medical.

“Utilizing greenhouses on portions of the least arable Agricultural Land Reserve land provides a viable alternative to industrial land for cannabis production operations,” it reads.

It says putting pot on less desirable agricultural land would help because it would allow traditional industrial users to contribute to the economy without having to compete for space with giant new cannabis companies.

Colliers also says operating costs are “substantially lower” for cannabis production in greenhouses than industrial warehouses. Since ALR land is much cheaper than industrial land, it would also mean “significantly lower barriers of entry” for investors into the market.

However, it’s still not clear if whether the government will extend recreational cannabis “the same broad support it has provided for medicinal cannabis” in regards to the ALR.

Local bylaws would impact Kelowna prodcution

Even if the government does allow recreational cannabis production on the ALR, it won’t necessarily mean swaths of the ALR around Kelowna will be given over to pot.

Kelowna’s community planning manager, Ryan Smith, has told Okanagan Edge in the past the city gets “pretty frequent” request about growing medical pot on the ALR, with someone making an inquiry every week or two.

Despite the keen interest, Smith says municipalities have some tools to discourage pot producers from setting up on farmland.

While they can’t outright ban medical cannabis on the ALR, they can regulate it.

Pot grown on the ALR has to inside an enclosed structure, and the municipality has several rules outlining what those structures have to look like. There are also rules surrounding how far away the structure has to be from waterways, parks, and schools.

Along with energy and infrastructure obstacles, Smith says it’s a lot of hoops to jump through, and the city isn’t aware of anyone who has made it through them all.

While Smith said he is “concerned” about what legalized recreational pot will mean for the ALR, he said the city won’t weigh in on it until the laws are set in stone.

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