Opting out of legal weed stores would be costly, says 2 London councillors

On paper, the City of London can just say no to allowing privately-run retail marijuana stores in the city.But on a practical level, two councillorssay opting out and effectively banning legal pot shops in London is a bad idea.

In areportprepared for the Protective Services Committee, Rosanna Wilcox, the city's director of economic innovation, makes it clear that opting outmeans forgoing asignificant share of the revenue.

The province has announced plans to share $40 million in pot revenue with municipalities over the next year to cover increased administrative and policing costs.

Here'sthebreakdown:

• $10 million is earmarked for "unforeseen circumstances" related to cannabis legalization. This would be prioritized to communities that say yes to pot shops.
• An initial payment of $15 million has already been allocated on a per-household basis. London's share of that is $450,991.
• After Jan. 22, Ontario communities that say yes to retail stores will split an additional $15 million, with their share based on a per-household basis.
• Municipalities that opt in will be eligible for a 50 per cent share of the retail pot revenue that exceeds $100 million in the first two years following legalization.
• Municipalities that opt out will only get $5,000.

Under rules laid out by the provincial government, municipalities have until Jan. 22 to say whether or not they will ban marijuana retailers.

If a municipality opts out, they can opt back in at any time. However, once they opt in, there's no going back to a ban.

'Economic driver'

Considering the money London could miss out on,two councillors say they see no upside to banning legal weed retailers in London.

"I think it would be foolish for London to opt out," Ward 2 Coun. Shawn Lewis told CBC News. "It is going to be an economic driver. If we take a responsible, thoughtful approach it will benefit the community. I think opting out only costs us."

Ward 7 Coun. Josh Morgan agrees.

"Given the rules, I don't think we have much of a choice," he said. "If you opt out, you're opting out of the financial benefits.

Morgan also said opting out won't reduce or eliminate marijuana use. The city will still face costs associated with legalization. A city report pegs those annual costs at $3.7 million.

Holder won't weigh in yet

Mayor Ed Holder said he wants to see what councillors have to say at Monday's committee meeting before stating where he stands on the issue.

Once private retail is legal in April, theAlcohol and Gaming Commission of Ontario (AGCO) will have the authority to license, regulate and enforce the private retail sale of recreational pot.

However, if a municipalityopts in, the city or town will have 15 days to offer their input to each retail application, which will also indicate the store's intended location.

But they won't be given any direct control over store locations. Opting in also means municipalities won't be allowed to enact business licensing bylaws or specific zoning for pot retailers. Pot shops won't be allowed within 150 metres of a school.

Politicians in Richmond Hill and Markham have said they plan to opt-out.

Other Ontario municipalities, such as Windsor, are polling residents to get their view. Meanwhile, city staff in Ottawa are recommending the city opt-inafter polling residents there.

The staff report on the decision facing Londonwill be presented at Monday's Community and Protective Services Committee.

You can read the report below: