Tax Status for Commercial Marihuana Operations

BC Assessment has confirmed that commercial marihuana operations established to produce medical marihuana might qualify to be assessed at farm rates.  In addition, the Agriculture Land Commission has noted that marihuana is classified as a plant and therefore may be grown on farmland in the agriculture land reserve. 

Both of these decisions could impact where a medical marihuana operation approved by the federal government might locate in a community and the ability of a local government to regulate and control this type of commercial operation.   

The Assessment Authority notes that the property classification for farmland is based on the use of the property, and those portions of the site used for medical marihuana production may qualify for farm class provided it meets all of the legislated requirements under the regulation.  The buildings on a property used for medical marihuana will be classified as Class 1 – residential or Class 6 – Business & Other depending on their use.  A building having more than one use may be split into more than one property class.   See BC Assessment's fact-sheet Medical Marihuana and Property Class for further details

A local government will need to carefully consider the tax benefits it may obtain from a commercial marihuana operation before approving a site.  In addition, it will need to consider where it may want to locate this type of business in the community.

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