Canadian municipalities are constantly facing new challenges.  Uber leaps to mind.  Many of these come somewhat out of left field to surprise council members and often to whack them over the head as the public chortles and fumes as councillors writhe.

On a trip to study the interesting cities of Seattle and Portland last week, one of the more fascinating discoveries for me was the headline in the April 12 edition of The Seattle Times: 
"Pot sales top wine, bread, milk in Spokane County".

A government survey revealed that legal marijuana sales in Spokane County were larger than the sales of such household staples as milk and bread in the past year.  The survey showed that on an average per household basis, spending was:

This is of interest to municipalities because inevitably in Canada our towns and cities could get a bit side-swiped by the new federal government regulations on marijuana being contemplated by the Trudeau government, and being mused upon by various provincial and territorial governments.

What retailers would be allowed to sell pot?  If so, would cities need special zoning regulations, perhaps incorporating such restrictions as proximity to schools and churches?  Could sales happen at liquor stores, pharmacies or specialized retail stores?  Would manufacturers be allowed in commercial zones or in a downtown, or be restricted to industrial sites?  What security regulations would be needed?  How will police patrols or neighbourhood security be impacted?

And in the larger issue category, and perhaps of particular interest to local governments who are starving for new revenue streams, how will government taxes and revenues for legal marijuana sales be shared?

In Oregon and Washington, where state voters have approved the legal sales of marijuana for adult recreational use, local governments share in a modest percentage of sales.  For example, Spokane County will receive $443,000 as its share of the state excise tax on marijuana; the city of Spokane will get $123,000 of that amount.   More sales mean more revenue for cities

Marijuana sales in Spokane County were $14.5 million in the first quarter of 2016.  Sales in Washington State are regulated by the Liquor and Cannabis Board.

Colorado received more than $13 million in fees and taxes in the month of August, 2015.  Sales are booming across the country and 23 states allow legalized usage for medical purposes, and four states and the District of Columbia allow adults to legally use cannabis for recreational purposes. 

Legal pot sales were more than $5 billion in the US last year.  Predictions for 2016 pot revenue in the US are described by observers as robust'.

It is inevitable that towns and cities in Canada will get involved in this issue, yet few are talking about the implications and their impact on local issues and concerns.  I remember being on City Council when the province of Ontario brought in legislation to allow slot machines linked to race tracks and the storm of local controversy that caused.  Municipalities received 5% of local revenues at that time, although I think that has been slightly tweaked up in recent years.

It would be prudent for municipalities and their associations to start having conversations about this issue now, rather than simply reacting when proposed legislation comes thundering down the track.  There may well be a battle brewing about which order of government gets what share of revenues.  Municipalities will want to be well-prepared for that discussion, because millions of dollars are at stake for Canadian towns and cities.