(Canadian Press)

One month after legalization, illicit cannabis shops doing brisk business

When asked what has changed since Canada legalized on Oct. 17, one staffer said: “We’re just busier.”

The three surveillance cameras and the steady flow of people in and out of the small, nondescript grey building are the only hint of the brisk business this downtown Toronto cannabis dispensary does behind closed doors.

Once inside, two men behind a white desk under a vintage chandelier ask patrons to provide government identification and fill out a membership form. Then, customers are allowed to enter another room through a steel door, where an array of pot products are on display in a glass case.

When asked what has changed since Canada legalized on Oct. 17, one staffer said: “We’re just busier.”

Among the many shoppers on Thursday, a fourth-year university student said he preferred to buy from this dispensary to avoid the delivery problems that bedevil the provincial cannabis store. Also, he didn’t want the transaction to appear in his banking records.

READ MORE: Early data suggests no spike in pot-impaired driving after legalization

“It’s just too much of a hassle… it’s all about convenience for me,” he said.

It’s been nearly a month since recreational pot was legalized across Canada, and despite raids by local police departments and government warnings to illegal pot shop operators to shutter their doors or face consequences, the black market continues on.

Product shortages, delivery delays and other problems plaguing the roll-out have not helped, said Martin Landry, an analyst with GMP Securities.

“It hasn’t been perfect… And probably as a result the shift away from the black market has not happened as fast as most expected. But I think that’s short term.”

Canada legalized cannabis for recreational use on Oct. 17 with the elimination of the black market as one of the Liberal government’s main goals.

READ MORE: Pot sales down by nearly 70% on second day of legalization in B.C.

There was little expectation that it would disappear quickly, as the illicit market has survived in U.S. states like Colorado and Oregon years after legalizing recreational pot.

Statistics Canada estimates that during the fourth-quarter of this year there will be 5.4 million people wanting to purchase legal cannabis and 1.7 million continuing to buy illicit pot across Canada. Spending on pot during that period may range from $816 million to $1.1 billion while purchases of illegal cannabis may range from $254 million to $317 million, the agency estimates.

But getting users to switch from illegal sources hinges, in part, on whether the legal offering is a competitive one.

Meanwhile, in addition to limited amounts of legal pot products, cannabis-infused edibles are prohibited from sale until 2019.

In Ontario, where privately run brick-and-mortar cannabis stores won’t be ready until next April, and British Columbia, which has just one government-run pot store, illicit shops continue to draw in clientele.

READ MORE: POLL – will legalization change your habits?

The Weeds Glass and Gifts stores in Vancouver are “hyper busy right now,” said its owner Don Briere.

His chain of stores in Vancouver are benefiting from the closures of other illicit dispensaries but also because B.C.’s lone legal store is located more than 350 kilometres away in Kamloops, B.C.

“How are you going to service five million people in British Columbia with one store that is nowhere near the population centre?” Briere said in an interview.

Briere shut down nine of his shops across the country but is servicing clients online and keeping his four Vancouver shops open while awaiting the outcome of ongoing litigation. Other dispensaries have also decided to keep their doors open while waiting for their license applications to be processed.

Still, the stiffer penalties under the Cannabis act As of Oct. 17, which include a first offence fine of up to $250,000 and imprisonment of as much as six months, coupled with the potential to be blacklisted from pursuing legal retail options have prompted several to shut down.

For example, the Green Room Society Dispensary on Spadina Avenue in Toronto has white paper covering up the glass windows and door. In the window, written on the paper in black marker it says: “Come say high on April 1st.”

READ MORE: B.C. ‘will be ready’ for marijuana legalization

The Ontario government warned in the days before legalization that black market operators must shut down or risk being barred from ever obtaining a legal retail license under the province’s private system.

Landlords in Ontario also face hefty fines for allowing illicit dispensaries to operate on their properties, putting further pressure on owners to close up shop, said Matt Maurer, a partner at Torkin Manes and vice-chair of the firm’s cannabis law group.

Others across the country have been forcibly compelled by law enforcement to shut their operations down.

In Port Alberni, B.C., the Royal Canadian Mounted Police raided two pot shops on legalization day for not having provincial licenses. A day later, police and inspectors from Newfoundland and Labrador Liquor Corp. raided a dispensary in St. John’s.

There were 92 illegal cannabis storefronts in Toronto on Oct. 16, prior to legalization, according to Bruce Hawkins, a spokesman for the city’s municipal licensing and standards department. That number has been whittled down to 21, as of Nov. 6, due to shutdowns of their own accord or by the city and police, he added.

Maurer has been approached in the year leading up to legalization and afterwards by dispensary owners seeking a license to operate a legitimate cannabis business, as the risk of being an illicit operator is heightened, he said.

Post-legalization, the provincial and territorial governments have a vested interest in shutting illegal pot shops down, he said.

“Every sale at an illegal dispensary is another dollar not going to the provincial government,” Maurer said. “So why would they tolerate that any further?”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

BC ELECTION
B.C. political leaders reflect on rural health care as election looms

NDP leader John Horgan, BC Liberal leader Andrew Wilkinson talk rural health care priorities

COVID-19 test tube. (Contributed)
test tube with the blood test is on the table next to the documents. Positive test for coronavirus covid-19. The concept of fighting a dangerous Chinese disease.
Interior Health launches online booking for COVID-19 tests

Testing is available to anyone with cold, influenza or COVID-19-like symptoms

Mainroad Communications warns of coming weather event.
Mainroad Communications notifies drivers of snowfall event over next 24 hours

It’s that time of year again. A weather event is heading to… Continue reading

Cranbrook's Casey Hanemayer reaches a rating of 1022, jumping up 17 points and becoming the highest ranked player in Canada. Paul Rodgers file.
Cranbrook’s Casey Hanemayer becomes Canada’s highest-rated disc golfer

Cranbrook’s Casey Hanemayer has become Canada’s highest ranked disc golfer, after the… Continue reading

A health-care worker prepares to swab a man at a walk-in COVID-19 test clinic in Montreal North, Sunday, May 10, 2020, as the COVID-19 pandemic continues in Canada and around the world. (THE CANADIAN PRESS/Graham Hughes)
Interior Health records 21 new COVID-19 cases over the weekend

Thirty-six cases remain active; two people are in the hospital, one of whom is in intensive care

FILE – People wait in line at a COVID-19 testing facility in Burnaby, B.C., on Thursday, August 13, 2020. THE CANADIAN PRESS/Darryl Dyck
167 new COVID-19 cases, 1 death recorded as B.C. enters 2nd wave

Three new healthcare outbreaks also announced

Prime Minister Justin Trudeau is seen during a news conference Tuesday October 20, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Trudeau and his family decide against trick-or-treating this year due to COVID

Adhering to local health authorities, Trudeau urges Canadians to do their part in following those guidelines

Surrey RCMP cruisers outside a Newton townhouse Tuesday night. (Photo: Shane MacKichan)
Toddler in hospital, woman dead following stabbings at Surrey townhouse

Police say two-year-old was among victims found at townhouse complex in the 12700-block of 66 Avenue

A Tim Hortons employee hands out coffee from a drive-through window to a customer in Mississauga, Ont., on March 17, 2020. Tim Hortons is ending the practice of double cupping hot drinks, a move the fast food restaurant says will eliminate hundreds of millions of cups from landfills each year. THE CANADIAN PRESS/Nathan Denette
The end of double cupping: Tim Hortons ditches two cups in favour of one with sleeve

Most recycling facilities in Canada don’t recycle single use paper coffee cups because of a plastic lining

Canada’s Chief Public Health Officer doctor Theresa Tam responds to a question during a news conference Tuesday October 20, 2020 in Ottawa. Canada’s chief public health doctor says in the age of social media, fake news about the COVID-19 pandemic has been spreading faster than the virus itself. THE CANADIAN PRESS/Adrian Wyld
VIDEO: Fake news creates serious issues for battling pandemic, chief public health doc says

Both Tam and Prime Minister Justin Trudeau urged Canadians to be responsible about the information they share

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Volunteer registered nurse Stephanie Hamilton recieves a swab from a driver as she works at a Covid-19 testing site in the parking lot at Everett Memorial Stadium on Tuesday, Oct. 20, 2020 in Everett, Washington. (Andy Bronson / The Herald)
13 more COVID-19 cases in Interior Health region

There are 624 cases in the region since the start of the pandemic

This 2020 electron microscope image made available by the National Institute of Allergy and Infectious Diseases shows a Novel Coronavirus SARS-CoV-2 particle isolated from a patient, in a laboratory in Fort Detrick, Md. THE CANADIAN PRESS/AP-NIAID/NIH via AP
At least 49 cases of COVID-19 linked to wedding in Calgary: Alberta Health

McMillan says the city of Calgary has recently seen several outbreaks linked to social gatherings

Most Read