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Canada’s pot industry calling on Ottawa to stop rise of illegal stores

A trade group representing most of Canada's licensed marijuana growers is calling on the federal government to curb the ongoing surge in illegal pot shops, which began in Vancouver and has now spread to Toronto.

Reacting to news that Canada's largest city now has 40 dispensaries and could see more than 100 by this spring, the Canadian Medical Cannabis Industry Association is asking Ottawa to stop the rise of illegal marijuana stores, which operate outside the strict regulations that its commercial-scale producers must respect.

"The federal government needs to step in and tell everybody what are the freaking rules," association spokesman Cam Battley told The Globe and Mail on Thursday.

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"Is it legal or is it not? And if it is, can we stop following the regulations that we're under for quality control and proper labelling? Can we start using the same pesticides that the dispensaries' grow-ops use?"

The face-to-face sale of cannabis products is illegal because these stores procure and sell their products outside Health Canada's licensed medical-marijuana system. That system was overhauled in 2014 and now allows about 20 industrial-scale growers to mail their products directly to patients who have doctors' prescriptions.

Until now, the growth of dispensaries has generally been concentrated in Vancouver and Victoria, where they have flourished as local governments and police have decided regulating – not raiding – is the best way to deal with them.

Last week, rookie MP Bill Blair, a former Toronto police chief, was tapped to oversee a federal-provincial task force that will create a framework for legalizing and regulating the recreational use of the drug. He told The Globe this week that the eventual system will involve "a strict regulatory regime" that ensures cannabis products are unadulterated. Experts predict it could take up to two years before recreational use of the drug is legal.

Ian McLeod, a spokesman for the federal Department of Justice, said it is too early to comment on timelines, but until cannabis is legalized, local authorities "must be able to make their own decisions about local enforcement priorities."

"[Dispensaries] sell untested products that may be unsafe and of particular risk to kids," he said in an e-mailed statement. "They are supplied by illegal growers.

"These are exactly the concerns that the government's plans will address."

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Meanwhile, the lack of clear regulations and enforcement perpetuates the unfair playing field for the licensed producers, who have sunk millions of dollars into the highly secure growing facilities and quality-control processes mandated by Health Canada's medical-marijuana regime, Mr. Battley argued.

"All of the licensed producers are startup companies," said Mr. Battley, who is also head of communications for Canada's largest grower, Canopy Growth Corp. "Not a single one is fully cash-flow positive – not one – so there's no such thing as Big Weed."

There are roughly 500,000 medical-cannabis users in Canada over the age of 25, according to a survey commissioned by Health Canada. Less than 24,000 people were registered under the federal government's mail-order medical pot system at the end of last June.

That means, for now, illegal dispensaries and compassion clubs are likely supplying between 100,000 and 200,000 patients, while a remaining 300,000 or so people continue to turn to the black market, cannabis consultant Eric Nash told The Globe late last year.

Dispensary owners should "spend the money and the time to get in front of the government, make their case, get regulated and become legitimate players," Mr. Battley said. "Then, they'll be welcomed by many people."

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About the Author
News reporter

Mike Hager is a general assignment reporter at the newspaper’s B.C. bureau. He grew up in Vancouver and graduated from the University of Western Ontario’s Huron College and Langara College. Before joining The Globe and Mail, he spent three years working for The Vancouver Sun. More

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