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Rosy Mondin, a lawyer and executive director for the Cannabis Trade Alliance of Canada, says Liberal MP Bill Blair seemed ‘engaged and interested’ during their conversation last month on licensing dispensaries and their small-scale growers.

John Lehmann/The Globe and Mail

Bill Blair, the federal government's lead on legalizing marijuana, has been quietly meeting with advocates for the illegal pot shops springing up across the country, hearing their arguments for how regulating the sector could help eliminate the black market.

Mr. Blair blasted dispensary operators at a recent conference as reckless profiteers "who don't care about the law, who don't care about regulations, don't care about kids, they don't care about communities, they don't care about health of Canadians." But days later, the Liberal MP and former Toronto Police chief held a series of informal "behind the scenes" talks at the the party's convention in Winnipeg, according to Rosy Mondin, a Vancouver lawyer who recently co-founded the non-profit Cannabis Trade Alliance of Canada, which represents legal and illegal marijuana business owners.

Ms. Mondin said he appeared "engaged and interested" as she made the case for the Liberal government to license private cannabis dispensaries and their small-scale growers.

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Earlier this month, Mr. Blair invited Ms. Mondin to meet again in Ottawa and asked her who should be interviewed by a federal-provincial task force that is to report back later this year with draft regulations on recreational cannabis sales.

Ms. Mondin's organization – which includes cannabis growers licensed under the old medical marijuana system, as well as dispensaries – has formally lobbied nine MPs in the past month and wants to be part of Mr. Blair's upcoming panel.

"We just want [the government] to put out good rules that will help the industry overall, not one particular segment," she said.

Ms. Mondin and Mr. Blair were joined earlier this month by B.C.-based lawyers Kirk Tousaw and John Conroy, both long-time counsel for dispensaries and the leaders of a team that won a constitutional challenge forcing Health Canada to overhaul its medical marijuana rules by the end of summer.

"The whole objective is to make sure you don't have a black market," Mr. Conroy said.

Mr. Blair would not confirm or deny that these conversations took place or his government's stance on regulating dispensaries. His spokesman, Michael Davis, said in an e-mailed statement that he has "been listening to as many different points of view on this file as possible, and will continue to do so."

These meetings are the first signal that the Liberal government is open to a discussion on dispensaries, several hundred of which operate outside of Health Canada's mail-order system for medical cannabis. The government is attempting to craft a strict set of regulations aimed at stopping the "billions upon billions of dollars flowing into the pockets of organized crime, street gangs and gun-runners," Prime Minister Justin Trudeau said recently, as well as prohibiting minors from accessing the drug.

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Ms. Mondin's group recently published a position paper advocating that Ottawa create different licensing and security requirements for a range of cannabis businesses, including seed and clone nurseries, commercial growers both large and small, oil and extract processors, cannabis wholesalers and dispensaries.

The paper argues that once all of these illegal industries are participating in a regulated market, the government has more leverage to tightly control them and stamp out objectionable activity. In passing its landmark pot-shop bylaw last spring, the City of Vancouver was able to exact concessions from dispensaries, such as eliminating the sale of edibles.

"There is another industry and it's not all horrible and it's not all evil," said Ms. Mondin, whose Twitter profile picture shows her with Mr. Trudeau. "It is people who want to work in the regulated environment."

That more than 1,500 aspiring growers applied to become licensed under Health Canada's two-year-old medical marijuana system – only about two dozen have so far been successful – is evidence of this desire, she said.

Mr. Conroy said he and Mr. Blair discussed the possibility of dispensaries operating with a licensed pharmacist inside the store doling out cannabis. Both Mr. Conroy and Ms. Mondin say they stressed to him the importance of keeping recreational marijuana out of liquor stores, an idea being pushed by Ontario Premier Kathleen Wynne and other provincial politicians.

Under the previous tough-on-crime Conservative government, some licensed producers repeatedly urged Ottawa to crack down on illegal pot shops, while many in the unregulated sector claimed those running the legal cannabis businesses had undue influence. Since the Liberals swept to power in last year's federal election promising to legalize the drug, members on both sides of the law have struck a more conciliatory tone, advocating for storefront sales of cannabis products from licensed growers.

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John Fowler, president of Ontario-based licensed producer Supreme Pharmaceuticals, said it's a positive sign that Mr. Blair is seeking such a wide range of opinions, noting that a greater portion of the black market will be eliminated the more inclusive the law becomes.

"If you can't beat 'em, join 'em," Mr. Fowler said. "You see certain legal operators being very upset by black market participants; you see the inverse as well just as clearly.

"The most important thing someone who is in the cannabis industry can do – regardless of what sector that is today – is to look to work with the government," he said.

Dieter MacPherson, president of the Canadian Association of Medical Cannabis Dispensaries, a trade association representing 45 pot stores across the country, called Mr. Blair's meetings heartening, but cautioned that it "is only a first step" in ensuring the government doesn't shut illegal businesses out of the new recreational market.

"With many decades of experience, the people that are most qualified to understand the nuances of how to distribute and manage this plant exist within the dispensary industry," he said.

Mr. MacPherson estimates some 250,000 to 300,000 Canadians are currently accessing dispensaries, a number that dwarfs the 60,000 patients who have prescriptions under Health Canada's medical cannabis regime. Various estimates peg the value of the country's eventual recreational market at upward of $5-billion, if the black market can be severely restricted.

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Editor's note: In a previous version of this story, Rosy Mondin was quoted as saying MP Bill Blair asked her which illegal cannabis dispensaries and marijuana growers should be contacted as part of his government's work on the issue of legalization. Ms. Mondin says Mr. Bair asked for suggestions of people an upcoming panel should interview, but didn't specifically ask to talk to dispensary operators or growers.

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