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Neev Tapiero is the owner of Cannabis As Living Medicine, Toronto’s oldest dispensary.Della Rollins/The Globe and Mail

After the battering ram smashed through the front door, the officers quickly rounded up everyone and handcuffed them inside the small shop at Yonge and Wellesley.

The customers were soon let go, but Neev Tapiero, the owner of Cannabis As Living Medicine (CALM), Toronto's oldest dispensary, was held under arrest for three hours and charged with drug trafficking as part of a one-day crackdown on 43 pot shops last May. Federal drug prosecutors have since stayed or withdrawn charges on 36 of the people nabbed in the citywide sweep while another 10 still face trial for selling marijuana outside Ottawa's mail-order system for registered medical cannabis patients.

It was the third time Mr. Tapiero had been arrested and charged with trafficking since opening CALM in 1995, which the Ryerson arts undergrad and two friends began as a tiny operation offering cannabis to people suffering from HIV, multiple sclerosis, arthritis and spinal cord injuries.

Read more: Inside Calgary's marijuana debate

In order to avoid further police scrutiny, CALM now operates from a secret downtown location. New members must be referred by current clients and forward their medical documents before entering the premises, as well as agree to a list of 18 rules that include: not using their cellphone on site, not smoking cannabis within a two-block radius of the dispensary and visiting only once a day.

"It's in the rules not to tell people where the address is," said Mr. Tapiero, his bare feet clad in Birkenstocks when The Globe and Mail visited CALM on a near-freezing afternoon late last month.

A siege-like atmosphere pervades dispensaries still in operation as they contend with security threats from groups of armed thieves, as well as the city's arsenal of tactics, which includes sending threatening letters to the landlords of the shops and restricting the activities of owners of these dispensaries through bail conditions imposed after raids.

In and around Kensington Market, the largest hub in Toronto, visitors to the handful of remaining pot shops are buzzed in through frosted doors and greeted by imposing security guards. Staff and management deny requests for an interview.

While their counterparts in Vancouver say targeting all illegal pot shops is a waste of taxpayer money, Toronto police are vowing to continue enforcing existing federal drug laws on the city's several dozen remaining dispensaries in the lead-up to legalization, which could happen as early as next summer.

The federal cannabis legislation unveiled last week left the question of where cannabis may be sold entirely up to provinces and municipalities. This could mean, like alcohol sales, consumers across Canada could have vastly different ways of buying recreational marijuana.

A federal task force report informing the government's legalization push recommended against selling the drug in liquor stores, noting concerns that mixing alcohol and marijuana leads to higher levels of intoxication. But politicians in British Columbia, Manitoba and Ontario floated the idea of selling cannabis at such government-run outlets and have voiced their displeasure with the scofflaws running pot shops in their provinces.

Canada's several hundred dispensaries all operate outside the federal government's medical-marijuana program, which permits about 40 industrial-scale growers to sell dried flowers and bottles of cannabis oil directly to patients through the mail.

Long-time operators such as Mr. Tapiero say if Ottawa truly wants to eliminate as much of the black market as possible through legalization, dispensaries should be given a "fair kick at the can" to become legal retailers.

"I want to make a legitimate wholehearted effort to be part of a legitimate system," he says.

Some dispensary operators aren't taking their chances in case those currently running afoul of the law are prohibited from joining any eventual licensed distribution network.

Christine Duhaime, a lawyer and expert on money laundering, said five Canadian dispensary owners have contacted her since the bill was unveiled last week asking for help undergoing a "corporate reinvention," whereby directors and officers in their company would be replaced by others without criminal records or histories likely to draw the attention of regulators.

"If there is an issue with your people, you can preserve the assets of your company, then you reincorporate, take the asset, sell it with new directors and officers," said Ms. Duhaime, adding online gambling companies completed similar overhauls as provinces moved to regulate that industry. "So you are, in effect, a new group with different people with the same stores and the same assets.

"You're doing a culture change at the same time – I don't view that as shady at all – that's in fact a good way to go."

Dana Larsen, an activist who has spent the past two decades crisscrossing the country campaigning for legalization, says as long as storefront sales remain illegal for independent entrepreneurs these dispensary operators will find a way to sell their products.

Mr. Larsen, whose two long-standing dispensaries are trying to become licensed under the City of Vancouver's new bylaw, said many pot shops already offer online shopping – a much cheaper, less risky option than a bricks-and-mortar location. He said he helped create Bud Buddy, one of Canada's most prominent online retailers, more than a decade ago, but no longer has any affiliation to the site, despite Web registration details linking to his family.

The only way to eliminate the majority of the black market, he contents, is to sell legal cannabis for as low as $3 a gram, roughly a third of what people are paying now at illegal pot shops and many of the licensed medical marijuana growers.

Don Briere, who runs Weeds Glass and Gifts, one of Canada's biggest chains of illegal dispensaries, said he is close to reopening seven of his franchises shut down in Toronto after either raids or pressure on landlords. He said he is intent on filing a Charter challenge protesting the police action against his stores, which he figures will give him an injunction to operate Weeds freely in the city while the case winds its way through the courts.

Kirk Tousaw, a B.C.-based lawyer who won a Federal Court case last year that overhauled Ottawa's medical marijuana rules, said one of his Toronto dispensary clients – Phytos Apothecary and Wellness Centre – has already filed a Charter challenge and, if it wants to, could likely receive a court injunction allowing it to stay open because Canada's current mail-order medical marijuana system does not provide reasonable access to pot.

Mr. Tousaw predicts that the more restrictive a province's approach to selling alcohol, the more restrictive the eventual legal sale of cannabis will be.

"The alcohol industry is still battling stupid rules 100 years after their Prohibition ended," he said. "So I'd imagine we'll be battling stupid rules for some time to come in the cannabis sector, but we should learn from some of these mistakes.

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