Toronto just can't get rid of illegal cannabis stores

How much would it suck to go through all the trouble of opening a legal weed store, only to have dozens of people do the exact same thing without paying for permits, inspections or meeting any sort of government regulations?

How much would it suck to then watch these people not only get away with their illegal operations, but do so while luring your customers away with cheaper prices?

Probably as much as it would suck to sink years of your life into building a retail cannabis business and then learning that only 25 of such stores could exist in all of Ontario — and that the owners of those stores would be chosen at random.

It's been nearly one month since Doug Ford's PC government allowed the first wave of brick and mortar retail cannabis stores to open across Ontario. Three have launched so far in Toronto, where five licenses were issued in total, but many consumers aren't pleased with consistently long lines and higher (than pre-legalization) prices.

So, like the rest of Canada, Toronto continues to buy black market weed.

Roughly 20 unlicensed dispensary storefronts are still up and running across the city as of April 25, in addition to more than 100 illegal marijuana delivery services.

You can find them all on WeedMaps, a popular online cannabis community that's been listing these types of businesses for adult consumers in North America since 2008.

It's not that police and bylaw enforcement officers can't find these illicit dispensaries — I mean, operators are advertising their locations and menus online for all to see.

The problem is that no level of government can (or will) shut them down for very long.

"Why not?" you ask? Well, it's complicated.

Toronto's director of investigation services for municipal licensing and standards, Mark Sraga, pledged a few weeks ago that enforcement officers would be taking a "zero-tolerance" approach to eliminate all remaining illegal cannabis stores in the city.

"We are starting an aggressive enforcement action [which will continue] for the foreseeable future," he said on April 8. "Currently, our intelligence tells us we have 20 illegal cannabis stores open and operating in the city."

Thanks to the province's Cannabis Control Act, city bylaw officers can act like police when it comes to enforcing some pot-related laws, but not even police can just storm into a dispensary and arrest everyone inside.

"An investigation in order to get a search warrant takes work," says Toronto-based cannabis industry lawyer Harrison Jordan, pointing to potential hindrances such as a lack of police resources or too few complaints from the public.

"It's not like they can just go in and shut them down as they please."

That said, the aforementioned Cannabis Control Act has given cops and enforcement officers alike the power to, as Jordan puts it, "implement the closure of a facility or premises if someone is charged with a cannabis offence in relation to that premises and it is not a residence."

The last bit of that sentence is important as it relates to CAFE — the city's most prominent and perplexingly resilient black market weed chain — which has used this "residence" loophole to continue operating out of at least two of its Toronto locations despite multiple closure notices.

The city called in welders to literally seal the doors and windows of CAFE's Bloor Street location late last week after two consecutive raids, but those same welders were forced to come back and remove the doors after operators complained to police that someone lives in the store's basement.

Over at CAFE's Fort York location — which was raided three times last week — operators are claiming that a bunk bed set up in the store's back room is proof that someone lives there, too.

Attempts to close and block entry to both stores in recent weeks have been met with staff breaking right back in, sometimes within hours, to serve eager, waiting customers.

That's not to say that the law is powerless against these rogue entrepreneurs — again, it's just complicated.

"The laws haven't really been tested, totally," says Ottawa-based litigator Murray Snider. "We have a couple of different laws that interact in this sphere."

First, there's the Criminal Law of Canada, which governs the possession and trafficking of all drugs, not just cannabis.

Snider says that black market pot shop owners could technically be penalized under this law, but it's highly unlikely.

"The federal government and the powers that be have pretty much said that they're not going to be prosecuting these types of offences," says Snider.

"The suggestion is they're not going to be as hard on possession and trafficking cannabis, given that it's been legalized to a certain extent across the nation."

Provincial offences, while not considered as serious, could bring you to court and block you from getting a licence to sell cannabis legally in the future. In some circumstances, they can result in jail time, but they won't go on your criminal record.

"It's not to be looked at lightly," says Jordan of provincial offences in particular. "Although it doesn't go on your permanent record, it's still very serious and can have serious ramifications."

Then, there are all of the municipal bylaws and regulator laws, like the ones discussed mentioned earlier and the AGCO's own policies (which retailers like CAFE don't even have to abide by, as they don't technically have licenses).

Breaking these types of rules can get your store shut down, your inventory snatched and result in some seriously steep fines, but again, none of this will go on your permanent record.

How any store operator is charged — criminally or otherwise — is at the discretion of police, though most in Toronto appear to be getting dinged at the regulatory level.

"Most people who are operating these [illegal businesses] may get hit with regulatory offences, like operating without a licence," says Snider.

"The consequences are not going to be 'let's lock you up and throw away the key'... only in the most significant and egregious of cases are people going to be incarcerated."

The monetary penalties can be large, however, says Snider — though clearly not large enough to deter unlicenced weed retailers who bring in potentially millions of dollars a month tax-free.

The bottom line is that cannabis store owners know they won't be charged with serious crimes, like trafficking, at the federal level, so they continue on despite all of the regulatory fines, headaches and closure notices they receive.

Most experts I've spoken with in recent months agree that the illegal weed market needs to be stamped out. Its very existence is unfair to licensed business owners and unregulated black market weed poses risks to public health.

They also agree that the best way to get rid of the illegal market is by expanding the number of retail cannabis licences in Ontario. Award the licenses based on skill and preparation, not luck, suggests Snider, and regulate all operations above board.

"The AGCO and province should reopen the retail license application, take a merit-based approach when evaluating and awarding licenses, and reconsider its decision to not allow licensed producers to sell directly to consumers," reads a report issued last week by the Ontario Chamber of Commerce.

"The lack of private retail will only encourage the illegal market and reduce potential government revenue through the sale of legal cannabis."

by Lauren O'Neil via blogTO