Canada’s Cannabis Capital Struggles to Tame the Black Market

image of a small leather canadian flag with marijuana nugs sitting next to it

As first reported by The New York Times, in the pot-friendly city of Vancouver, illegal marijuana dispensaries outnumber Starbucks coffeeshops. When Canada legalized recreational marijuana on Oct. 17, one of the central aims was to shut down the thousands of illegal dispensaries and black-market growers dotting the country.

But taming an illegal trade estimated at 5.3 billion Canadian dollars ($4 billion) is proving to be daunting.

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Individual Crusaders

Even though many of the products sold at Weeds, Glass and Gifts are banned under the new law, the retailer's owner, Don Briere, an ebullient 67-year-old and self-styled pot crusader, has no intention of shutting down any of his four Vancouver stores or changing his product lineup.

"We'll keep selling what we are selling," said Briere, who in 2001 was sentenced to four years in prison for being one of British Columbia's most prolific pot producers.

Many Challenges

The Canadian government faces many challenges in stamping out the illegal marijuana industry. For one, there are too many black-market shops like Briere's for the government to keep track of.

And no modern country has undertaken such a drastic legalization effort before. Because of this, some detractors question the government's efficacy.

"The government taking over the cannabis trade is like asking a farmer to build airplanes," Briere declares.

As sluggish provincial bureaucracies struggle to manage a new regulatory system, licenses to operate legally are harder to come by than originally anticipated. This supply disruption gives illegal sellers added impetus to defy the law.

A Canadian Approach to Cracking Down

At the same time, neither the public nor the police have an appetite for a national crackdown.

"It won't happen overnight," says Mike Farnworth, Minister of Public Safety for British Columbia.  "There will be no mass raids," or "guns and head-bashing. It's a very Canadian way of doing things," he added.

Canadian policymakers know that legalization is a giant national undertaking that will take years to be enforced. Farnworth has argued that civic pressure and market forces would help gradually diminish the illegal trade.

Lonely Legal Dispensaries

On Oct. 17, only one legal government pot retailer opened in the city of Kamloops, B.C. nearly a four-hour drive from Vancouver. That assured that the illicit trade would continue to thrive.

On that day, none of the roughly 100 illegal pot dispensaries in the city had the provincial licenses they needed to operate legally, even those that had applied for one.

As cities across Canada grapple with this national experiment, Vancouver offers a striking cautionary tale about the challenges of policing the illegal marijuana trade.

Damage Control

For decades, cannabis has been so embedded in the social fabric of Vancouver that illegal pot shops operated with impunity as so-called "compassion clubs" for those seeking medical marijuana, with police largely turning a blind eye.

But by 2015, City Hall officials were fed up with the proliferation of black-market dispensaries and they passed tough regulations stipulating, among other things, that shops must be about 1,000 feet from schools, community centers, and other outlets.

After dozens of dispensaries brazenly flouted the new rules, the city in 2016 began fining transgressors, issuing 3,729 tickets amounting to more than $3 million in fines. But the dispensaries mostly ignored them; only $184,250 has been paid.

Prohibition Through Legalization?

Next, the city began trying to shut down illegal operators with injunctions.

In March, 53 illegal dispensaries banded together to file a constitutional challenge, saying closing the operators would breach Canada's Charter of Rights and Freedoms by denying medical marijuana cardholders access to medical marijuana they purchased at the black-market stores.

"The City is using legalization to try and impose Prohibition," said Robert Laurie, the lawyer representing the dispensaries.  The case is set to go before British Columbia's Supreme Court.