Pot delivery services could be 'cockroaches' of marijuana legalization, experts say

Some say so-called grey market will bloom while legal businesses suffer under strict legalization

Marijuana businesses are growing in size and scope as Canada moves toward legalization of recreational pot, creating an increasingly daunting job for those tasked with enforcing the rules.

In Vancouver's bustling downtown, sleek, modern posters with fashionable fonts and simple images are plastered on lamp posts. It's not until you take a closer look that you spot the rolled joints inside a sandwich or buds among a plate of broccoli.

"Weed delivery. Simplified,'' the posters read.

Once an underground industry, marijuana delivery services are now advertising publicly, joining unlicensed retail stores and online shops as cannabis businesses openly skirting the existing law.

Officials have tried to shut them down, but efforts haven't always been effective and whether enforcement will fare any differently post legalization remains hazy.

It's still illegal for anyone to possess, produce, import, export, or transport marijuana until federal legislation is enacted.

"Although these online (and) storefront dispensaries are essentially trafficking controlled substances, there is not enough manpower and time to conduct these investigations due to the sheer number of these operations,'' Vancouver Police Const. Jason Doucette said in an email.

"Police resources are very limited in terms of investigating cannabis offences, among the other workload that members have been given.''

Doucette said it would be inappropriate to comment on the force's role post legalization, but he noted that officers "will be able to deal with public safety issues that arise.''

The federal government has pledged to legalize recreational marijuana later this year and the Senate is set to hold a final vote on the legislation, known as Bill C-45, by June 7. Provinces and territories have been left to come up with their own regulations to control distribution and sales.

B.C.'s Ministry of Public Safety is hiring a "director of cannabis control'' and a "community safety unit'' to enforce new provincial legislation, although exact roles are still being determined.

Under the new rules, cannabis enforcement officers will be able to enter illegal retail operations without a warrant to seize product and records.

In B.C., the maximum punishment for selling pot outside of the provincial framework will be a $100,000 fine and 12 months in jail.

Post legalization, marijuana shops will need licences from both the municipality and the province to operate.

Vancouver is one of the few cities in Canada that already has regulations in place, after creating a bylaw to license medical marijuana shops in 2015.

Business licenses have now been handed out to 19 retailers, including four to so-called "compassion clubs'' — non-profits that provide medical pot to patients in need — and dozens of other outlets are working their way through the licensing process.

Landlords leasing space to illegal outlets are given zoning violation orders, while bylaw officers routinely issue $1,000 tickets to unlicensed shops — although data from the city shows less than 15 per cent of those have been paid.

Vancouver is also asking the B.C. Supreme Court to shut down 53 pot shops that continue to operate without a licence. That case is set to be heard in September.

A statement from the city says enforcement against illegal operators will be "enhanced'' post legalization, but no details have been provided on what the city's role will be.

Grey market will bloom: experts

Some in the industry predict the so-called grey market will continue to flourish once recreational marijuana is legalized, saying the rules don't allow regulated businesses to fulfil demand.

Direct delivery and online distribution in particular are likely to continue operating on the edges of the law, said Ian Dawkins, acting president of the Cannabis Commerce Association of Canada.

"They are like the cockroaches of this biosphere. You will never destroy a dude on his bicycle with a cellphone delivering weed,'' he said.

Fines and court injunctions won't be effective, Dawkins added, and the grey market will continue providing consumers across the country with the variety and availability of product they've come to expect.

"If you're a law-abiding citizen and you go to the Ontario cannabis store and there's nothing on the shelves, you pretty much feel entitled to dial up your guy. That's pretty much the end of enforcement at that point.''

The market for marijuana products has evolved quickly, said the owner of one Vancouver-based online cannabis shop who asked not to be named.

His store, Westculture, sells everything from edibles and dried cannabis flowers to weed-infused bath bombs and dog treats. Many of the products still wouldn't be available at licensed retailers after legalization.

People want things like edibles and vape pens because they offer a discrete way to consume cannabis and government regulations won't fill that demand, he said.

The man knows his business doesn't fully comply with either the current or coming legislation, but he has no plans to shut down because he wants to push for rules that allow greater access to a wider variety of products.

Governments are "setting themselves up for a lot of competition from the grey market,'' he said.

Read more Canada news at CBC

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