Illegal dispensaries still operating in Vancouver three years after Cannabis Act became law

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Three years after Canada became the first G20 country to legalize recreational marijuana there are still eight illegal dispensaries operating in Vancouver.

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And the owners of legal retail dispensaries, who pay just under $34,000 a year for a licence in Vancouver, aren’t happy about it.

Harrison Stoker, chief growth officer with the Donnelly Group’s cannabis stores, feels even one illegal store operating is absurd.

“If you and I decided to start a moonshine business and opened it up around the corner in any part of Vancouver, it wouldn’t last 24 hours, the VPD would be on us in a heartbeat,” he said. “We’re talking about a criminal endeavour opening in plain sight.”

Vancouver has 53 fully licensed cannabis dispensaries, said Sarah Hicks, acting chief of licence inspections, with eight operating illegally.

“The illicit market remains an ongoing problem as new illegal cannabis ‘pop-ups’ continue to emerge,” said a report by city staff in Vancouver.

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The Vancouver Police Department focuses its drug-enforcement priorities on organized, sophisticated producers and traffickers of hard drugs such as heroin, fentanyl and crack cocaine, a spokeswoman said.

“The legalization of marijuana has not had a significant impact on day-to-day VPD operations,” Const. Tania Visintin said.

Dissatisfaction isn’t limited to the Lower Mainland: The Okanagan Cannabis Collective sent a letter on Oct. 13 to the ministry of public safety and solicitor general demanding the province crack down on illegal weed shops and calling for Mike Farnworth, the minister in charge, to resign.

“Since cannabis was legalized in 2018, the Minister of PSSG has demonstrated that he is incapable of managing this file,” the letter said.

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Provincial officers from the Community Safety Unit (CSU) have seized cannabis worth an estimated $20 million from more than 70 inspections, collected $1.2 million in fines, and shut down 173 unlicensed retailers, a ministry spokesman said on Friday.

The Cannabis Act became law on Oct. 17, 2018 but there are still a lot of bugs to work out, according to those in the industry.

“I’d say we’ve moved an inch when we should have moved a mile,” said Stoker.

A licence for a retail cannabis dispensary in Vancouver will decrease to $13,500 next year and to $5,000 in 2022, after council debated and approved the measure on Oct. 5. The licence fee raised $1.6 million in the past fiscal year.

By comparison, ordinary retail outlets in Vancouver pay from $155 to $286 a year for a business licence, liquor stores $429, and a large grocery (50,000 square feet) $4,595, according to the report by city staff .

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Comparing retail licence fees for cannabis in other Lower Mainland municipalities, New Westminster comes in at the opposite end of the spectrum from Vancouver, charging $2,684 a year, the report said.

Heading out of province, in Toronto there is no cost for a retail licence fee for pot shops because the Ontario government shares the excise revenue with municipalities.

In B.C., the public might be interested to learn the province doesn’t do the same, Stoker said.

“It doesn’t really make it into the newspapers, but I’d say that the greater business community, and just constituents at large, would be pretty surprised to hear the province is not sharing excise revenues with cities to enable them to handle all these files properly,” he said.

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Besides raising tax revenue that use to disappear into the black market in the past, the Cannabis Act was designed to, if not remove entirely, severely marginalize the illicit market.

Other issues facing licensed cannabis retailers include competing with illicit mail-order companies and not being able to use third-party delivery services because it’s illegal to deliver cannabis unless the vehicle used is owned or leased by the retail outlet.

What to make of the bowl of spaghetti that are the rules set down federally by Health Canada, to be interpreted and implemented by provincial and municipal jurisdictions?

“I’d say we’re still kind of where we were three years ago,” Stoker said. “Not really too much has changed, apart from the fact that everybody in cannabis retail probably has just a little more clarity on how to interpret regulatory framework and policy, having gone through it now for three years.

“That being said, there’s still a lot of fuzzy lines and a lot of things that are not clear.”

gordmcintyre@postmedia.com

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