Legal Retail Cannabis Stores in Canada on an Unlevel Playing Field

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Imagine if your retail cannabis license was approved and you built and staffed your store and opened your doors for business. Then, you found out how many bricks-and-mortar and online cannabis stores are operating illegally and with seeming impunity. We hear what you’re thinking and you’re right, it’s not fair. While the playing field is not yet level, Canadian cities are beginning to crack down: medical cannabis licenses are being revoked and illegal “dispensaries” are being shut down.

How Did Retail Cannabis in Canada Become Such a Mess?

Medical retail cannabis has been legal in Canada since July 30, 2001, but medical retailers don’t always play by the rules. One common example of medical retailer’s rule bending is selling cannabis without requiring the consumer to show proof of authorization (medical cannabis card). It nearly goes without saying that these medical dispensaries are also selling medical marijuana to recreational cannabis users. In Canada, you currently need a provincial retail cannabis license to sell recreational cannabis. News reports suggest that many illegal dispensaries closed their doors after legalization and pivoted to the world of mail-order cannabis and to-your-door cannabis delivery services.

Things became greyer when Canada’s Cannabis Act loomed on the horizon and after the Act was passed. The legalization of recreational cannabis seemed to make some illegal retailers (storefronts and online stores) feel immune from prosecution. There are tens of illegal online cannabis stores in Canada. These online stores masquerade as “medical cannabis dispensaries” when in fact they don’t ask for a medical card or confirmation of legal age (other than an honour system where they ask if you’re of legal age and you check either “Yes” or “No”). Most black market cannabis websites also sell Health Canada prohibited cannabis products such as cannabis concentrates or “shatter” as it’s known by users, cannabis candy and other forms of edible cannabis.

Where Are We Now?

Slowly, bricks-and-mortar dispensaries operating without a retail cannabis license in Canada are being raided and forced to close. In 2016, the City of Vancouver filed BC Supreme Court injunctions to close 53 illegal cannabis retailers in the city. Many have since shut down. In late 2018, there were still approximately 20 illegal cannabis retailers operating in Vancouver. In December 2018, City of Vancouver was granted injunctions by the BC Supreme Court to close 9 illegal retail cannabis stores. The operators attempted to have the injunction stayed, but it was upheld by the BC Court of Appeal in June of 2019. Of the 20 illegal stores that were operating last year, about half remain open, although the City of Vancouver is preparing to act.

Cannabis stores in Canada operating without a retail cannabis license aren’t restricted to the West. In July 2019, CBC News reported that the City of Toronto is gearing up to close the last dozen remaining illegal cannabis dispensaries operating in the city. Pre-legalization, the city’s licensing department counted over 90 illegal dispensaries.

Until more legal retailers open their doors and help meet the demand for recreational cannabis, black market retailers will flourish. It seems, though, that the hey-day of illegal recreational sales is slowly coming to an end. This is good news for legal retail cannabis license applicants in Canada.

Apply for a Retail Cannabis License in Canada

If you’re considering applying for retail cannabis license in Canada, speak to our experts at Thrive Liquor & Cannabis Advisors to learn more about our consulting services. Our cannabis license consultants provide insight and guidance that will increase the chances of license approval. Our services don’t stop at licensing. Once your license is approved, we can help your business remain compliant by implementing policies, procedures and training manuals that safeguard your license.

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