When Edward Kim’s boss decided to open Sticky Nuggz, a licensed cannabis store in downtown Toronto, he chose a street that had already proven lucrative by an illicit dispensary called CAFÉ—it was reportedly raking in between $30,000 to $50,000 each day.
In fact, there’s a good chance it’s still bringing in that much money. To the surprise of store manager Edward Kim, the shop is still open. After multiple queries to police and local authorities, Kim was told that in addition to the property’s landlord facing 80 charges under Ontario’s Cannabis Control Act, CAFÉ’s owner is facing 38 charges and several employees are facing another 271.
“These charges are before the courts,” wrote the city’s Municipal Licensing and Standards district manager, Pat Burke, in an email to Kim. “We are confident the charges issued will result in convictions, and our prosecutors will request the courts impose significant penalties to finally shut the four CAFE locations down.”
Kim isn’t convinced.
“Isn’t it in their best interest to shut these guys down and to help us out?” he says. “We've been bleeding out money since 2018.”
While authorities have been successful shuttering many of the illicit storefronts across the country, illicit cannabis sellers haven’t disappeared post-legalization. In fact, they may have grown, provoking some activists and experts to wonder if policing, which unfairly targeted people of colour pre-legalization, continues to be biased.
Detective Inspector Jim Walker, deputy director of the central Organized Crime Enforcement Bureau at the Ontario Provincial Police (OPP), says that as police investigated illegal storefronts in recent years, they were gathering intelligence on where the supply of products were coming from. Now, they’re going after those suppliers.
Between July and Oct. 15 of this year, Walker and his colleagues have laid 327 federal Cannabis Act and Criminal Code charges related to illicit cannabis grow-ops. In that time, the OPP has raided 52 large-scale grows, seizing more than 122,000 cannabis plants — 7000 from one site alone — totalling approximately $143 million in value. Even though Statistics Canada says their data shows the illicit market has shrunk significantly since legalization, Walker says that’s not what he’s seeing on the street.
“The demand, with legalization, means more people are using,” he says. “So we're seeing an increase in those criminal elements that are looking to profit on that.”
A major area of concern for police is the legal medical cannabis personal growing program run by Health Canada that started long before recreational cannabis legalization. Registration in the program has grown significantly, and some designated growers are producing far more cannabis than registered medical cannabis consumers need, they say. The product is diverted to the illicit market in Canada and over the border to the U.S., where even though many states have legal cannabis, it’s still federally illegal.
"The OPP's report confirms what we speculated in April, which is that organized crime has weaseled its way into the permit process," says David Clement, the North American affairs manager at the Consumer Choice Center. Through Access to Information Requests, Clement found that the personal and designated cannabis growing program produces 2.5 to 4.5 times more weed than what is produced by licensed cannabis producers. “Unfortunately that excess cannabis is being diverted into the illegal market.”
According to the RCMP, half of the national high-threat organized crime groups are involved in the illicit cannabis market, many of which supply international markets where weed is still illegal.
In September, the RCMP and OPP joined forces with U.S. Homeland Security, executed six search warrants in Ontario and Quebec and discovered 800 illicit cannabis plants, 400 grams of suspected cocaine and 18 firearms. Police believe one of the groups used a Jet Ranger helicopter to fly product over the border at low altitudes to evade detection.
The RCMP and OPP executed six search warrants and discovered 800 illicit cannabis plants, 400 grams of suspected cocaine, and 18 firearms.
And in August, Ontario and B.C. police executed 26 search warrants in both provinces at multiple medical grow sites and say they found more than 100,000 illicit cannabis plants; nearly 2000 pounds of dried bud; 21 pounds of illicit shatter; two ounces of cocaine, three pounds of illicit cannabis hash, 22 pounds of illicit oil and hundreds of illicit vape pens. They also seized six firearms, $2.5 million in Canadian cash, $580,828 in U.S. currency and $379,383 in Chinese and South Korean dollars. Six have been charged.
But restricting personal medical growing is not the answer, says Clement. The majority of registered medical growers aren’t selling excess to the illicit market.
"Doing so would violate their constitutional rights, and would be exceptionally cruel given how marginalized this group has historically been,” he says. “Rather than trying to arrest their way out of the problem, the government should focus on transitioning permit holder growers into the legal market.”
The Canadian government says its data, based on self-reported surveys, shows spending on illicit cannabis has fallen to a new low $784 million, and there are no plans to change the medical growing program. But in addition to concerns that in actuality, weed legalization has grown the illicit cannabis market, experts at Cannabis Amnesty say prohibition was rooted in racism, and how racist police practices could still unfairly target people of colour.
At a recent town hall, sociologist Akwasi Owusu-Bempah presented the Ontario Human Rights Commission’s recent report showing that in Toronto, Black people are more likely to be arrested, charged and over-charged by police. They are also more likely to be struck, shot or killed by police. While there isn’t official police data collected, he also noted that in Toronto, between 2003 and 2013, the Toronto Star found that Black people accounted for 25 per cent of cannabis possession arrests even though they made up just eight per cent of the population and use cannabis just as frequently as white people. Annamaria Enenajor, Cannabis Amnesty’s executive director, notes that if you were Indigenous in Vancouver in 2017—the year before legalization—you were seven times more likely to be arrested for cannabis possession.
If you were Indigenous in Vancouver in 2017, the year before legalization, you were 7X more likely to be arrested for cannabis possession.
Could a racist war on drugs be raging on post-legalization, just with new rules? Cannabis convictions and criminal records can be barriers to education, housing, travel, volunteering, and working jobs, including those in the legal cannabis industry, which could partially account for the overwhelmingly white presence in the industry.
But charges also have less obvious consequences.
“The child welfare system became one of the major downfalls of many families that have broken up because of the criminalization of cannabis,” according to Chief Isadore Day. “We have dealt with the over-representation of not just folks in the penal system, but those in the child welfare system. Many, many families were broken up.”
He also says that the Cannabis Act should include First Nations jurisdiction when it comes to sales and distribution because First Nations lands fall under federal, not provincial laws.
“For us, in every province, First Nation people are still outside of the recognized legalized cannabis in Canada, which in our eyes as First Nations, we don't see ourselves as being illegal,” he says.
Hopefully, these are some of the issues that will arise this year’s Canadian Chamber of Commerce National Cannabis Working Group’s industry-led review of the Cannabis Act.
“Through this review, the industry will provide thorough recommendations to the federal government about what changes are needed so industry can better compete with the illegal market, create more jobs, and maintain Canada’s leadership in global markets,” says Ryan Greer, senior director of cannabis policy at the Chamber.
In the meantime, Edward Kim can’t believe unlicensed store CAFÉ is still open, business as usual for the holidays. But he also understands that there could be more pressing priorities for the criminal justice system, and that the Canadian government will need to deal with the problems that have been created out of legalization.
But while he doesn’t think it’s fair that licensed stores have to pay high fees to comply with strict rules and red tape, it could also be that criminalizing unlicensed cannabis at all isn’t the answer: When one organization falls, another will surely emerge.
“I think we should focus on other drugs or minors or some terrible stuff like guns,” says Kim. “Weed is just weed. And if they shut down one guy, there's another co-op that will jump right in.”