When we starve for cannabis in weed deserts, the illicit market will feast

When Jason Krulicki decided to open his second One Plant cannabis store in the Greater Toronto Area, he took a different approach to choosing its location from the first, which is nestled among a cluster of stores in bustling Kensington Market.
This time, he looked far beyond downtown, all the way to Dufferin and Steeles — the city limits.
“I really liked that location because it's actually right on the border of a place where they had opted out of [legal cannabis retail],” he says. “To be across Steeles Avenue from Vaughan, I thought, was a huge win for the location.”
In the months leading up to weed legalization, Ontario municipalities could opt out entirely from the concept, meaning no legal weed stores would open in those areas, at least not yet. Since it would be impossible to opt out after opting in, some councils decided to at least not move ahead with stores until legalization and its impacts played out in other jurisdictions.
As of May in Ontario alone, 68 municipalities were still opt-outs according to the Alcohol and Gaming Commission of Ontario (AGCO) — some in dense, populated areas like Vaughan (pop. 323,281), Markham (pop. 342,970) and suburban mammoth Mississauga (pop. 721,599).
Two-and-a-half years after legalization, at least two million Ontarians don’t have a cannabis store within their township or city, creating vast “weed deserts,” as they’re often called. And they’re not unique to Ontario. Citing a lack of available commercial space, White City, a suburb outside of Regina, was the only town to opt out of cannabis retail in Saskatchewan. Six communities in Manitoba — two of which with a strong connection to alcohol prohibition — voted against cannabis retail. And in British Columbia, arguably Canada’s legacy cannabis epicentre, 12 municipalities including Abbotsford, Surrey and Burnaby haven’t permitted legal cannabis retail.
On any given day during the pandemic since they opened on March 21, Krulicki says anywhere from 50 to 75 per cent of the store’s delivery requests come from Vaughan. While he concedes that delivery is not a hugely profitable enterprise, he thinks it makes people familiar with the brand and begin to create some loyalty to the store while also eating into the illicit market, especially with innovative products like drinks and concentrates.
But he also acknowledges that the illicit market is fierce competition, and it can be annoying to see the pages and pages of illicit delivery services listed online, also hoping to serve customers living in deserts.
In November, Peel Police held a press conference to announce they had arrested 88 suspected members of the Mississauga and Brampton-based New Money So Sick gang, who they believed were connected to activities like money laundering, human trafficking, and several homicides.
“This organization has been linked to some of the most thoughtless violence our community has suffered for the last several years,” Peel Regional Police Chief Nish Duraiappah said. Police laid more than 300 charges, alleging that the gang was responsible for the 2019 shooting death of 17-year-old Anthony Davis, who was reportedly watching the gang shoot a music video a rival gang pulled up and sprayed approximately 140 rounds. They said the gang was suspected to beinvolved in the shooting murder of 28-year-old Giovanni Delahaye, who was sitting at a red light near Hwy. 410 and Derry Rd. in Mississauga in October of 2019.
And then there was the shooting death of 25-year-old Abdifatah Salah, killed at a townhouse complex in 2019. Police have not shared a potential motive, but noted that Salah was a loyal customer to the gang’s alleged mobile cannabis operation, Sickspensary. Investigators say search warrants led to them seizing 34 firearms, almost $1.4 million cash and more than $1.9 million worth of drugs, including 1.4 kg of fentanyl, 13.7 kg of cocaine, 1.2 kg of crack and 187 kg of cannabis.
“It is the investigators’ belief that the victim’s association with Sickspensary was a factor in his murder,” said Superintendent Martin Ottaway, leaving a lot to the imagination.
While buying from most illicit services likely won’t get you killed, it’s hard not to wonder how Mississauga’s opting out of legal cannabis could mean that while most of the rest of the country’s illicit cannabis market is shrinking according to Statistics Canada, weed deserts could be trending in the other direction — and what the actual impacts of some of that activity can be.
This past spring, Peel Police presented a report on cannabis, which was requested by town council, to the police services board. Brampton, which opted into legal weed, is now home to several cannabis shops which serve the community and Mississauga, the weed desert next door. They also counted at least 100 cannabis illicit mobile delivery services serving the desert, some of which were former bricks-and-mortar dispensaries that had been shuttered by police (at a cost of about $15,000 per shop, according to the report).
“... a potential buyer will access a website such as weedmaps.com and select a location,” the report explains. “However, upon arrival there is no dispensary, just a seller using a vehicle. Commonly known as a ‘Pop Up,’ the seller will wait at this location until he observes a number of clients arrive and then sell to these clients relatively quickly before leaving the area.”
While it’s hardly an alluring shopping experience, Mississauga Mayor Bonnie Crombie and town council aren’t underestimating the potential issue, and have agreed to debate opting in again in June. But she has maintained that their concerns about the Ontario legislation are valid — that mandating that stores be a certain distance from schools was a good start, but should include more types of congregate settings like daycares, parks and even bus stops. They also wouldn’t have control over how many stores could cluster in some popular areas, a pattern in some neighbourhoods in cities like Toronto and Hamilton.
Alex Krause, communications director for Canada’s chapter of the National Organization for the Reform of Marijuana Laws (NORML Canada), said deserts could actually be harmful.
“It is clear that opt-out/’weed desert’ zones have resulted in two separate negative consequences,” he said. “It incentivizes illicit market activity in these zones, and also puts pressure on adjacent jurisdictions for more retail stores than they can realistically/sustainably support, which creates ‘clusters’ that may be counter to success of small business entrepreneurs setting up shop in these areas.”
Further, the presence of clusters or any legal cannabis retail has not shown to have negative effects or produce negative incidents in neighbourhoods, he said.
For Michael LeBlanc, a consultant to the Retail Council of Canada said it’s okay that Mississauga and other deserts waited to see what those potential impacts could be, and that they would be happy to sit down with town council to educate and negotiate through some of their concerns about cannabis stores.
“You know, they certainly weren't first in the game, but you know, the old saying: the best time to plant a tree was 20 years ago, the next best time was today,” he said. “Listen, it's never too late. You're not going to hear our retail cannabis retailers, say, you know, ‘I'm not coming there. Because you waited too long.’”
One Plant’s Jason Krulicki knows more competition is planning to cluster near his spot in North York — it’s already mapped on the AGCO website. But he’s confident his store can survive, whether Vaughan opts in or not.
“I think having a bunch of good legal stores is good for everybody because it squeezes out the illicit market,” he said. “And then you have to win on service, selection and price. And those are things that I'm confident that we can exceed at.”