Pot chains make plans to expand across Canada ahead of legalization

theglobeandmail.com
By Mike Hager
Dec. 14, 2016

The entrepreneurs behind Canada’s two biggest chains of illegal marijuana dispensaries say they will continue to expand the number of their storefronts aggressively across the country while the federal and provincial governments take the next two years to fine-tune new laws to legalize the substance.

A day after an independent panel provided Ottawa with a road map for ending the prohibition on recreational marijuana that could include dispensaries, MP Bill Blair, the government’s point person on the issue, warned that, in the meantime, anyone selling marijuana outside the federal mail-order system is breaking the law and police could raid their stores.

But those behind two Vancouver-based chains say the new report indicates they will have two years of challenging the existing cannabis laws - and police departments’ appetite for enforcing them - during which they plan to open more than 100 new stores across Canada. They say they are willing to comply with future regulations and hope to join the regulated sector once the federal laws change, but Mr. Blair said it is too early to say whether the new legal system will allow dispensaries to participate.

“We’re scaling up right now and I believe we could have as many Cannabis Culture [dispensaries] as there are Starbucks,” said Jodie Emery, who is in Montreal opening eight shops to add to an empire of 12 franchises. “I know that sounds crazy, but I feel it’s only fair if marijuana is available as much as that recreational drug [coffee].”

She said investors are lining up to open the retail outlets, which sell to any adult.

“One of our investors has decided to open up franchises in Montreal, and we get requests from all across Canada to open in basically every city,” Ms. Emery said.

Montreal police said this week such dispensaries are not permitted under federal rules governing medical marijuana and that they might intervene if laws are broken. Mayor Denis Coderre said federal laws should apply to the outlets, but cautioned that new marijuana laws are on the way next spring.

Police across the country have reacted differently to illegal storefronts. Many communities policed by the Mounties crack down on dispensaries soon after they open.

In cities such as Vancouver and Victoria, local politicians have opted to regulate rather than raid, and plan to modify their bylaws to accommodate the new federal rules.

Don Briere, who runs Canada’s biggest chain of illegal marijuana dispensaries, with 21 locations in British Columbia and Ontario, said he is opening a franchise in Montreal before the end of this year and hopes to have more than 100 by 2018.

“It’s not just me, there’s thousands of us, really thousands of people, that want in [on the dispensary business],” said Mr. Briere, who was sent to prison for heading marijuana grow operations in the 1990s.

Mr. Briere said he expects $17-million in sales this year and pays hundreds of thousands of dollars in harmonized sales tax each month. He said the biggest challenge to his expansion plans is finding landlords.

Often, he and his franchise partners, who pay $50,000 to open a Weeds store and begin buying from his suppliers, must pay an extra six months in rent that is forfeited if the store is raided or seized.

“It’s kind of a sin tax,” said Mr. Briere, who often reopens his stores the day after police shut them down.

Mr. Blair said on Wednesday that dispensaries remain illegal and that the current laws must be enforced.

“Each police service has the responsibility for public safety and I would leave it entirely up to them how they utilize their resources to maintain the safety of their communities,” Mr. Blair said.

Kirk Tousaw, a Nanaimo-based lawyer who helped win a constitutional challenge that led to the overhaul of the medical-marijuana system this summer, said the federal task force clearly recommended a role for dispensaries in any legal cannabis distribution model.

“I don’t see any good reason why the provinces would want to create a parallel and competing system as opposed to bringing dispensaries into a regulated system,” Mr. Tousaw said from Saskatoon, where he is defending a compassion club that was raided last year.

“Out of the shadows and into the light.”