Cannabis cowboys

By Liz McArthur, October 2015

Why are marijuana dispensaries the growth business in Victoria?

In downtown Victoria empty retail storefronts are quickly being filled with marijuana dispensaries and business is booming for the legally ambiguous operations. In what has been likened to a new gold rush, it is not the federally approved “Licensed Producers,” but these rogue dispensaries who are successfully tapping in to an eager market. If marijuana is Canada’s new gold rush, then British Columbia is the Wild West. Regardless of a warning shot fired at them by Health Canada in September and proposals to regulate them at the municipal level, the retail marijuana industry seems likely to grow.

While the plethora of storefront dispensaries makes it easy for people to obtain marijuana, their rise originated somewhat ironically in a new law that restricts access. “It’s just been made as difficult as possible for people to have access to a product that’s readily available on the streets,” says Travis Lane, the general manager of Trees Marijuana Dispensary in Rock Bay.

He’s referring to the Marijuana for Medical Purposes Regulations (MMPR) which was introduced by the Federal government in 2013 to replace the Marijuana Medical Access Regulations (MMAR). Under the MMAR it was possible to grow medical marijuana for yourself, but now the MMPR provides licenses only to heavily vetted operations which are often owned by multi-million dollar companies. Tilray, for example, operating out of Nanaimo, is owned by Seattle-based Privateer Industries which saw a $75 million initial investment from the founder of PayPal.

It’s difficult to become a licenced producer. Health Canada says on its website that as of March 31, 2015, 1284 applications had been received, yet there are only 26 licensed producers currently in Canada. Once licensed, those producers are only allowed to sell their product to their clients through the mail. Until recently they were limited to selling dried marijuana bud, but now a Supreme Court of Canada ruling will allow them to sell derivatives, like oil which can be used in cooking or ointments.

Such oils, tinctures, capsules and edible products—chocolate chip Buddha balls, gluten-free ginger cookies, mango lozenges—have been one of the appealing aspects of dispensaries for people accessing medical marijuana who do not want to smoke it. As a result, Victoria dispensaries have no shortage of customers. Dispensaries’ staff advise customers on which strains and products allow them to avoid, for instance, mind-altering effects in favour of analgesic and anti-inflammatory ones and on how to establish medical need.

People seek medical marijuana to help them cope with a range of problems from HIV/AIDS symptoms and chronic pain to nausea or sleep disorders. People with whiplash, arthritis and MS seek it out. Often they prefer it to prescription pharmaceuticals. “The market’s already there whether [the law is] gray or black or white; it’s been shown that prohibition is not going to kill any market,” says Lane. “So at some point someone’s going to step in there. Supply and demand. There’s a huge demand for quality products that aren’t bought off a shady guy in a dark alley.”

The alternative to that “shady guy in a dark alley” is aggressively moving onto Main Street in several Canadian cities, the highest density of which are on the West Coast. Vancouver City Council made news when it rolled out a business licensing scheme for its dispensaries. Vancouver will charge non-profit dispensaries $1000 for a license and for-profit dispensaries $30,000, and is currently assessing the 176 applications it received. Victoria, where there are about 25 dispensaries, is working on what potential regulation would look like here.

Health Canada made moves to protect the licensed producers’ claim on the marijuana market on September 9 when it sent letters to 13 dispensaries ordering them to “suspend all activities with controlled substances.” If the dispensaries do not comply within 30 days, the letter warns that the RCMP will enforce the Health Canada requirements. 

Alex Robb, Trees’ community liaison, says the federal government is supporting multi-million dollar companies like Tilray in Nanaimo and Tweed in Ontario and cutting out “a native artisanal marijuana industry that has developed on Vancouver Island and the lower mainland over the course of the last 60 years.”

He says Trees and others like it “are the representatives of this artisanal industry…and they were cut out of the other system.” Yet, the dispensary operators don’t want to become large scale producers. Instead they would like to see the law support the existing artisanal industry. “So this is the alternative that’s being offered to Canadians. How you want to run your marijuana production and distribution. Because it happens everywhere, how do we want to do it here?” 

Robb, who is also completing a PhD in political science at the University of Victoria, speculates that the timing of the letters from Health Canada is a message to municipalities who are ignoring the MMPR structure. Health Canada ordered the dispensaries to send a reply letter confirming that they will stop selling marijuana by September 21. That is the same day the Union of BC Municipalities (UBCM) will discuss a motion to “endorse the position that local governments have the authority to regulate medical marijuana dispensaries.” The motion will be tabled on September 24.

Robb says, “The timing is a clear sign from the federal government that they are not pleased with the local governments’ plans to grant themselves authority over dispensaries.”

John Moeller is the operations director for Broken Coast, a small licensed producer that operates in Ladysmith. He says becoming a licensed producer was not the windfall everyone expected, but he doesn’t know if they are selling to fewer customers on the West Coast because of the proliferation of dispensaries.

He says if the dispensaries weren’t there, customers wouldn’t necessarily register with licensed producers. “They might just buy it from a different illegal source. They might buy it from their neighbour or someone that’s growing it that they know…Logic would have you believe, though, that if there’s a dispensary on every corner, it’s going to start having an effect over time.”

Moeller thinks an upcoming court decision will have a big impact on dispensaries. A temporary court injunction has allowed people who had licenses to grow their own under the MMAR to continue growing marijuana until a decision is reached sometime this fall. If people can no longer legally grow at home, it could change the way dispensaries are making an end run around the legal system.

As Moeller explains, “The dispensaries are more or less just buying all their product from people who are overproducing under the MMAR, so with that taken out of the equation, those people will have a really hard time running their operations, which is what supplies the dispensaries, so the dispensaries will have a hard time finding product to put on their shelves. In a roundabout kind of way, a negative outcome for the home grower is a negative outcome for the dispensary owner too.”

Moeller can see the appeal for dispensary customers when compared to buying by mail from licensed producers: “The convenience factor is just so much greater for people that, ultimately, it’s going to be the model that everyone’s going to go with. In the end I don’t think mail delivery is going to be the long term solution to medical marijuana. It’s just a matter of time before something changes on that front and I think the licensed producers would be more than happy to be a part of that.”

Currently, licensed producers are prohibited from operating storefronts. Moeller is not happy with what he sees as an unfair system at the moment: “It’s pretty hard to compete against a completely unregulated market like [the dispensaries] when we have to adhere to guidelines.”

John Wilson (not his real name) is a Victoria business owner, father, and home owner and says he had used marijuana to treat anxiety and sleep issues for years before getting a prescription from his doctor for acute pain.

“On top of that I said I don’t want to feel guilty when I do smoke marijuana because that causes me even more anxiety and I want to break that cycle and this is how I can do it. [The doctor] agreed with everything I said and he especially agreed with the part about it making me feel guilty and having to deal with that as an issue on its own.” Though he was pleasantly surprised by discreet and calm service at a dispensary, in the end, he says, buying from a licensed producer was a better fit for him. “I didn’t have to go anywhere, walk through any doors, park my car, go through a parking lot where people can see what I’m doing. It was all from the privacy of my own home. Which was nice. Not that I really mind that people know what I’m doing, but I want to be able to protect my public image as much as I can and one easy way to do it is just by ordering off the internet through the [licensed producer].” 

Wilson, though, may be in the minority, as he only smokes marijuana and isn’t interested in edible or topical products. It is not uncommon for lines to form at the cash registers in any downtown dispensary, an indicator of the appetite that exists for marijuana products. Customers range in age up to their eighties.

Many dispensaries are using marketing that moves away from imagery and connotations that would be associated with marijuana stoner culture. Leaf, which has a location on Yates Street and another on Salt Spring Island, uses aromatherapy and gentle music in its waiting area and could pass as a spa or dentist’s office. Nervous-looking customers wait on a bench to meet with a consultant. Bolder customers lean against the counter and chat with the receptionist. Leaf runs an active Instagram account with frequent photos of their product in various stages of growth and packaging.

A few blocks away, Weeds Social Club on Douglas Street has a prominent neon green marijuana leaf for a sign and a wide range of their products on display in a glass case instantly visible to customers. 

Across the street from Weeds, at City Hall, staff are examining possibilities for regulation. Public hearings are to be held this fall (an online survey closed September 18). Mayor Lisa Helps is unfazed by the determination of the dispensary operators to force lawmakers to acknowledge the artisanal marijuana industry and their goal of changing the federal system from the municipal level. 

Her outlook is in line with the proposed resolution from the UBCM. “The law doesn’t know what to do,” says Helps. “Most changes in law are driven from the bottom up. Not necessarily at this kind of grassroots level, but I think it makes complete sense and I think that we’ll do a good job as a city and a regulator if we’re working in partnership with those folks who are running legitimate dispensaries and providing medicine.”

Despite any forthcoming municipal regulations, Victoria Police will still be in a tough spot. The Criminal Code prohibits the selling of marijuana in storefronts, but people with a doctor’s recommendation for medical marijuana who do not want to smoke it are within their legal rights to access edible marijuana products and the dispensaries are, in many cases, the only option for those customers.

Victoria Police Inspector Scott McGregor says the last time Victoria Police made an arrest related to a dispensary it did not lead to a conviction. “Even though there is a law in place that says it’s technically illegal to traffic marijuana, from an enforcement perspective it’s not entirely clear from the courts whether or not any sort of enforcement action would be supported,” he says, adding that Victoria Police are focusing drug enforcement resources on controlling hard drugs like crystal meth, heroin and crack cocaine.

“That’s not to say we wouldn’t conduct enforcement action against a marijuana dispensary because…they are inherently illegal,” says McGregor. “I question whether or not all of the marijuana dispensaries operating in the City of Victoria are selling only to people with a medical need. I think that they’re not. Personally I also think that access to medical certificates has been made very, very easy. I’m not sure that that’s necessarily being scrutinized as well as it should be.”

A potentially new federal government this fall, along with decisions on current court cases, means the medical marijuana scene could be in flux for a while.

Liz McArthur is a journalist and broadcaster. She is currently working on Sleepy City, a documentary podcast series she produces out of CFUV Radio.