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WATCH: Protesters face off against police at Cannabis Day rally. Warning: Video contains strong language.

July 1 is not just Canada Day, it’s also Cannabis Day in downtown Vancouver and it started off with a confrontation between police, city workers and marijuana protesters.

Police say they made two arrests at the annual smoke-in at the Vancouver Art Gallery, which went ahead despite the efforts by the City of Vancouver to shut down the event. Due to ongoing construction around the VAG, this year’s event is being held at a smaller space on the south side of the building.

READ MORE: Thousands attend 420 rally in Vancouver

Cannabis Day organizers handed out marijuana to participants as they started a day-long smoke-in complete with speeches and vendors, amid a large police presence. Global News witnessed two attendees being arrested by police following a heated confrontation between the protesters and VPD.

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“We’re here as the Marijuana Party of Canada, this is an election year,” said one Cannabis Day attendee. “We have every right to set up a table and a tent to inform the public of what our beliefs are…. they don’t want us to set up tables and tents for some arbitrary reason done by City Hall… [there’s] no reason other than to attack our community.” Tweet This

VPD Cst. Brian Montague said in a statement that officers observed a man “overtly selling marijuana, including to young people.” Montague says officers asked him to stop, but the man said he intended to openly sell to anyone despite police requests and warnings.‎

The man was arrested and police say they “were required to pepper spray at least one person to complete the arrest.”

WATCH: VPD arrest two men at Cannabis Day rally

Two men are now in custody. One faces potential trafficking changes and the other faces a charge of obstruction.

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Police were in attendance at Cannabis Day in downtown Vancouver. Gl

Cannabis Day has taken place peacefully in downtown Vancouver for the past 20 years.

Despite some opposition to the event being held on Canada Day, which is largely seen as a family holiday, organizers say it’s held on July 1 for a reason.

“The laws against cannabis are very destructive and they fly right in the face of what it means to be a Canadian and what it means to be in a free country. If you’re not free to grow a plant and use a plant for arthritis pain or to feel good or whatever you want, you’re not free.”

Longtime organizer and marijuana activist Jodie Emery says this is the first year the event has experienced any confrontation with police.

Despite this year’s challenges, organizers vow the event will continue as usual.

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WATCH: Cannabis Day goes ahead despite warnings from the City of Vancouver to shut it down. Grace Ke reports.

~ with files from Grace Ke and Canadian Press