The Rise and Evolution of Canada’s Grey Area Dispensaries Jackson Follow Feb 28 · 7 min read

The Beginning of Grey Area Dispensaries

In the years leading up to legalization, there was a brief phenomenon that took place across the country. As Canadian society grew more accepting of cannabis and it seemed as though legalization was an inevitability; dispensaries started appearing. Growing up in a big city there had always been one or two around, but they always seemed so unattainable. However, one day, a new storefront appeared, with a giant weed leaf cut out on a sandwich board. I pulled over the car and went to check it out. Inside they had two Tupperware full of pre-rolls and a bunch of single grams of cannabis bagged up. They explained that they existed in a legal grey area.

I was handed a phone where I then spoke with a ‘doctor’ (who I am certain was making and eating a sandwich on the other line). He asked a few questions and in less than a minute I had permission to buy cannabis there.

The next month; another dispensary appeared. Then another. And another. After a while, there were multiple dispensaries in every neighborhood.

The Glory Days

For a moment in time; it was heaven. Stores kept competitive prices, there were always new strains hitting the market and concentrates and edibles were just starting to really take off. When people dreamt of what legalization could look like; this is what many saw. Sure there were a few stores that had bad intentions and sold to underage customers or provided sub-par quality flower. But overall it was an amazing illustration of how cannabis could be integrated into society.

There was no influx of mental health patients. The streets were not filled with weed-addicted youth. Cars weren’t crashing into each other like something out of a video game. It showed that cannabis can be a part of society just like anything else. If anything, making such a fanfare around the issue only increases tension and causes for divisiveness.

The dream, however, could not last forever. As it was, there was no chance for the government to tax cannabis for everything it was worth and unfortunately that was just not going to fly.

Both Medical and Recreational

These dispensaries, although technically illegal, provided patients with access to medical cannabis. They were able to operate within a legal grey area, and as long as they followed the guidelines, they wouldn’t get shut down.

While Health Canada did its best to accommodate the demand for medical cannabis, they continuously fell short. Many people use cannabis to help with appetite or digestive issues. These grey area dispensaries catered to that market by creating an endless supply of medicated cannabis drinks, snacks and candies. These options gave patients the ability to consume cannabis without having to smoke anything.

Furthermore; they made access to cannabis much easier for both medical and recreational users alike. Some medical cannabis users were unsure of ordering cannabis online, especially pre-legalization. The idea of signing up with the government to receive cannabis was unsettling for some. There were also many patients who simply couldn’t wait for the government to receive and pack their order. Many medical cannabis patients have episodes that require a stronger dose or taking more than usual. The ability to go down the street to buy some CBD isolate or THC tincture to help with inflammation is so important and allowed countless patients to receive their medication, and therefore relief right away.

Many Storefront Dispensaries Operated in the Legal Grey Area

At one point there were hundreds of illegal dispensaries across the country that were operating in a legal grey area.

Take Vancouver, for example. The city began licensing medical cannabis dispensaries in 2015, despite provincial, as well as federal laws deeming them illegal.

However, of the almost 180 cannabis dispensaries and compassion clubs that applied for licenses, almost none met the requirements needed to obtain a license. A few were forced to close, but many defied the city’s orders.

Since then, the city’s licenses have been nullified and replaced by Health Canada’s licensing system. This change still did not stop the dispensaries from operating, at least at first. Many tried to use their old Medical Marijuana-Related Use license issued by the city. A great many more were selling cannabis without licenses at all, just to meet the demand for medical as well as recreational cannabis.

Police Raids

The conditions put in place in many municipalities included keeping a specific distance away from schools or daycares and zoning laws.

However, this did not mean all were left alone by the police. Many faced raids and were forced to shut down.

In Toronto, for example, authorities barricaded the front doors of grey area dispensaries with concrete walls.

Many of the closed dispensaries were given hefty fines with the reasoning behind the amount often convoluted and vague. Even just last week, 6 months after being forced to close down Tree’s owner Alex Robb was fined $1.5 Million (CAD) for operating an illegal dispensary. Robb says he had been saving money and anticipated a fair and reasonable fine however he could never have predicted it would be so much.

The End

Despite these early setbacks, many dispensaries carried on as usual. While some were forced to close, many stayed open. However, the harsh reality began to set in. As cities opened their first provincially licensed dispensaries it became clear that they could not compete with the grey-area stores. Quality, price and accessibility all worked in the favour of the pre-existing dispensaries. This only increased the number of raids. After a year into legalization, only a few storefronts existed in each city.

And it was not for lack of trying, by the way. The slow process of issuing licenses and approval for expansion created a bottleneck that impeded legal market transition. When finally considered; almost none were actually accepted due to strict rules put in place.

Adapting to the New Cannabis Landscape

Many illegal dispensaries had been in business for decades. Existing as compassion clubs, long before the government cared about offering medical cannabis. Sadly, because of strict licensing requirements and the bottleneck caused by the slow process, a great deal of them were left in limbo. They had become a huge part of the country’s rapid cannabis market growth. Now, they were locked out of an industry that they have been a part of from the start. Forced into the shadows.

While the government might have hoped this would be the end of unlicensed cannabis, they failed to consider how knowledgeable Canadians already were on quality and affordability. Instead of eliminating grey area dispensaries altogether, they have just forced them online. Without a storefront, sure, but the service is still there.

MoM

I think everyone can agree that moms are amazing. They literally gave us the gift of life. Now, Cannabis MoMs can’t give life, but they can give weed and edibles which makes them pretty high up there as well. Many Canadians were now unsure of where to get their cannabis. Some people had spoken of MoM’s in the past, but for many like me, the idea of ordering weed through the mail seemed… strange. However, with time, more and more cannabis users began to accept MoMs as their new source for cannabis and, in turn, began to trust them more.

Now there are over 500 MoM’s online providing affordable access to cannabis.

This is not without risk of course. There have been bad actors who have taken advantage of the MoM world and scammed clients out of their money with no product to show for it. That is why I recommend a trusted source with many reviews.

Delivery

It’s not just about mail order anymore either. In many cities, there are same-day delivery services. These come with their own pros and cons, so be safe and again, use a trusted source if you’re going to invite a stranger into your home to give them cash. Many people prefer to pay online, rather than meeting someone face to face.

The Future of Brick-and-Mortar Dispensaries

The federal and provincial cannabis laws are far from perfect. And there are a lot of factors that are still influencing the ever-changing cannabis landscape.

As it stands, the majority of brick and mortar dispensaries are fully licensed by the government. This means they can only sell government-approved cannabis. I’m not going to go into all of the issues with the majority of government-licensed cannabis, but let me summarize by saying; it’s…not great.

If the process of granting licenses and permits is still slow, biased and unjust, and if the consumers still feel that the variety and quality of weed provided by government-owned dispensaries is mediocre despite its higher prices…then we can assume that these nonlicensed dispensaries, whether online or in-person, will always be around.