On paper, it all seems perfectly simple: five weeks from now Canada will flip a cataclysmic switch. And just like that, cannabis will be legal.

Goodbye, century of marijuana prohibition. Farewell, black market. Hello officer, put that badge away and sit for a while. There’s no crime here. Not anymore.

But as the government well knows, what’s written on paper won’t add up to anything nearly so blissful. Though Oct. 17 looms as a cultural and legal sea change, cannabis will not shed its stigma overnight.

As the new law takes hold, few expect the vast black and grey markets that carried Canadian cannabis to this moment to vanish like so many puffs of smoke, surrendering lock, stock and barrel to Bay Street’s new publicly traded titans of factory-scale production.

The day weed becomes legal, activists and cannabis law experts say, marks the start of a prolonged, uncertain and potentially ugly battle for the shape and soul of the industry that emerges from the regulatory haze.

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“I haven’t had a day off in two years and I doubt I will for the next five,” said Toronto-based cannabis lawyer Jack Lloyd. “There are so many legal battles ahead.” Lloyd is at the forefront of the fight to bring grey-market cannabis producers into the legal light as licensed providers of the product they know so well.

“We’re about to enter a period of transition where everything is at stake, right across Canada. You have big, well-financed companies who have a large head start on the smaller-scale grassroots growers. And the worry is that the big players are going to oversupply to the extent that they choke out the grassroots community’s ability to even be a part of what comes next.”

Lloyd argues the full heft of Canadian cannabis expertise resides within that grey market. Done right, with careful vetting and regulatory patience, Canada could yet see a craft cannabis industry every bit as diverse and flourishing as our craft beer industry.

“The other scenario — the bad one — is that we go back to the cannabis equivalent of the 1970s beer experience. Labatt’s and Molson’s and that’s pretty much it,” he says.

“It’s not all doom and gloom. The language of the act allows for micro-licences and so there’s a legal pathway that acknowledges the need to bring the grey market onboard. But the regulatory process takes time and what’s needed now is patience, on the part of prosecutors and police, a grace period to let the process of moving out of the grey market happen without fear that small growers will be prosecuted.”

Ontario, the biggest prize in the Canadian market, is a paradox as Oct. 17 approaches. On one hand, we are the laggards — as the rest of the country opens with a full spectrum of online and bricks-and-mortar shops, nothing but web-based mail-order will be available here until next April, when privately owned retail outlets begin the battle for market share.

Yet Ontario is already emerging as Big Cannabis powerhouse — home to major licensed providers that are scrambling now to fulfill orders across the country in time for Oct. 17. One recent example: the Nova Scotia Liquor Corp. two weeks ago announced 11 Ontario vendors were among 14 companies supplying its initial cannabis orders totalling 3.74 million grams.

Among the most ambitious Ontario projects is the transformation now underway at a massive former Kraft factory in Cobourg by Whitby-based FV Pharma Inc., in partnership with Auxly Cannabis Group Inc. By the new year the project will begin harvesting 220,000 square feet of indoor cultivation, the first milestone in the firm’s goal to establish “the largest indoor cannabis facility in the world.”

That such emerging Ontario behemoths will be growing so much of Nova Scotia’s supply has stung small growers and dispensers in the Maritimes. But the grey market there is vowing to fight back.

“We’ve been working with Nova Scotia growers and there’s so much local talent here — but there won’t be any of it for sale in the government stores on Oct. 17,” said Chris Enns of the Farm Assists Medical Cannabis Resource Centre, a Halifax dispensary.

“The local craft market here just doesn’t have the lobbying power of the big players in Ontario and British Columbia.

“But what I am seeing is local growers doing everything they can to self-regulate — more and more people in the grey market are registering with Health Canada and going with new packaging that conforms to the new rules. People are taking it as far they can, with the goal of being on-boarded into the legal regime.”

As a longtime activist for medical marijuana, Enns remains defiant over what he sees as a serious gap in the new laws.

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“We won’t see access to cannabis derivatives in the government-run shops and so we’re staying open after Oct. 17 to ensure patients have access to the edibles, extracts and tinctures that our patients require.

“In that sense, Oct. 17 is just another day. We’re not going to be roaring from a mountaintop, we’ll be in the shop bracing for the next raid because the Halifax integrated drug enforcement unit has already informed me quite succinctly that they will be back.”

But Enns and others say the grey market is not powerless in this equation. Just as he intends to stay open and continue the fight, he expects local growers, if they are unable to find a foothold in the legal market, will “retreat and go back as grey market providers — but with a few new ideas about how to do business.”

One scenario under discussion within grey-market circles, according to two sources who spoke to the Star on condition their names not be used, is a price war.

“We want to be legal — we want to pay the taxes,” one small-scale western Canadian grower told the Star. “But if there is no pathway for the mom-and-pop growers to do so, many will just stick to business as usual, but at a lower price than the legal shops.

“It’s not ideal. People worry about how aggressive the policing will become. But some people see no other choice. I know one couple in B.C. — they are pensioners without a pension. They’ve grown for years and this is what keeps them going. They’ve had the same small circle of customers for decades.

“By all means go after organized crime. Go after the real bad guys with huge grow-ops. Get the bikers out of it, if there are any left. But a lot of the market involves really small-scale growing. Does anyone want to put people like that in jail? Is that what Canada wants from legalization?”

Another immediate issue will be the fate of the many hundreds of private Canadian online cannabis shops that have sprouted exponentially in recent months. On Oct. 17, should these pirate mail-order outfits remain, they will be violating the exclusive realm of the government-owned Ontario Cannabis Store and the rest of Canada’s web-based outlets — and in many cases, offering a significantly lower price per gram.

Will Ontario and the other provinces allow the mail-order privateers to continue cutting their grass? Unlikely. But stopping them could get expensive.

Said Enns: “The online issue is especially tricky in that they are protected somewhat by the sheer cost of prosecution. If police make the effort to find out who’s behind the website, and then try to figure out where the product is stored and where the money is, it becomes a game of cat and mouse. And what if it ends up being operated by individuals not in the country?”

The prospect of such intense and elusive competition, together with the challenges of shifting into the legal market, has prompted some grey-market veterans to consider burgeoning markets elsewhere, as the cannabis thaw spreads globally.

One example is Toronto-based 4C Labs SAS, which is now in the final stages of approval for a significant outdoor cultivation project in Colombia, led by a team of Canadian cannabis experts.

“Colombia respects Canadian expertise and so our team is bringing that knowledge – the excellent Canadian grey-market genetics that have been developed over the past 30 years — to a very new frontier,” said 4C’s CEO and co-founder, Dave Farquharson.

“The obvious competitive advantage is cost. Growing outdoors at a rate of 240,000 plants per year is the initial goal and we can get there in Colombia at a fraction of what it would be in Canada, while also avoiding Canada’s regulatory challenges.

“Our end product, initially, will be pharmaceutical-grade extracts for the CBD (cannabidiol) market in Europe and we will expand from there,” said Farquharson. “We’re adapting extraction technology already in use in the flower market in Colombia.

“As far as Canada is concerned, I feel strongly that you can’t just turn off one tap and turn on another. You’ve got to somehow incorporate the grey market into the new legal framework. I know from our own experience that the people who care most about the end product are the ones who have been doing it for years.”

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