British Columbia

Pot shops could persist in 'grey market' after legalization, retailer says

Victoria-based retailer doesn't think the grey market will come to a sudden end on October 17.

Unlicensed retailers 'may not be shut down overnight,' province says

It will take a while for private cannabis retailers to get their licence to sell after legalization on Oct. 17, but one Victoria-based dispensary owner is confident the grey market will survive the long wait for approval. (Megan Thomas/CBC)

The legally-vague "grey market" for small-scale cannabis growers and retailers will likely persist after legalization, says one dispensary owner.

On Oct. 17, only licensed shops will be permitted to sell pot — but the province's current retailers aren't allowed to apply until that date, creating a bureaucratic lag for business owners.

Only one legal shop in the province, a government-run B.C. cannabis store in Kamloops, will be open for business next week, leaving plenty of room for unlicensed private dispensaries to make a buck.

But Alex Robb, manager of Vancouver Island-based Trees Cannabis, isn't worried. He says small growers are integral to B.C.'s cannabis industry — and the province knows it. 

Retailers must apply for new licence 

The province has said authorities may not shutter local dispensaries overnight.

Officials anticipate "many illegal dispensaries will voluntarily come into compliance with the law by obtaining a retail licence or shutting down," the ministry of public safety said in a statement.

"All retailers must apply for a new licence, and have that approved through all the appropriate channels before they are legal, there will be no grandfathering."

The cannabis legislation coming into force next week retains the province's power to "enter illegal cannabis premises without a warrant, seize illegal product and records and impose monetary penalties."

Micro-growers 'boon' to communities

But Robb isn't letting the law harsh his mellow.

"I don't think anybody wants this to be a situation where cannabis is legalized and you can't get cannabis anywhere anymore," he said.

Alex Robb thinks the province recognizes the importance of the small retailer and won't shut down illegal dispensaries overnight. (Megan Thomas/CBC)

"I don't think there's a desire to immediately cut off [retailers], or re-criminalize them, while there still isn't a way for them to access the legal system."

Robb pointed out it could take months for applicants to obtain a licence, and while they wait for approval, he expects unlicensed retailers will be able to keep their doors open.

"We will have all of our applications in, and we will be awaiting the processing of those applications," he said.

Robb said his locations are budgeting to wind down their grey-market inventory so they can gradually restock with legal products from the B.C. Liquor Distribution Branch.

"I don't think the province has an appetite to go around closing storefronts, especially popular storefronts or companies that have been licensed by municipal governments already," he said.

He pointed to the potential benefits of cannabis farming for towns affected by mill closures or defunct fisheries.

"I think that's really what they want to get out of this in the end," he said.

"To be able to maintain our expertise … and transition that to the legal system, so that legalization is a boon to the province's economy, and does not cause problems by displacing these farmers in small communities."

With files from CBC Radio's All Points West

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