Illegal pot shops planning shutdown in bid to go legit

A survey of illegal cannabis dispensaries in Ottawa found that nine stores plan to stop selling the drug to comply with the province's rules around securing legal licences — and only two plan to stay open.

At least 9 Ottawa dispensaries say they want to apply for a licence

The three illegal Weeds dispensaries in Ottawa are planning to shut down in a bid to get a license to open legally in April. A recent survey found nine stores in the nation's capital plan to go down that road. (Weeds)

The operators of at least nine illegal pot stores in Ottawa are planning to shut down this week in a bid to go legit.

According to a survey of stores in the nation's capital, only two plan to remain open after cannabis becomes legal on Oct. 17.

Last month, the Ontario government offered illegal dispensaries a chance to apply for one of as many as 1,000 licences it plans to hand out to businesses interested in operating a legal private cannabis store.

"We're closing down because we're just trying to comply with all the Cannabis Act laws and regulations," said a store manager named Austin who works for Weeds, which operates three dispensaries in Ottawa.

CBC agreed to use Austin's first name only because of his concerns about repercussions from working in a currently illegal industry.​

This sign outside the Cannabliss dispensary on Preston Avenue explains it's closing but adds that 'We certainly hope to see you again in the future.' (Radio-Canada)

Illegal dispensaries are required to shut down before Oct. 17 if they have any hopes of being awarded a legal licence.

The catch, however, is that licensing won't begin until April, when the rules around the private stores are in place.

Not eligible for EI

"Unfortunately, we're all going to be laid off," said Austin, who estimates there are about 40 people working at Ottawa's three Weeds locations.

"A lot of us are disheartened since we were only informed a week ago. A lot of us will be struggling. A lot of us, unfortunately, won't be eligible for [employment insurance]." 

Shawn MacAleese, a spokesperson for Cannabliss and Cannada's Culture, told CBC those two businesses are also planning to shut down "in the hopes of obtaining a licence."

However, the owners plan to continue paying rent at their respective locations, MacAleese said, and will offer educational information on marijuana in the interim — just not the product itself. 

The CannaBliss pot dispensary on Preston Street is shutting down. It's a necessary step so the owner can apply for a license to sell legally, but Shawn Mac, a spokesperson for the company, says the months-long shutdown will cause hardship for some customers. 0:29

Illegal stores not a police priority

Contacts at two other illegal dispensaries in the city confirmed they planned to remain open regardless of whether it prevents them from applying for a legal licence in the future.  

Ottawa police have no plans to shut down those that remain open after Oct. 17 as it's not a priority, said Const. Amy Gagnon.

Gagnon said regulating and licensing stores will be handled by the Alcohol and Gaming Commission of Ontario.

"If anything, we will have a supporting role in that," she said. 

After legalization, police will be focused on monitoring impaired driving and ensuring public safety, Gagnon said.

Ottawa police officers exit the Wee Medical Dispensary Society shop on Rideau Street during a raid on Nov. 4, 2016. Police say they will not go after stores that remain open after Oct. 17 as they have more important priorities. (Judy Trinh/CBC)

Policy versus policing 

According to Ottawa lawyer and marijuana policy analyst Eugene Oscapella, the Progressive Conservative government's policy of offering illegal stores a path to legitimacy has ended up more successful at shutting the stores down than police efforts were.

"The government's policy may have helped the police to close some of these places, because the police have had a lot of trouble closing the dispensaries," said Oscapella.

"They hadn't wanted to necessarily use the resources to do it if the dispensaries weren't causing trouble."

Oscapella said he's not surprised so many stores took the carrot and have agreed to work toward operating legally.

Still, he said dispensary operators are "in a risky position because there's no guarantee they'll be able to obtain a legal licence — so they may be giving up something and getting nothing in return."

Ottawa lawyer Eugene Oscapella says the Ontario government's offer to help illegal cannabis stores go legit has done a lot to shut them down. (Radio-Canada)

Illegal stores promote illegal online sales 

Some stores are hedging their bets through online sales. 

Weeds, for instance, has a sign pointing customers to its own illegal online site during the store closures. 

The Cannabliss location is also promoting online sales beyond Oct. 17.

In Ontario, legal sales are only authorized through the government-operated Ontario Cannabis Store.

MacAleese suggested the Cannabliss online site, however, isn't affiliated with the store.

"As far as I know, we're just passing along their contact information to customers," he said.

MacAleese said businesses are not promoting the province's legal site because it won't feature products customers want, including edibles, which will remain illegal in Canada after Wednesday.

Nevertheless, one customer outside Cannabliss said he's looking forward to buying cannabis from the legal site since it will have gone through a more thorough inspection system. 

About the Author

Amanda Pfeffer

Amanda Pfeffer has worked for the CBC across the country, including Montreal, Vancouver, Fredericton, Quebec City and Ottawa. She welcomes story ideas and tips at amanda.pfeffer@cbc.ca.

With files from Roxane Leouzon