Police enforcement of marijuana shops will level playing field, says economist

Jason Childs, an associate professor of economics at the University of Regina, says dispensaries that were raided could have damaged their chance to apply for a licence. Six unlicensed retailers were raided last week in Regina.

Regina dispensaries raided by police could lose chance to apply for licence: Jason Childs

Jason Childs says retailers selling marijuana that opted to stay open, despite police warning, may have damaged their ability to open a legitimate business when legalization takes effect. (CBC)

Even if we're on the verge of cannabis legalization, running a marijuana dispensary and selling pot is still illegal in Regina — and one expert says enforcement is key to making the sale of marijuana a level playing field.

In Saskatchewan, there will be a set number of stores allowed to sell marijuana in each community. There will be six in Regina and seven in Saskatoon, for example. 

Post-legalization, police will enforce the number of stores operating. If they don't, and other unlicensed dispensaries pop up, it could under cut the legitimately operating businesses, says Jason Childs. The associate professor of economics at the University of Regina was one of several academics to author a report on marijuana legalization in Saskatchewan. 

Childs said that if a dispensary is operating without a licence, that means they've circumvented the legal framework and are not paying associated taxes and fees. That tips the scales in favour of people selling marijuana illegally.

"They're at a huge price advantage and a huge cost advantage and that's an unfair playing field," said Childs. "That's just patently unfair."

Jason Childs, an associate professor of economics at the University of Regina, says taxes must be low and prices must be competitive on recreational cannabis once it's legalized in order to kill the illegal market. (CBC News)

Under the provincial government's retail structure, applicants will be vetted to see if they meet the minimum criteria to be a licensed retailer. That includes being considered "reputable." Childs said the term is vague in that it doesn't have a specific rubric for what qualifies someone as such.

"They take all people who meet the minimum criteria to be a licensed retailer in Regina and they draw names out of a hat basically," said Childs.

"So if 13 names go in [and] six licenses are granted, seven people are going home unhappy."

Last week, Regina police raided six dispensaries. At least one has chosen to reopen.

Doing so, despite a police warning and despite running an illegal business, is taking a risk, said Childs.

But, he said: "​​Knowing that there's only going to be about six licenses granted for the city, if you don't think you're going to get one of those licenses, why would you not stick around and try and make as much money as you possibly can?"

Police Chief Evan Bray with the Regina Police Service initially said that people would not be charged following the raids. But now, after that one business opted to reopen, charges have been laid.

It's uncertain what effect being raided will have on the businesses applying for a licence.  

"I think getting raided for non-compliance with a police order this close to legalization is not going to go in their favour," said Childs.