As national attitudes evolve Mississauga reconsiders cannabis ban; councillors target illegal market operating with impunity
In the centre of Mississauga, an illegal store called Weed Releaf has operated for years, offering residents 24/7 access to a range of cannabis products.
Since 2019, Peel police have repeatedly entered the shop, in a strip plaza along one of the busiest stretches of Hurontario Street, just south of Dundas Street. Warrants have been issued, fines have been levied and the store has been shut down…only to open again.
Now, to combat the illegal retail and online cannabis market in Mississauga, council members might allow the legal market to drown out illicit sales. They are rethinking their approach, with a possible vote this coming Wednesday to reverse the City’s ban on legal retail cannabis stores.
“Weed Releaf Cannabis Dispensary located at 2563 Hurontario Street, Mississauga, has been an illegal dispensary of concern,” a staff report presented to Council this week, detailed. “Since January 2019, PRP has executed several Cannabis Control Act search warrants and has seized thousands of dollars in cannabis products each time. The dispensary consistently re-opens after it has been ordered to stop operations. This operation has effectively cornered the illegal cannabis market in Mississauga and its central location provides easy access to consumers.”
Weed Releaf in Mississauga is an illegal cannabis store that has been repeatedly shut down by police but keeps reopening.
(Google Street View)
The operation of the store with impunity (Google and other search engines allow its website to be prominently featured in searches) sparks outrage among many, but in the absence of strong laws to combat the illegal market, there is little authorities can do.
“Peel Police continue their efforts to mitigate the impact of this illegal dispensary,” according to the report. “Peel Police note the same challenges persist. They state they have limited powers under the Cannabis Act and Cannabis Control Act, the fines are minimal, and the illegal businesses make significant cash profits that are not regulated or taxed. Penalties are not a deterrent.”
The report cites data from the Ontario Cannabis Store (OCS), a Crown corporation that manages legal cannabis distribution and sales across the province. “The illegal cannabis market still represents 43% of sales, although the legal market is growing at 56%. In 2020, the sale price for legal cannabis fell below the price for illegal cannabis. Current price data is not available,” the report highlights.
It also includes survey findings that suggest growing support for legal cannabis, using an Angus Reid Forum Research poll done in December for the OCS. “Public attitudes towards cannabis have been improving: 70 per cent of Ontarians perceive cannabis use as somewhat/mostly positive; Ontarians are significantly more likely to feel alcohol poses greater health risks than cannabis; 76 per cent of Ontarians perceive legalization of cannabis as being mostly good for Canada; 64 per cent say access to safe cannabis products is a significant benefit to cannabis legalization.”
Weighing all the factors laid out in the staff report, Mississauga is now once again considering an end to its ban on cannabis retail across the city’s limits. Without legal stores, prospective owners are watching the potential market adapt as significant revenue flows out of the GTA’s second largest municipality to neighbouring cities, while the unregulated market in Mississauga grows.
Councillor Dipika Damerla, who twice previously voted against allowing legal cannabis over concerns that the illegal market would prevent stores from succeeding, presented a notice of motion to the City’s general committee on Wednesday, requesting that Mississauga lift its council-directed ban prohibiting cannabis retail stores in the city. A passionate debate showed not all councillors are on board, and after a lengthy discussion the committee voted unanimously to defer the motion to next week’s full council meeting.
“Our choice is not between no stores and legal stores,” Damerla told the committee. “Our choice is between illegal stores and legal stores and if our threshold for opting in is going to be ‘we want control over the number of stores City of Mississauga has,’ we're never going to get that.”
“We're going to be in this limbo of a legal product that cannot be sold in Mississauga. In the meantime, the illegal stores thrive and part of the reason the illegal stores thrive is yes, it's true that no resident in Mississauga is complaining that they don't have access to marijuana or cannabis and that's because they're accessing it illegally and as council, we are aiding and abetting that access of illegal cannabis.”
Despite previously voting against legal cannabis retail stores twice, Councillor Dipika Damerla introduced a motion to lift the ban during Wednesday’s general committee meeting.
(The Pointer files)
The staff report provided context and data for elected officials to consider.
“After Toronto, Mississauga remains the top municipality in Ontario in terms of the number of illegal cannabis delivery services promoted on illegal websites. While demand is being increasingly satisfied by the legal market, the illegal market in Mississauga continues to operate. It is unknown whether the number of illegal delivery services in Mississauga will decrease over time if Mississauga opts-in. Although Toronto opted-in over two years ago, some illegal websites continue to persist in that municipality.”
The report includes updates from Peel Police, which reports that despite the persistence of illegal operations serving Mississauga residents, broader impacts on public safety are not a concern at this time.
“With the introduction of cannabis edibles and the availability of ‘bricks and mortar’ store fronts (post COVID-19), as well as the online legal products and delivery system, Peel Police have seen no additional upward crime trends associated to cannabis in Peel Region. The illegal mobile dispensaries in Mississauga that were on the rise in 2021 due to the pandemic, have become relatively obsolete.”
The report also provided data from the OCS on sales and other habits around cannabis use in the city, including that “42 per cent of Mississauga cannabis consumers report having purchased from mail order cannabis sites; 61 per cent from an individual; and 47 per cent from an illegal dispensary.”
This is close to Ontario data, which shows about 43 percent of cannabis purchases in the province are illegal, but the data is not in line with national survey findings from cannabis users.
The report cites the “2022 Canadian Cannabis Survey, commissioned annually by the Federal Government” which found "61% (of respondents) reported purchasing cannabis from a legal storefront, 11% from a friend, 8% grow their own, and 2% purchased from an illegal online or retail storefront.”
The national figures could be skewed due to hesitancy by those in the illegal market to respond.
The disparity with the rest of the country and the slightly higher rates of illegal use compared to the rest of Ontario suggest Mississauga’s cannabis ban is allowing the city’s illegal market to compete.
The OCS survey, according to the staff report, found that “While a significant proportion of consumers have purchased cannabis illegally, two-thirds value being able to purchase through an authorized seller; and Three-quarters believe that authorized sellers are better at ensuring products are safe and quality control practices are in place.”
The motion brought forward on Wednesday addresses previous issues raised by council members when cannabis retail in neighbourhoods was debated, a matter that has been reviewed and voted on twice, resulting in the absence of such storefronts across Mississauga, unlike its two large neighbours, Toronto and Brampton, where many residents travel to for their needs. The most recent rejection came in June 2021 with a majority of council voting against the stores, 8-4. Meanwhile, legal cannabis retail, and the industry around it, is flourishing in surrounding cities, sending millions in revenues spent by Mississauga residents across its borders.
Of the 64 Ontario municipalities that remain opted out of retail cannabis, Mississauga is the largest. According to the Alcohol and Gaming Commission of Ontario (AGCO) the province, as of January, had 1,640 retail cannabis shops, up from 1,460 reported in March 2022 by the Ontario Cannabis Store (OCS). According to the City’s staff report, prepared at the end of March, there are currently 1,714 cannabis stores in the province. None are in Mississauga, Brampton hosts 50 and Toronto is home to 431.
When cannabis was legalized in Canada in 2018, Ontario municipalities were provided the least amount of control, and were faced with a one-time option to opt-out of allowing the stores to operate within their boundaries. Municipalities that chose to opt out could opt back in at any time—but once they are in, there’s no turning back. Caledon has also vetoed the decision to allow cannabis retail.
In larger cities, cannabis stores have taken over empty storefronts, with parts of cities like Toronto filled with stores, sometimes multiple ones on the same block. This was one of the main reasons Mississauga City Council voted against the stores, fearing the city would be overpopulated by cannabis retail which would begin encroaching into inappropriate areas like school zones, around addiction centres and around daycares and parks or other places frequented by children.
According to a quarterly review conducted by the OCS, as of March 2022, the organization reported the average Ontarian is now only four kilometres away from the nearest legal cannabis shop, down from 4.6 kilometres reported in September 2021.
With the void of legal stores, illegal cannabis can flourish. As councillors debate what they believe to be best for the city, loopholes persist and Mississauga residents continue to be disproportionately served by the illegal cannabis market.
Obtaining cannabis by way of delivery services has become common for residents in Mississauga who use legal operations elsewhere that allow for orders to be placed and delivered. Venturing to neighbouring municipalities that have chosen to opt-in provides significant revenues to other municipalities and their local economies, while Mississauga misses out.
Mississauga Mayor Bonnie Crombie has been supportive of legal cannabis retail within the city. She previously noted that while delivery services outside Mississauga continue, the city should be fostering its own local market to serve residents while creating jobs and helping grow the economy.
“We are not addressing the black market whatsoever. I’ve come to believe we’re promoting the black market by not allowing legal shops to open,” Mayor Crombie said on Wednesday. “This view I’ve come to after I realized the province would not give us, and will not give us the control we’ve asked for over zoning or over clustering.
“This is a legal product. We don’t have the control we asked for and we’re preventing our residents who want access to these products to do so in a safe way,” she said. “What I don't want to be doing, which is what I believe we are doing, is aiding and abetting an illegal market … We're the third largest city in this province, and people shouldn't be making drug deals in back alleys.”
A June 2021 staff report indicated if Mississauga councillors reversed their decision, the City could bring in an estimated $74 million each year, creating economic growth, jobs and filling up storefronts that have become vacant. Updated revenue numbers have not been determined, staff noted on Wednesday.
As the decision hangs in the balance, cannabis retail consultant and Mississauga native Rianna Ford said it’s important council members recognize that allowing the legal industry into the city offers a range of benefits, from fostering economic growth to improving community culture by pushing out illegal elements which can then change negative attitudes toward cannabis use.
Cannabis retail consultant Rianna Ford is hoping council will recognize the benefits of opting in when it revists the matter next week.
(Alexis Wright/The Pointer)
“They just need to hear and understand and now I feel like they're slowly edging into it. It's just really the cultural and educational aspect I really hope they can focus on,” she said.
In the years since legalization, regulated cannabis across the country has grown into a large industry, with $405 million in revenue reported between September and December 2021 alone, an increase of 1.6 percent compared to the previous quarter — a sign the market for legal cannabis continues to expand.
Numbers from the Ontario Cannabis Store show the legal market is making progress in pushing the illicit trade out of communities. According to OCS data, Ontarians chose to purchase more than half of their cannabis through legal channels, which represented 56.9 percent of overall consumption. Ontario continued to sell more legal cannabis than any other province or territory, with 40 percent of all legal cannabis sales in Canada made through the province’s licensed retailers and the OCS. With the growth of legal cannabis stores in cities, the hope for many stakeholders is that the illegal market will eventually become obsolete.
OCS data reported Ontario’s legal market sales accounted for 56.9 percent between September and December 2021.
(The Ontario Cannabis Store quartly report)
“The debate right now is there's still that challenge of having the illicit stores invisible or visible, but I still think there have been and there are legacy [businesses] who aren't unfortunately legal because of the margins, the costs it really takes to kind of bridge that gap,” Ford explained. “It's a big thing where I find not knowing your history before really can conflate or give you a misunderstanding of what the true agenda of cannabis is now.”
Ford said she believes the illicit market is still thriving because some people trust their sources, whether they are regulated or not.
“It's a legal substance nonetheless, whether, again, you're in the legacy or legal market, I think it’s just the range of options to sell and be able to sell safely and legally, could be a feasible way to really see that change with the illicit market.”
In past council discussions, the main focus around cannabis was not the legality of the products or negative connotations associated with it, but concerns about where the stores would be located, with fear of the city becoming saturated with cannabis storefronts. However, according to the staff report, based on feedback received from neighbouring municipalities that permit retail cannabis, clustering has not proven to be an issue.
That didn’t stop councillors from raising the same concerns on Wednesday.
“My concern is that the poor areas of the city with high rates of vacancy and lower rents are going to be inundated with these and I know this theory is let the stronger store win and it's going to weed itself out,” Councillor Carolyn Parrish said. “I'm opposed to it because of the clustering. I think the province has been very stubborn… because the large chains that run right across Canada, have the ability financially to overweigh all the little guys, all the independents who go broke.”
“Holding out for a little while longer, I do not think is a harmful thing. We will end up, I believe, having some changes happen from the province that allows us to put some zoning and put some measures in that would help safeguard our local businesses and this is really where I'm coming from, and why I'm certainly not going to be supporting this at this point,” Councillor Stephen Dasko said.
Other than deciding to permit or prohibit retail sales, current regulations give municipalities the least amount of power in implementation while upper levels of government call the shots. The federal government regulates the growing and licensing of cannabis, the provincial government/Alcohol and Gaming Commission of Ontario handles the retail licences and how it is sold, leaving cities simply with the yes/no decision to opt in or out of allowing the stores, but unable to dictate where they are located.
Mayor Bonnie Crombie has signalled her support for allowing legal cannabis retail within the city to foster its own local market to serve residents while creating jobs and helping grow the economy.
(The Pointer files)
“We've been holding out for control over zoning, control over clustering, control over where they're going to be located. The reality is we will not be given that ability to control, we will not be given that control from the province, nothing will change that, nothing is going to change,” Crombie argued.
“These illegal stores exist today. We have had no success from closing them down. The penalties aren't high enough, the police are frustrated and what the legal stores will do [is] cannibalize the sales of the illegal stores, give them competition and maybe drive them out of the market. That's what I'd like to see is that disruption occurring. That's what competition will do.”
AGCO senior communications advisor Raymond Kahnert previously told The Pointer that before issuing a licence to any operator, the AGCO undertakes a comprehensive assessment of the applicant and all interested parties, including police and background checks. He noted the AGCO “will only license applicants who meet all legal and regulatory requirements to ensure that all cannabis and cannabis-related products are sold safely, responsibly and in accordance with the law.”
The Cannabis Licence Act, which includes a regulation that sets out the AGCO’s authority in licensing cannabis retail stores in Ontario, permits stores to be located anywhere that other retail operations are allowed, provided the community or municipality “opted in.” While the “provincial legislation imposes no limit or caps by region. Beyond that, the AGCO has no authority or control over store locations,” Kahnert explained, “the proposed store locations must be compliant with the provincial school distance buffer, which is a minimum distance of 150 meters between cannabis retail stores and schools, as defined in the Education Act.”
Ford said she recognizes there can be saturation of stores, but that it still comes down to letting the market dictate its course.
“Hopefully next week, we can at least reiterate the concept of small business owners and independent stores. This is a conversation amongst the community of cannabis already legally, where we're having those discussions of making sure consumers understand why they may be paying that extra $2 [or] $3 on the same product they can get from a corporation [that] is able to afford that,” she said. “I think the saturation just comes down to maybe the urge a lot of eager entrepreneurs, business owners wanting to open up but within that, I know there are a lot of beneficial and crucial ones who will respect the plant, respect the community there and help build that community and really extend the culture and knowledge.”
Allowing cannabis retail to make its name in Mississauga, Ford said, will hopefully create more responsive insight into the benefits of legal cannabis. Heading into discussions next week, Ford said she is hoping council will recognize the benefits of opting in beyond just analyzing what the City stands to gain financially.
“For me at least, it's just really hammering that [concept of] independent small businesses. I think oftentimes working and having only worked for independent stores, you really do get lost in the chaos of such a big industry, despite independent stores making a majority of the industry so it's really having hopefully Mississauga understand the need of those passionate owners who are there every day, who are really trying to compete against big players in this market.”
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