Mississauga business community welcomes jobs, revenue from legal cannabis; 4 months since City opted in illegal market lingers  

Four months after the City made the move to allow legal cannabis sales within its boundaries, the Mississauga retail community and collection of Business Improvement Areas believe the decision to get in line with most other cities across Canada adds another layer of opportunities in the country’s seventh largest municipality.  

A canvas of local associations found BIAs in Cooksville and Clarkson supportive of new business opportunities through legal cannabis sales which they hope will finally drive out an illicit market that has thrived during the past four years. 

The decision by local council members to close Mississauga's doors to the legal market after legalization in 2018 created a perfect bubble in Peel’s largest city for the illicit market to flourish. But while two of its BIAs are in favour of the move to turn around the previous council position, a business community in Mississauga’s Malton area still fears the possibility of streets becoming saturated by cannabis operators. 

In January, the Mississauga Board of Trade (MBOT), which represents businesses across the city, called on council to revisit the previous decision when local elected officials prohibited cannabis retail in the community, twice voting against it, resulting in the absence of such storefronts in Mississauga. However, at least one illegal shop flourished, with no regulations controlling it and police in a constant cycle of shutting it down only to have it reopen. Finally, in April, after weighing all the factors — store clustering, public safety and the illegal market — the tables turned and Mississauga put an end to its ban on cannabis retail in an 8-4 vote. 

Prior to the decision, the Clarkson Village BIA submitted a letter to City Council in support of permitting cannabis retail. A similar letter was presented to council in 2021, asking members to vote in support of retail cannabis. Following council's approval in April, Mississauga's first retail cannabis store opened in the Clarkson area in May — Pop's Cannabis, which the BIA has welcomed with open arms, a spokesperson wrote in an email to The Pointer. 

“Our BIA would welcome legal retail cannabis stores in Clarkson Village. We believe this will result in local job creation, investment in commercial properties that are currently vacant, and an increased flow of people to our business area,” the April letter from Jamie Bay, chair of the Clarkson BIA, read. “We are not in favour of forcing residents into neighbouring municipalities to purchase legal products. Every time someone leaves Mississauga to shop, there is a risk of losing other business as well—putting all local businesses at a disadvantage.”

While council spent over four years kicking around the idea of allowing cannabis retail in Mississauga, the legal market and the industry around it flourished in neighbouring communities like Brampton and Toronto, sending millions in revenues from Mississauga residents to the local economies of other cities.

Councillor Dipika Damerla, who twice voted against allowing legal cannabis over concerns the illegal market would prevent stores from succeeding, spearheaded the move to permit legal cannabis in Mississauga through a motion presented in April. She said the choice was no longer between “no stores and legal stores,” but between “illegal stores and legal stores.”

Prior to opting in, Mississauga was the largest municipality in Ontario without legal cannabis stores within its city limits. According to the Alcohol and Gaming Commission of Ontario (AGCO) the province, as of January 16, had 1,640 retail cannabis shops, up from 1,460 reported in March 2022 by the Ontario Cannabis Store (OCS). None were in Mississauga, but Brampton hosts 50 and Toronto is home to 431.

Since opting in this past spring, several applications for cannabis locations have popped up across the city, with five already authorized to open. 

Since the City of Mississauga opted in to allow cannabis retail in April, over 20 applications have surfaced, five of which have already been authorized to open. (Open the AGCO map here.) 

Some councillors resisted legal cannabis, fearing the city would become overpopulated by retailers, especially in inappropriate areas such as school zones. Municipalities can use bylaws and business licensing to limit where stores can operate but activity and trends observed in some larger cities show cannabis stores have taken over empty storefronts, with many neighbourhoods in places like Toronto featuring multiple stores.

Without stores operating inside the city, Mississauga was missing out on significant revenues in both the local economy and through lost taxes, licensing fees, and the provincial funding that was initially distributed to all municipalities which opted in upon legalization. A June 2021 staff report indicated if Mississauga council reversed its decision, the city could bring in an estimated $74 million each year and gain thousands of jobs. 

Echoing previous concerns from council about the lack of control over where the stores can be located and how many will crop up in the community, Malton BIA general manager Natalie Hart said the primary worry for the BIA was that municipalities do not have a say on the locations—beyond areas such as schools zones and near public parks—with clustering being a particular concern. She said the BIA would like to see municipalities have more authority over where stores can be located, with “those decisions…happening at a local level.”

“Our board felt strongly that that should be something that was within the municipality’s ability to control to make sure that there's not too many of the same industry being within the same space,” she told The Pointer. “We feel that there's not enough power being given to the municipalities to have input on these decisions at this particular moment,” especially since many of Malton’s retail spaces are managed by individual owners.

“It's not the same landlord for an entire strip plaza, each of those units are owned individually. So potentially, you could have four different companies negotiating with four different landlords for the same units and in one plaza. Each one is owned by somebody else. So the same applies if you had two or three vacancies, they could all end up being cannabis stores and none of those three landlords… which would be very different from if you had a plaza that was owned by one landlord who would know that they were dealing with three.”

The AGCO, which approves retail licenses in Ontario, has been heavily criticized by municipal officials in the past for approving licenses in inappropriate locations, but AGCO senior communications advisor Raymond Kahnert previously told The Pointer the commission undergoes a “rigorous licensing and eligibility review process for all cannabis retail stores,” before issuing a license to any operator. This, he explained, includes a “comprehensive assessment of the applicant and all interested parties, including police and background checks.

“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.”

Despite these regulations in place to control the market, it has not stopped illegal shops from operating in Mississauga. Located in the heart of the city, Weed Releaf — an illegal storefront in a strip plaza along Hurontario — has operated for years, offering residents 24/7 access to a range of illegal cannabis products. Since 2019, Peel police have repeatedly entered the shop and shut down operations. Warrants have been issued, illicit products have been confiscated and fines have been levied. But the store continues to resurface shortly after being ordered to close and paying the fines.

“This operation has effectively cornered the illegal cannabis market in Mississauga and its central location provides easy access to consumers,” the April report to staff revealed. By allowing cannabis retail within Mississauga, council members were hoping the legal market would drown out illicit sales, but the illegal storefront continues to dominate the Cooksville core. 

Weed Relief has been operating illegally for the past several years, despite various efforts from Peel Police to shut down the illegal dispensary, which has left many residents in the neighbouring area frustrated.

(Alexis Wright/The Pointer) 

The operation of the store has ignited anger and frustration among many, including Mark Tyler, executive director of the Cooksville BIA. But in the absence of strong laws to combat the illegal market, there is little authorities can do. 

While the Cooksville BIA battles the obstacles of being exposed to the illicit market in its business catchment area firsthand, Tyler does believe opting in will be positive for the business dynamic in Mississauga. He said the illegal store location and its ongoing operation was the main driver for the BIA endorsing the motion, which he said impacts Cooksville businesses significantly.

“We have a pretty ugly issue with an unlicensed dispensary in our business area that impacts our businesses significantly,” Tyler told The Pointer. “Despite the efforts of local authorities [and] the province, nobody's been able to shut that [illegal dispensary] down. And it's not just a quiet little dispensary, there’s a lot of human activity in front that's disruptive not only for local businesses but for customers.

“It's been raided and locked up and hours later it's opened up. You can walk by that parking lot and you'll be solicited with people and intimidated. It's not that easy to take care of an operation like that.”

Tyler said while it may take some time, he believes eventually the legal cannabis storefronts in Mississauga will act as a solution to push out the illegal operations through market behaviour and competition. According to data from the Ontario Cannabis Store (OCS), Ontarians chose to purchase more than half of their cannabis through legal channels, as the province’s legal market share sat at 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 transacted through the province’s licensed retailers and the OCS. 
 

One of the newly opened legal cannabis stores in Clarkson, Buzzed Buds.

(Alexis Wright/The Pointer) 

“People think it's legal cannabis. It's not, it's an illegal dispensary serving, selling drugs that are not regulated for health and safety reasons. And it's frustrating because we know cannabis is a legal drug and the selling and dispensing of it is illegal.”

According to Peel Police, the force has “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.” However, despite these limitations, under federal regulations and Ontario’s Cannabis License Act, Weed Releaf or other owners who have previously been fined for illegal cannabis sales can be shut down under existing laws. One problem is that property owners who are aware that stores are being used for illegal operations, do little to evict them, as these leases can provide considerable revenue.

The Pointer previously reported that federal regulations make it clear that new legal businesses must “have not failed to comply with any Act of Parliament (other than the Excise Act, 2001) or of a provincial or territorial legislature that deals with the taxation or control of alcohol, tobacco products, cannabis products, or vaping products or any regulations under it in the past five years,” meaning illegal operations like Weed Releaf will be ineligible to apply for a new licence.

Under Ontario’s Cannabis Licence Act, an applicant is not eligible to be issued a retail operator licence if “there are reasonable grounds to believe that the applicant will not carry on business in accordance with the law, or with integrity, honesty or in the public interest” or if “a person... has been convicted of or charged with an offence under this Act, the Cannabis Control Act, 2017, the Cannabis Act (Canada) or the regulations made under any of them.”

Tyler said the legal industry’s success in Mississauga will likely come with some growing pains but has the potential to enhance the retail mix in the area. With vacant spaces throughout the Cooksville BIA, as post-pandemic impacts and the ongoing transition of e-commerce continue to disrupt the bricks-and-mortar commercial landscape, he said the new stores will not only contribute to City Hall’s coffers, they will benefit the health of the area’s business core.

Email: [email protected] 

Twitter: @mcpaigepeacock

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