More than three years after recreational cannabis was legalized in Canada, nearly 100 municipalities across Ontario, Manitoba and British Columbia still ban pot shops — and many are reluctant to loosen restrictions. The result is a striking dichotomy: some cities are filled with candy stores, sparking concerns of a bubble, while a city beyond the city, there could be no retail presence. In Toronto, for example, there are about 450 cannabis shops and dozens more retail applications are under consideration, according to recent figures from the provincial regulator. In nearby Mississauga – the country’s seventh largest city – there are none. Critics of the patchy retail landscape say it slows down the shift of consumers to legitimate sellers – and therefore helps the illicit market to persist longer. Cannabis purchases from off-licence shops drop in 2021: BC study How Canopy Growth, Canada’s hemp dream star, fell from grace As the legal regime took off, Ontario, Manitoba and BC gave municipalities the option to opt out of allowing stores. In Ontario, 66 municipalities fall into this camp, including Oakville, Vaughan and Richmond Hill. About 2.5 million people, or 17 percent of the province’s population, live in these places. Meanwhile, 27 communities in B.C. – a mix of cities, towns and First Nations – do not allow cannabis stores, along with six in Manitoba. The status quo could be maintained for a while longer in some areas. In Mississauga, where councilors have twice rejected cannabis stores, another vote is unlikely until a new council is elected this fall, Mayor Bonnie Crombie said. “This council has since voted twice on this issue, and I wouldn’t bring it up to them again,” said Ms Crombie, who is in favor of the shops. “I have no reason to believe they would change their minds.” He added: “Our board tends to be very cautious.” For many local politicians, the problem is that they want additional powers in the industry. In Ontario, municipalities are not allowed to pass laws that distinguish the use of land or buildings for cannabis from other uses. Stores can be located anywhere other retail activities are permitted, and municipalities cannot put a cap on the number of stores allowed within their jurisdiction. The only restriction is that cannabis shops must be located at least 150 meters from schools. In Whitby, just east of Toronto, that’s not enough. Elected officials would like to control the number of stores, their locations and their hours of operation. “I believe the decision that was made was and continues to be the right one for our community,” said Mayor Don Mitchell, adding that the city council is not considering choosing. Other provinces have taken a more flexible approach to regulation. Some local governments in B.C. have enacted laws banning cannabis stores, while others are still accepting applications but denying all they receive, said Chris Donnelly, a spokesman for the province’s Ministry of Public Safety and Attorney General. Richmond and Surrey are the largest reserves in BC, with a combined population of about 780,000. However, there are other limitations. North Vancouver has limited its number of permitted stores to six, with the last of them set to open in February. As of late 2021, Burnaby had the same cap and limited them to government-run stores. In Manitoba, the six municipalities that voted in 2018 to ban the local sale of cannabis, including the towns of Steinbach and Winkler, south of Winnipeg, are continuing their bans, said Lisa Hansen, spokeswoman for the province’s Beverage, Gaming and Cannabis Authority. Saskatchewan also initially gave municipalities the option to opt out, and White City, a town outside of Regina, still does not allow cannabis stores within its jurisdiction. The Saskatchewan Liquor and Gaming Authority was unable to confirm whether other municipalities were exempt prior to publication. Across the border in Alberta, municipalities have more powers than in other provinces to control the approval of retail cannabis stores, including the ability to create regulations about when legal cannabis can be sold and set distance requirements between stores. In the Northwest Territories and Yukon, all private cannabis retail establishments seeking licenses must apply to territorial liquor boards, which approve their requests on a per-store basis. In Quebec, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island, cannabis can only be purchased at stores operated by the provincial government. Certainly, recreational users living in retail free zones have other options. The Ontario Cannabis Store – the Crown agency that is the province’s only wholesaler – has a delivery service. Other retailers in Ontario are allowed to make deliveries starting in 2020. Packages must be accepted in person by a person 18 years of age or older. Despite this choice, it appears that cannabis users are generally willing to shop in stores. Orders through the OCS website account for just 4 per cent of total Ontario retail sales. Municipalities in Southern Ontario that have chosen to participate or not have cannabis stores within their jurisdiction Note: Gray areas include First Nations, Provincial and National Parks, and places for which there is no evidence THE GLOBE AND MAIL, SOURCE: ALCOHOL AND GAMING COMMISSION OF ONTARIO Municipalities in Southern Ontario that have chosen to participate or not have cannabis stores within their jurisdiction Note: Gray areas include First Nations, Provincial and National Parks, and places for which there is no evidence THE GLOBE AND MAIL, SOURCE: ALCOHOL AND GAMING COMMISSION OF ONTARIO Municipalities in Southern Ontario that have chosen to participate or not have cannabis stores within their jurisdiction THE GLOBE AND MAIL, SOURCE: ALCOHOL AND GAMING COMMISSION OF ONTARIO Note: Gray areas include First Nations, provincial and national parks and places for which data is not available Some shoppers just drive to the next town. Raju Saini, owner of Piffingtons Cannabis Co., which has three locations in southern Ontario, said at least 15 per cent of his sales come from people who live in non-retail zones. “We have customers coming from Oakville and Mississauga as they come through,” said Mr. Saini, whose stores are in Kitchener, Milton and Brampton. “They want us to be their regular supplier.” Legal operators are steadily increasing their market share in Ontario, but illegal sellers still account for more than 40 per cent of provincial cannabis sales, according to OCS estimates. Mobile illegal dispensaries, which often deliver to customers, appear to be flourishing. A 2021 report, prepared for the Peel Police Services Board, said there were between 100 and 150 of these dispensaries in the area. (Peel Region includes Mississauga, where cannabis shops are banned, and Brampton, where they are not.) “People are still consuming cannabis,” said Omar Khan, senior vice president of cannabis retailer High Tide Inc. and former Chief of Staff to the Ontario Minister of Health and Long-Term Care. “If they don’t have access to legal and controlled products, they will have access to uncontrolled illegal products.” There is some debate, however, about the extent to which the legal market can drive out illegal sellers. Toronto, despite its high concentration of legal shops, is buzzing with mobile illegal pharmacies. These sellers have a clear advantage: They can sell cheaper and more potent pot than legal sellers, and many have branched out into other psychoactive products, such as psilocybin mushrooms. Citing cost and convenience, many long-time users have not made the switch to legal suppliers, said Kenneth Lester, an assistant professor at McGill University’s Cannabis Research Center. Of the illegal traders he talks to, “almost without exception, they haven’t really seen any drop in business,” he said. “People don’t change their habits that much.” Professor Lester said bigger regulatory changes – such as lifting drug strength limits – were needed to increase the legal market’s share of cannabis sales. Indeed, marijuana producers have called on the federal government to eliminate limits and reduce excise taxes that hinder their ability to compete on cost. Despite their initial reservations, 11 municipalities in Ontario have reversed course and decided to allow cannabis stories. It’s an important move: Once a city opts in, it can’t opt out. Lakeshore, a town near Windsor, made this choice in 2020 after public consultation and observation of development in nearby areas. Now, Lakeshore has four stores serving a population of just over 40,000. Mayor Tom Bain said the city would like even greater powers – particularly over the distance of stores from schools – but acknowledged the challenge of giving too much freedom to cities. “I could see a lot of problems if there was too much individuality between municipalities,” he said. “Some could look at the complete opposite, and some could over-regulate and make everything too difficult.” Sean O’Meara, a city councilor in Oakville, has pushed for cannabis stores but has not found support from his council members. Cannabis is “legal in Canada, so I’m still not exactly sure why we don’t allow it in Oakville,” he said. Pointing to nearby Burlington, he said the presence of cannabis shops “hasn’t changed the fabric of this community one iota.” Your time is valuable. Deliver the Top Business Headlines newsletter to your inbox morning or night. Sign up today.
