Raju Saini at Piffingtons, a cannabis retail store he owns in Milton, Ontario, on August 3. Tiana Martin/The Globe and Mail
More than three years after recreational cannabis was legalized in Canada, nearly 100 municipalities in Ontario, Manitoba and British Columbia still ban marijuana shops — and many are reluctant to loosen restrictions.
The result is a striking dichotomy: Some cities are teeming with pot shops, prompting fears of a bubble, while one city at the top may have zero retail presence. Toronto, for example, has about 450 cannabis shops and dozens more retail applications under review, according to the provincial regulator’s latest figures. Nearby Mississauga – the country’s seventh largest city – has none.
Critics of the patchy retail landscape say it slows down the switch of consumers to legitimate suppliers – and thus helps the illicit market hang around longer.
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While the legal regime was underway, Ontario, Manitoba and British Columbia gave municipalities the choice to opt out of allowing convenience stores. In Ontario, 66 municipalities fall into this camp, including Oakville, Vaughan and Richmond Hill. These places are home to about 2.5 million people, or 17 percent of the province’s population.
Meanwhile, 27 communities in British Columbia — a mix of towns, small towns and First Nations — don’t allow cannabis stores, along with six in Manitoba.
The status quo may hold for some time in some regions.
In Mississauga, where city 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 supports the shops. “I have no reason to believe they will change their mind.
She added: “Our advice is very cautious.”
For many local politicians, the problem is that they want additional powers over industry. In Ontario, municipalities are not allowed to pass by-laws that distinguish the use of land or a building for cannabis from other uses. Stores may be located anywhere other retail operations are permitted, and municipalities may not place a cap on the number of stores permitted within their jurisdictions. The only restriction is that cannabis shops are at least 150 meters from schools.
In Whitby, just east of Toronto, that’s not enough. Elected officials would like control over the number of stores, their location and opening hours.
“I believe the decision that was made was and continues to be the right one for our community,” Mayor Don Mitchell said, adding that the City Council is not considering getting involved.
Other provinces have taken a more flexible approach to regulation.
Some local governments in British Columbia have passed bylaws banning cannabis shops, while others are still accepting applications but denying everything they receive, said Chris Donnelly, spokesman for the province’s Department of Public Safety and attorney general.
Richmond and Surrey are the largest territories in British Columbia, with a combined population of about 780,000. However, there are other limitations. North Vancouver limited its number of permitted stores to six, with the last of them opening 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 Office of Alcohol, Gaming and Cannabis.
Saskatchewan also initially allowed municipalities to opt out, and White City, a town outside of Regina, still does not allow cannabis shops within its jurisdiction. The Saskatchewan Liquor and Gaming Authority was unable to confirm whether other municipalities remained excluded prior to the time of publication.
Across the border in Alberta, municipalities have more power than in other provinces to control the approval of retail cannabis stores, including the ability to create bylaws about when legal cannabis can be sold and set requirements for distance between shops.
In the Northwest Territories and Yukon, all privately owned retail cannabis stores seeking licenses must apply to territorially governed liquor boards, which approve their applications for each store. In Quebec, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island, cannabis can only be purchased at stores operated by the provincial government.
Of course, recreational users who live in non-retail areas have other options. The Ontario Cannabis Store – the Crown agency that is the province’s only wholesaler – offers a delivery service. Other retailers in Ontario are permitted to make deliveries as of 2020. Packages must be accepted in person by a person 18 years of age or older.
Despite this option, it appears that cannabis users generally tend to shop in stores. Orders through the OCS website account for only 4 percent of total retail sales in Ontario.
Municipalities in Southern Ontario that have chosen or declined to have cannabis stores within their jurisdictions
Note: Gray areas include First Nations, Provincial and National Parks,
and places for which there is no data
GLOBE AND MAIL SOURCE: ALCOHOL AND GAMBLING COMMISSION OF ONTARIO
Municipalities in Southern Ontario that have chosen or declined to have cannabis stores within their jurisdictions
Note: Gray areas include First Nations, Provincial and National Parks,
and places for which there is no data
GLOBE AND MAIL SOURCE: ALCOHOL AND GAMBLING COMMISSION OF ONTARIO
Municipalities in Southern Ontario that have chosen or declined to have cannabis stores within their jurisdictions
GLOBE AND MAIL SOURCE: ALCOHOL AND GAMBLING COMMISSION OF ONTARIO
Note: Gray areas include First Nations, Provincial and National Parks and places for which there is no data
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 percent of his sales come from people who live in no-retail zones.
“We have customers who come from Oakville and Mississauga as they pass through here,” 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 traders still capture more than 40 percent of the province’s cannabis sales, according to OCS estimates.
Mobile illegal dispensaries, which often deliver to customers, appear to be thriving. A 2021 report prepared for Peel Police Services Council 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 regulated products, they will have access to unregulated illegal products.”
However, there is some debate about the extent to which the legal market can drive out illegal sellers. Toronto, despite its high concentration of legal shops, is teeming with mobile illegal dispensaries. These sellers have a clear advantage: they can sell cheaper and more potent pot than legitimate sellers, and many have branched out into other psychoactive products, such as psilocybin mushrooms.
Citing cost and convenience, many longtime users have not switched to legal suppliers, said Kenneth Lester, an assistant professor at McGill University’s Cannabis Research Center.
Of the illegal dealers he spoke to, “almost without exception they haven’t seen any drop in business,” he said. “People don’t change their habits that much.”
Prof Lester said greater regulatory changes – such as removing restrictions on drug potency – were needed to increase the legal market’s share of cannabis sales. In fact, marijuana growers have called on the federal government to remove restrictions and cut excise taxes that hinder their ability to compete on costs.
Despite initial reservations, 11 Ontario municipalities have reversed course and decided to allow cannabis stories. This is an important move: once a city opts in, it cannot opt out.
Lakeshore, a town near Windsor, made this choice in 2020 after public consultation and monitoring of implementation in nearby areas. Lakeshore now has four stores serving a population of just over 40,000.
Mayor Tom Bain said the city would still like more powers – particularly over the distance between shops and schools – but acknowledged the challenge of giving cities too much freedom.
“I could see a lot of problems if there was too much individuality between municipalities,” he said. “Some could completely look the other way, and others could over-regulate and make everything very difficult.”
Sean O’Meara, an Oakville councilman, has pushed for cannabis stores but has not found support from his fellow council members.
Cannabis is “legal in Canada, so I’m still not quite sure why we don’t allow it in Oakville,” he said.
Pointing to nearby Burlington, he said the presence of cannabis stores “hasn’t changed the fabric of this community one iota.”
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