Jordan: Today we present the story of an illegal marijuana dispensary in Canada’s largest city, where legalization is going just great.
News Clip: It’s been an uphill battle for police and by law officers trying to shut down this chain of illegal pot shops, The Cafe, it was raided twice last week, as we’ve been reporting, and as you can see behind me, it’s back in business. It has become a common sight at cafe shops around the city, large concrete blocks blocking access to the unlicensed marijuana dispensaries. Okay, so every so often we are seeing a big black SUV stop in front of Cafe here and a group of people getting in and these are potential customers that are being shuttled to other Cafe locations.
Jordan: As you can see or hear nine months after we legalized it, black market for pot has not gone away. We’re not just talking about cafe, either. So why hasn’t it? What’s been missing in the government’s plan to regulate and tax the sale of marijuana, and their plan to eradicate those who are doing it outside of the law? Whether you want cafe to stay open or not, you have to wonder how much money is at stake here for it to be worth this monumental hassle to keep cafe open? Also, I’m just gonna ask it, why can’t the cops stop a bunch of pot dealers from opening up the exact same locations again and again and again, we missing something here?
Jordan: I’m Jordan Heath Rawlings, and this is The Big Story. Adrian Ghobrial is a reporter at CityNews in Toronto, where he has spent a lot of time on the marijuana beat. Hi, Adrian.
Adrian: Hello. Thanks so much, I have just a few stories here and there.
Jordan: So we’ll start with the focus of our attention today but there’s a much bigger discussion to be had here. So, first of all, for people who aren’t in Toronto, but might have similar things in their cities and towns, what are the Cafe Shops?
Adrian: Cafe is a brand, if you will, of four shops in the city of Toronto that have been making headlines recently. They…. when a lot of other shops have closed down; When I say shops were talking illegal dispensaries, they have been defiant, and they’ve been around for about three years when we saw a big wave of dispensaries move in prelegalization. Their,first flagship was on Fort York in City Place, which is for those who don’t live in Toronto is a dense neighborhood, one of the largest condo dwelling populations in the city of Toronto, and they’ve had a storefront there, they’ve moved to have one midtown, they’ve got a couple more uptown in the northwest of the city, and they have been operating with their own rules and regulations for some time now.
Jordan: And what are they like both on the outside and the inside? Because I think sometimes when we talk about dispensaries, we have an image in our head of like a shady little storefront that you walk into and some guy hands you some pot?
Adrian: For sure. No, these are slick operations, they are well put together. You go inside, you know, true to their name, especially now, I know they’ve done some renovations over the years. It has a real nice cafe feel to it, you know, nice lighting, nice light fixtures, your point of sale is on an iPad. It’s all very slick, very well operated, it’s not; doesn’t feel like you’re walking into some shady place, and the people that are visiting the illegal dispensaries are from all walks of life, anyone and everyone.
Jordan: So what was Cafe opened three years ago among hundreds of dispensaries that open and a lot of those are gone, what was supposed to happen to these dispensaries last October 17th when pot became legal?
Adrian: Well, they were supposed to, if you’re going to speak to the city, and to the province and the feds, they’re all supposed to shut down and they were supposed to work within the rules that each province had put in place and here in Toronto, that meant shutting up shop, and you’re only opening up if you are granted a license and go into this lottery that they have here in the province to get one, many did. A place like Cafe though has said no, we’re not gonna work by those rules.
Jordan: Why did they do that?
Adrian: You know, I think it could be two fold. You know, be careful how much I’m gonna speak for them. But even just from the social media comments, I see, for example, on stories that I’ve done when it pertains to cafe a lot of people are, like, good for them. You know it’s a broken system is the overwhelming feeling from lots of people in the province of Ontario. You know, only a select few have so far gotten the license, there is a massive demand for this, and so, you know, they’re gonna stay open, then on the flip coin or the flip side of the coin, they’re making boatloads of money. The City of Toronto says just from what they’ve been able to tell when they’ve gone in and shut down these shops repeatedly, from what they can tell from the point of sale each day, each one of these locations is doing 30 to $50,000, and that’s just what they can tell I have a sneaking suspicion that that might be a little bit more, you know, this isn’t a…. they’re not operating, you know, Visas and, you know, taxes, like there’s a lot of cash exchanging hands here that might not be punched into a register I think it would be fair to say.
Jordan: So what happened right after legalization to these shops? What did police do when they just decided to stay open?
Adrian: Yeah, well police moved in, and they moved in aggressively even it was kind of was interesting, even before legalization, well before, we’re going back three summers plus. I spoke to the chief of police when we had I think the count was somewhere north of 200 illegal dispensaries in Toronto, and I was working a weekend and I was at a charity event where the chief was at, and I went there to speak with Toronto’s chief of police Mark Saunders, and I said, you know what are you going to do? And his answer at the time was, well, really, what’s the point of going in and raiding these shops if the charges are gonna be thrown out in court once legalization happens, and if people in their community have a real issue, and a real complaint, then contact us and we’ll act accordingly, but otherwise it’s a hands off approach. We now know what he said on that day to me did not happen. A couple months later, police went in aggressively, pre legalization and started shutting down shops and then once legalization happened, again another wave of busts, and this is Toronto police going in and they’re banging down doors, they’re dragging people out, and they’re placing people under arrest and heavy fines, its provincial offenses were handed out and a lot of places, you know, they almost gave some places a bit of a warning hey, you have until you know, day X, get out of town. Forget it. Stop what you’re doing, and most places did somehow.
Jordan: And what did police then do to the ones that haven’t? Like let’s say a month or two after legalization, so last December, January, what were they doing to Cafe?
Adrian: It’s my understanding that they continue to go and try to shut down these places. And police have almost taken a back seat to how enforcement is taking place when it comes to Cafe. The city of Toronto has gotten their bylaw, municipal license and standards, the bylaw division has been granted special powers by the province so they can go in and hand out provincial offenses. So these bylaw officers can act as police, they can hand out tickets, they just can’t cuff, arrest and detain. So police go, a couple officers go as almost the supporting casts, if you will and these bylaw officers, there’s a team of nine of them have gone in and they’ve shut them down once and then the cafe opens again, and they’ve shut them down again, and it keeps on opening. They’ve tried to bar the doors, they’ve changed the locks, they’ve put up steel doors, and each time Cafe has found a way to breach these locks, break down these doors, in some cases, they’ve been kicking them down, in other cases they’ve been going through adjoining units, through the drywall and coming in and reopening that’s what the city will tell you.
Jordan: So what kinds of justifications has Cafe given when they’re shut down to say no you can’t do this?
Adrian: It’s my understanding they’ve been trying to use a bit of a loophole, and they’ve had a resident living in each one of these locations. So you can’t go in, you can’t bar the doors, you can’t change the locks because there’s someone living in it. There’s also been the argument that what the City of Toronto has been trying to do could be a fire hazard. Should there be a fire in the location and Toronto Fire can’t get in, you know, because there’s been a massive steel door or bars or worse, 4000 pound concrete blocks placed in front of the entrance and those blocks are pretty interesting.
Jordan: Yeah, we’re gonna talk about them in just a minute, but I want to sort of go back to the idea of enforcement in the months afterwards, so I know that a lot of places like you said, packed up and went home. Some including cafe, stayed open and there are some that were kind of like Cafe. There was one near my house that your colleague Shauna Hunt covered, in which they re-opened, they were closed, they reopened, they were closed, and I think it was the third time when they were finally like all right, you know what? It’s not working and now its for lease. How many of these dispensaries are left, like how many have stuck it out after, like 4 or 5 closures? Do we have any idea?
Adrian: The city of Toronto believes there’s around a dozen, 10 or 12 still operating in the city. I would challenge that number, though, because I know that there is lots of dispensaries that are operating in the back of what appears to be legitimate businesses in the front, that maybe aren’t even a coffee shop and if you know if you live in the neighborhood, you go by, there’s a guy at the front door who just appears to be hanging out, and you’re ushered through a curtain and into the back. On Legalization Day I went and visited one of those, and was brought into the back, and and and spoke with the owners there, so the city says they know of 10 or 12. I don’t think there’s 100 still in the city, but I would guess that there’s still dozens.
Jordan: Why do you think Cafe has kind` of become the face of this resistance to legalization?
Adrian: The creative ways, really when it comes down to it, the creative ways that they have reopened, you know, in defiance and because it’s a slick operation, they have a large amount of people going each and every day. They’ve got a lot of support, they’ve done some smart marketing, and some people, you know, right or wrong love seeing the middle finger being, you know, thrown towards the authorities and saying, you know what? You guys have legalized marijuana, but we’re still working, you know, it’s still almost like prohibition. Things haven’t really; It’s a two tier system, a broken system, call it what you will and, you know, god damn it, we’re going to get our weed and people kind of have rallied around that in the creative ways that cafe, has reopened time and time again. Now the City of Toronto, when speaking with them last week I said, do you know who’s operating cafe? You know, because they’re, you know, the city will say, you know, they’re facing big fines, and every time they go in, you know, people that are inside the shop selling weed are issued a fine, it could be $10,000, it could be more but have they actually found the people operating? They think they have an idea who it is but the top person operating cafe, or the people operating cafe from above have never been issued a fine.
Jordan: So what happened over the past week? Because this all kind of came to a head over the last seven days.
Adrian: Yeah, it really did, you know the city on and they will tell you that they don’t believe any other municipality has ever done this, they brought in these 4000 pound concrete blocks, and they place them in front of each of the cafe locations. In front of the windows, in front of the front doors and they said, you know what? We’re taking a stand, this isn’t happening anymore, and cafe went at one of their locations on Harbord Street, and brought in machinery in the middle of the night and moved the blocks, moved them to the side, and were open for business again.
Jordan: So they clearly had to go and get this machinery and like…
Adrian: Which speaks to how organized they are a little bit, you know, not everyone can, you know, within 12 hours find the proper machinery to lift these 4000 pounds.
Jordan: It’s not your neighborhood weed dealer.
Adrian: No, this is not, and the scene outside of this one that they reopened it was like a street party. You know, I went to one of the other closed down locations at Bloor and Ossington, and they had people outside of that one going, you know, sorry just wait a second, we’ve got a shuttle coming for you. The shuttle is a black car service, you’re getting picked up in a Cadillac, or a luxury suburban, they’re driving you from the northwest of the city down to Harbord Street. You hop out, you go inside, you get your weed , you come back out, your black car service is waiting for you to drive you back to your neighborhood. And then; and it was so packed on Harbord Street, it was like, Saturday morning at the deli counter. They’re screaming out the door number 13, number 13 because they can’t; they don’t have enough room inside for everyone so they’re taking numbers and you go inside and, you know, when we’re talking about sales during any given day, I don’t know for sure what they sold that day, but I’m going to guess it had to have been close to, if not surpassing six figures.
Jordan: So the obvious question that occurs to me is why weren’t the police there then shutting that down?
Adrian: And that’s a great question, and I can’t speak for police, and speaking with the city last week, you know, they had said that they are now taking the lead. Their bylaw officers are taking the lead, and police are in a supporting role because police resources are strapped. Now they went in and they closed down Harbord again, that location that they had reopened with these big blocks and moving them aside.
Jordan: Did they move the blocks back?
Adrian: That appears to be what’s happening, and the city says that they have other means to…. that they’ve got a couple other tricks up their sleeve. Now what we saw this weekend in Toronto outside of the cafe locations, was cafe saying, okay, we can’t get in to our shop, we’re going to sell on the sidewalk right outside of our stores where people are showing up to come and purchase. So yesterday at multiple locations they had individuals standing outside with an iPad, I know City Place for sure they had someone standing outside with an iPad, and you would place your order with that individual, they tell you to wait 15 minutes, someone and I was told up in a condo in the area of City Place was bagging the weed, they run it down from the condo 15 minutes later, and you get your weed off.
Jordan: Isn’t that like coming full circle back to like selling bags of pot on the street? That this whole legalization thing was supposed to end?
Adrian: It is completely come full circle, and that is; and yesterday police did then step in, and eight people were arrested and charged, and they were detained because this wasn’t bylaw officers showing up, handing out very expensive tickets…
Jordan: Right, it’s selling drugs on the street.
Adrian: It’s selling drugs on the street, and people in the city place neighborhood area residents were ticked off. I was sent one video of a woman who was filming them selling the marijuana on the street. She’s screaming it’s illegal, everyone else is going it’s not illegal, you know and you’ve got these tensions boiling over in neighborhoods, and it’s like, where does this end? Where do we go from here?
Jordan: Well yeah, I guess I want to know if we’re ever going to get to the point where we probably envisioned we would when we legalized pot, where it’s available enough and cheap enough and regulated enough that you don’t need these dispensaries. I mean, you’ve talked to folks in the black market since legalization. How are they doing? Is it just Cafe?
Adrian: It’s not just Cafe, and last week I sat down with an underground drug dealer who moves large quantities of marijuana, some for these illegal dispensaries, some for his own personal clients, and he said his business is booming. It’s only gone up since legalization, where someone might have come before and picked up a couple grams, they’re now coming in ordering an ounce, because they can, or because there’s more of their friends smoking it. He says some of his larger clients that are distributing on a bigger scale where they would have come and ask for 2-3 pounds, there now asking for 10, 20, 30 pounds, which is a lot of marijuana.
Jordan: Right. Why is that?
Adrian: Well, when it comes to you know, the legal marijuana dispensaries in the city, the legal means to get it, whether you’re going online through the provinces, websites or you’re going to one of the legal dispensaries, my black market underground dealer says they can’t touch my prices. Right? And it’s the same thing with Cafe. Why go somewhere where you’re going to spend $70-$80 when you can go elsewhere and spend $30-$40? It’s kind of simple economics, and, you know, my underground dealer says, listen, you know, if they want to curb this, if they want to get rid of the black market, if we want to really start collecting taxes, they need to open up more of these shops, to more individuals, drop the rules and regulations about, you know, having to bid on a shop and only opening up, you know, a handful in a city of 3,000,000 plus and maybe you’ll get some competition, maybe you’ll see prices come down and the feeling is, is the way things are operating right now, it’s just embroiled in the black market. You know, if you’re the authorities, yes, you’re shutting down these storefronts, you’re having very public battles with an illegal dispensary like cafe, but you know, but behind the curtains there’s lots of other places still operating, there’s lots of high level drug dealers still operating, and for all intensive purposes, you know, the authorities are almost chasing shadows, they don’t know who these people are, and they’re not your classic drug dealer, you know that you might have in your mind. These are, you know, people from all walks of life.
Jordan: When you talk to some of the folks kind of operating on the fringes, or on the black market, do you get the sense, or do they even say that if the regulations were opened up that they would go into business legitimately, that they would like to be a part of that?
Adrian: It’s kind of a split from those I’ve spoken with. Some say yeah, we would like a fair shake on this, we would like to be part of it, we would like to contribute, we would like to pay taxes, we’d like to be able to freely sell our marijuana online because that’s where a massive market is that we have even touched on yet, and then others are like, not so sure. Have the cafe people, the people running Cafe applied for a legitimate license with the province of Ontario? When they have the opportunity to, I don’t believe they have, they may have, but I don’t think so.
Jordan: Do we know what comes next if the government is considering opening it up more widely, or if they’re considering cracking down? Do we have an idea of where they’re going with this? Because they can’t be happy with how this is playing, either.
Adrian: Yeah, they can’t be. I don’t know what their next step is. I heard an interesting thing from the city of traumas bylaw department. Their chief operating you know, investigative director said he’s angry at the feds. He says that they legalized marijuana, and opened up the floodgates before there was enough supply to properly supply the market at these legal dispensaries, at the provincial websites, and he believes that’s one reason why people are being pushed to the black market. There’s just not enough stock, you know, in the legal realm, you know, do they need more growers? Do they need more to open up the rules and regulations for people growing marijuana? I know one issue when it comes to the amount of stock that we have in the country as a whole, is a lot of people; You know growing marijuana a) is not an easy thing to do and a lot of really good growers have criminal records, because they were growing for medicinal purposes way back when, and they got busted, and they got rounded up so their expertise can’t be used. And you’ve got, you know, people, scientists what not, you know, working on the legal realm of things and maybe they were unable to grow as much, I’m not sure.
Jordan: Finally, the police crackdown this weekend, they arrested eight people from Cafe. It’s Monday now, around noon that we’re talking to you, is Cafe gonna reopen again? Will they be selling it today? Tomorrow?
Adrian: I wouldn’t be surprised if they are reopened by tonight, or tomorrow. Maybe they find a different store front and start operating, maybe they’re not in the business of moving 4000 pound blocks, or selling on the street corners but you know, they’ve made so much money, illegal dispensaries have made so much money, what’s to stop them from going across the street and renting out another space? Or buying a space or, you know, contacting their clientele and supplying them in a different manner? You know, you can go on weed maps, for example, and you can you know, they’ve got their menu and prices on weed maps, there’s a slew of other delivery services that you can get in the city of Toronto and across the country. I see them perhaps moving in a different direction to evade authorities continue to make money and continuing to supply the demand that is just growing each and every day.
Jordan: Adrian Ghobrial, City News Toronto where legalization is going real well. Thanks, Adrian.
Adrian: My pleasure.
Jordan: That was The Big Story, you can find more at thebigstorypodcast.ca, we go all the way back to October of last year. You will hear exactly what we thought was going to happen after legalization, and how wrong we were. You can also talk to us @thebigstoryfpn on Twitter. You can find us, and all our brother and sister shows on frequencypodcastnetwork.com, and of course everywhere you get podcasts on Apple, on Google, on Stitcher, on Spotify, we are there and you can subscribe for free. We’d love a rating, we’d love a review. Thanks for listening. I’m Jordan Heath Rawlings, we’ll talk tomorrow.
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