Pot shops still popping up in Hamilton despite uncertainty
City estimates it will cost departments $1.6 million to implement official legalization of cannabis
“I imagine that the government is going to want to close us down because they’re going to want all the money.” FIONA KELLY
Manager, Royal Farmacy
IF YOU LIKEN the number of pot shops in Hamilton to the proliferation of Tim Hortons, you’re on to something.
So far, the city has identified 80 marijuana dispensaries.
The iconic coffee chain, meanwhile, notes it has 74 locations in Hamilton.
And dispensary operators are betting dollars to doughnuts — or joints — that demand will remain high for private outlets after Ontario’s official stores open later this year.
“If they think one store is going to shut them all down, they’re crazy,” Fiona Kelly, manager at Royal Farmacy, on Main Street East near Kenilworth Avenue, said Thursday.
So far, the province hasn’t announced any potential locations for an Ontario Cannabis Store in Hamilton, but the city is among the 29 municipalities expected to host one this summer.
By 2020, the plan is to have roughly 150 OCS locations across the province.
The quality and price in privatelyoperated dispensaries will overshadow anything government-run outlets can offer, Kelly said.
She and co-owner Michelle Freeland said they have a loyal clientele base of more than 1,000 and see about 120 people on a busy day.
Prices vary, with some products going for about $8 per gram and others for $15 per gram.
“We’re not here to just be illegal drug dealers. We’re here to help people,” said Freeland, who calls customers “patients.”
Bailey Thompson, an employee at another small east-end dispensary, said she has worked in the industry for about a year.
Thompson said that fact that some cannabis products, such as edibles, won’t be sold immediately in OCS outlets will turn off many customers.
As it stands, her dispensary is doing quite well, she said. “Once it actually picks up, 20 grand a day, easy.”
Thompson said she worked at a dispensary on Hess Street that did about $1,000 in sales every hour “give or take.”
But Kelly and Freeland say the powers that be will want Royal Farmacy and others like it out of business once the federal Cannabis Act takes effect in October.
“I imagine that the government is going to want to close us down because they’re going to want all the money,” Kelly said.
Money is definitely an issue for government as the budding regime takes hold.
In March, the province announced it will provide $40 million to municipalities from excise duty revenue over two years to help pay for the costs associated with the legalization of recreational pot.
Hamilton’s allocation is expected to be about $1.6 million, a city report notes. Staff estimate the “ongoing incremental costs” of $1.3 million plus a one-time price tag of $100,000 associated with legalization.
That includes anticipated rehabilitation costs of social housing units for smoke and mould estimated at $1.1 million. The bylaw department estimates it will cost $220,000 for beefed-up enforcement.
The $1.3 million, however, doesn’t include anticipated policing costs.
Hamilton Police Service spokesperson Jackie Penman said it’s too early to speculate on that “because we don’t know the impact of the new cannabis legislation.”
The province is covering the cost of training police officers to conduct sobriety testing and creating a cannabis intelligence centre. The federal government is also providing $81 million over five years across Canada for law enforcement.
Of the 80 dispensaries the city identifies in its latest report, 47 are still operating after 33 were shut down. Bylaw has issued 43 zoning charges, 29 business licence charges, 10 sign charges and 47 fees for re-inspection services.
“There are currently 21 locations under investigation. These are very fluid investigations as many locations closed after receiving a zoning notification, only to reopen in another location within a few days,” says the staff report, one of three reports related to pot legalization that will be discussed at city hall on Monday.
Penman said it takes about 10 to 15 hours for police to secure a warrant ahead of a dispensary bust, and another four to six hours for roughly six officers to conduct a search and do paperwork.
“It usually takes up to two days to sort, complete and submit the exhibits for court purposes. That’s time spent on one dispensary.”
Since 2016, Hamilton police have acted on about 50 warrants.
“What usually happens is once the establishment is shut down and the product is seized, the dispensary then reopens under new ownership and the process starts again,” Penman said.
Royal Farmacy has been busted twice — once just before Christmas in 2016 and again in February 2018, Freeland said. Each time, they managed to reopen pretty quickly but opted to stock a “minimal amount” of merchandise in case police seized their product again, she said.
Police laid drug-related and proceeds-of-crime charges, Kelly said.
“It was a $1,000 fine,” she said, referring to one bust. “But you are convicted ... you do have a drug charge.”
Kelly and Freeland argue the Ontario government should allow private dispensaries to continue operating alongside the government outlets.
“They could charge us a huge amount of money to operate here,” Kelly said.
In British Columbia, for instance, recreational pot is to be sold in public and private outlets alike.
Doug Ford, Ontario’s new premier, has said he’s open to the “free market” selling marijuana but has also stated he’s “focusing” on LCBOoperated cannabis stores.