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How cannabis legalization caused an illegal weed boom

Legal pot was supposed to mean the end of the black market, but business is great for dealers like The Girls

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ALEXA CUDE
  • ALEXA CUDE

Liz and Hannah are known to their customers as The Girls. On a Sunday afternoon, in their apartment in Halifax, they wear ladybug socks, stir candy cane hot chocolate and answer the door to conduct a mellow drug deal.

"What can I get you?" Liz asks a new customer, who was referred to The Girls through word of mouth.

"I've got 60 bucks, so what do you have?" says the customer.

"I'll show you what we've got going."

Liz pulls out Ziploc freezer bags containing two strains of cannabis called "green crack" and "chemo."

"What kind is the chemo?" the customer asks.

"It's probably one of our most popular," says Liz, explaining that it was originally developed for cancer patients in British Columbia.

"I will get a bit of the green crack and the BC," the customer decides. "Half and half."

Liz weighs and bags the order totalling six grams, decorates the baggies with princess and animal stickers and accepts the cash.

When the federal government legalized recreational pot, one of the stated goals was to "deter illicit activities." The black market was worth nearly $6 billion last year, Statistics Canada estimates, which is a quarter the size of the legal market for alcohol. Licensed retailers were supposed to push it out. Penalties for violating the Cannabis Act can be up to 14 years in jail.

However, licensed stores with supply shortages, inconvenient locations and no edibles have enabled dealers to stay in business. Nova Scotia is one of the provinces in which the government has monopolized pot, sold through the Nova Scotia Liquor Corporation. The Girls say they don't want to be criminals, but they are passionate and knowledgeable about the drug, and the province has created no space for them in the legal market.

Policymakers specifically set out to eliminate the underground trade, but many Canadians still fancy forbidden fumes.

"People in our network are extremely busy," says Liz, referring to illegal growers and dealers in and around Halifax.

"Things are poppin' off right now," says Hannah.

Liz: "Yeah, things are poppin' off right now."

The Girls started their business in 2016, and are willing to sell weed to almost anyone of legal age. They smoke or ingest the drug multiple times per day themselves, and they advise customers on which strains can help them focus or sleep—"not that I think I know more than a government of Canada scientist," says Hannah, "but I kind of do."

The black market includes many of the very people who pushed for legalization in the first place. Advocates pressured the government with coalitions, petitions and civil disobedience. They have gone to protests. They have gone to prison.

"The fact of the matter is, there has been so much activism to get us to this point," says Liz, "and those people have been left behind."

The lure of illegal weed

The Girls share a cell phone, and a buzz means business. One client works as a customer service representative for the NSLC but chooses The Girls regardless. Other days, The Girls say a father leaves his child in the car during his purchase. The Girls refuse to sell to minors, but one mother buys weed for her daughters. "She always comes in her cute mom attire," says Liz. For several months, Liz adds, a Costco employee would finish his nightshift and run his weed errand early every morning. "We'd still be in our nightgowns."

The United Nations prohibited cannabis worldwide in 1961, but jurisdictions have been legalizing it for medical and recreational purposes ever since. New Mexico was the first state to legalize medical cannabis in 1978, and Canada followed in 2001. Recreationally, Washington State and Colorado legalized the drug in 2012, and the following year, Uruguay pioneered such legislation at a national scale. Prime minister Justin Trudeau promised to legalize weed during his 2015 election campaign, but Canadians did not wait for him to deliver. Last year, nearly five million Canadians purchased pot from the black market, according to Statistics Canada. They spent an average of $1,200 each.

After pot was legalized last October 17, this black market has survived not just because of price—the NSLC's weed ranges from $6.30 to $15 per gram, while The Girls often sell products for $8 per gram. Rather, many customers turn to the black market for convenience. The NSLC enables Nova Scotians to order weed online, but it only sells the drug at 12 stores in the province, with just one located in downtown Halifax. The province has 13 times as many operational lighthouses.

"This is an existing market—you have to compete with it if you want to beat it," says Michael Armstrong, an associate professor of business at Brock University. Legalization has made cannabis more socially acceptable, but at the same time the government-run weed retailers can't satisfy the demand, a combination that Armstrong says is good for dealers like The Girls: "I almost think that's a window of opportunity for the black market."

Armstrong expects the illicit trade to thrive for one year. In 2019, the federal law is expected to be amended to permit the sale of edibles, and distributors might add more conveniently located stores. A spokesperson for the NSLC says once the corporation has a secure supply of weed at the current stores and an established sales history, "we will evaluate our operations."

The Girls use their profits to pay bills and cover the cost of their own weed consumption. By day, they both work office jobs, and they do not worry about getting addicted. "Of course I could stop," Liz says. "I'm just grouchy for three days."

They don't name their suppliers, much as they refuse to let their real names be used for this story out of fears of jeopardizing their jobs, but they are able to give customers deals such as five grams for $40. They stopped accepting e-transfers so that, if they were audited, the Canada Revenue Agency wouldn't be able to find records of their transactions.

One evening, they also sell homemade pot-infused pies. They both try one to determine the potency, then set the price at $12 per pie.

For as long as federal legislation prohibits edibles, underground dealers have an exclusive market on treats. The Girls have made popcorn with cannabis coconut oil, mixing store-bought coconut oil with their own cannabis brew. One weekend, Hannah's sister makes cannabis oil in a Crock-Pot, straining out the plant residue with cheesecloth and then infusing the pies.

The Girls also sell an illegal form of cannabis concentrate called "shatter." It appears like a gel, which they heat in a glass rig and inhale. The shatter they sell is 64 percent THC, three times as potent as the strongest weed sold at the NSLC.

The government outlets have an aesthetic similar to Apple stores, with tablets on countertops and products behind glass. Some smokers prefer the less sterile environment of The Girls' living room, where the dealers have hosted a customer appreciation party and where Hannah, in between transactions, eats nachos with vegan cheese.

"Going to the liquor store feels so blah," says Hannah.

"It is so blah," says Liz.

Quality is another motivator for black-market customers. The products sold at the NSLC are packaged in a way that customers cannot touch or even view the buds. "We always have the fresh stuff," says Hannah. And the government product? "It's like...crusty."

The NSLC does not comment on crustiness, but a spokesperson says any unhappy customer can return or exchange the product. Storefronts also prevent customers from encountering drug dealers and other clients who could be dangerous. When asked about threatening customers, The Girls think for a moment. Eventually, Hannah says, "Well, there was Scary Mary."

Clientele

Scary Mary was a neighbour of The Girls' during university. They had recently begun dealing the drug from their apartment. In her backyard, drunk in the middle of the day, Mary once asked Liz to sell her weed. Liz agreed. They later heard shouting at Mary's house, then an ambulance. Liz was home alone in the basement when Mary knocked on the door. Liz turned off the lights, but Mary kept knocking. Liz finally opened the door, and Mary accused her of selling weed containing fentanyl.

"Not chemically possible," says Hannah. "You can't just sprinkle fentanyl on top of weed and smoke it."

The Halifax Regional Police says it has not received any reports of seizures from cannabis laced with fentanyl. Regardless, The Girls say they have occasionally felt anxious and paranoid about customers, and early on, they visited the hunting section of Canadian Tire.

"We bought a lot of weapons when we started the business," says Hannah. "We bought a big machete knife and a can of bear spray."

They have not required any self-defense.

Liz: "I would definitely consider myself a pacifist."

Hannah: "Yes, me too."

Liz: "For the record, our weed does not contain fentanyl."

The Girls have had one close call with the police, when an ex-boyfriend threatened to snitch on them. The police didn't confront them. A spokesperson for the city's police force says its enforcement will focus on impaired driving, people who sell weed to minors and people "whose illegal activities are contributing to violence in our community."

The Girls have blacklisted certain customers, but not because they were dangerous; they were too emotional—particularly men. Instead of simply buying weed, many male customers show up to talk about their personal problems.

"The emotional labour is the biggest problem with the guys," says Hannah. Liz adds, "We're not marriage counsellors."

When smokers can't pay with money, The Girls accept food, art and chores such as cleaning out the fridge or shovelling the driveway. They have traded weed for a bag of vegan cookies and for a homemade dreamcatcher.

The phone buzzes, and Liz checks the message. "It's my mom."

Born to be mild

During university, The Girls had medical prescriptions for cannabis to treat anxiety. To save money, they began buying it in bulk. They initially catered to queer individuals who didn't feel safe buying weed from other parts of the black market. Liz describes many dealers as "weird guys who make you go inside the car and turn around the corner."

Over two years, The Girls say they built a customer base of nearly 100 customers. Upon legalization, "we thought we were going to pack it in, but I guess we're playing it by ear," says Liz. She wants to be a lobbyist—"we love a good rally or protest"–and the duo wants to urge the province to permit people like them to be private retaillers. "So many times, we've looked at each other and said, 'We need to write a letter.'"

The rush to legalization

Across the street from Parliament Hill, in September 2017, a committee of politicians heard 100 witnesses in five days. As the Liberals scrambled to write cannabis legislation, Conservative member Colin Carrie told the boardroom, "there's a great frustration on the opposition side that the government wants us to jam this into one week."

Pressed for time, politicians had to write rules on everything from the font on packaging to the height restriction of homegrown cannabis plants. (They chose four metres merely because most municipal bylaws only permit backyard fences to be four metres high. They wanted residents to be able to block out the sight of a neighbour's pot plants.)

Police chiefs asked the government to delay legalization, and one year later, many of them still don't have strategies for diminishing the black market. Quebec only has 22 stores in the province. Ontario still has no storefronts but accepts online orders, and in November, many Ontarians couldn't even receive those orders—Canada Post was on strike.

When Washington voted for legalization in 2012, the state delayed it for one year.

"That was a key lesson learned for us," says Mikhail Carpenter, communications director of the Washington State Liquor and Cannabis Board, "not being afraid to say, 'We're going to hold off on this.'"

The state also delayed issuing licenses for seven months. As Carpenter says, "ultimately getting it right was more important than getting it quick."

Canada got it quick, but in part, got it wrong, say advocates including Dana Larsen, who ran a medical dispensary in Vancouver from the 1990s until last fall. Although Larsen only spent one night in jail for civil disobedience, he describes the experience of many of his peers who ran dispensaries: "They suffered degradation, humiliation, loss of access [to weed], court battles."

The fight paid off for Canadians, but not for Larsen. Medical dispensaries made it nearly impossible for law enforcement agencies to enforce prohibition of recreational weed because they would sell to people without prescriptions. When the government could no longer enforce prohibition, Larsen says, legalization was more practical.

"I've been in this crusade for almost 30 years now," Larsen says. "I like to think that I'm one of maybe a dozen people in Canada who, if we didn't exist, cannabis wouldn't be legal."

Yet, under the legal system, Larsen cannot get a license to sell weed. Some people blame cannabis advocates themselves for not pushing hard enough to prevent government monopolies. Large producers relentlessly lobbied the Liberal government for licenses, but grassroots voices were not as organized.

"I hate to say it: There was just a lot of smoking weed and a lot of talk," says Justin Loizos, a former medical dispensary owner in Toronto. He says when he helped push for medical pot legalization in 2001, he and his friends managed to raise $1 million for legal fees to take the government to court: "I truly feel, at that time, there should've been [a lobby effort] behind the recreational people." Like Larsen, he hasn't been able to get a license for his dispensary to sell either medical or recreational pot. "We're left behind here."

Resentment

On a Wednesday night in November, for a dozen people in Halifax, the activity of choice is "pot yoga." They smoke, do guided stretching and get happy vibes for $15 at The High Life Club, a lounge for members and guests to watch stand-up comedy and do other activities—but not buy pot. The club sells cannabis accessories and Twinkies, but the government controls pot in its production, processing, transportation, delivery, possession and sale.

"It's a plant, for Christ's sake," says Chris Henderson, the club'sowner, arguing that the legal market excludes cannabis connoisseurs like himself. "Some people are getting in there though, just gotta beat a few millionaires and have never gotten in trouble in your entire life."

The NSLC does not sell to people under 19, but at one dispensary in the HRM, if an 18-year-old with a medical prescription walked in, "we wouldn't be too fussy about it," says a 20-year-old employee who requests to remain anonymous. "If there was a child with epilepsy, I guess we could ring them in through their parents."

Customers ring a doorbell to get buzzed inside. "A lot of the people that were already smoking weed didn't like the idea of the government capitalizing on weed," the employee says. "A lot of them are refusing to even give the NSLC a chance."

Dreams

Liz ignites a blowtorch, lights a rig with shatter and inhales the THC. While the NSLC closes at 10pm, The Girls enable customers to pick up weed in the middle of the night.

"We know what it's like to be desperately trying to get your weed," Liz says. "We're going to go a mile for you." She values the drug so much that she deems it a requirement of her potential boyfriends. "What's important to me now in a partner is that he has to use cannabis—because it's such a big part of my life."

When the government first promised to legalize pot, The Girls expected to be allowed to open a lounge for their community to relax and learn about weed, similar to the hub of pot yogis but with pot sales, too.

"It's unfortunate that all this great knowledge and talent is wasted," says Hannah. "It's perfected and known best by people who are considered criminals."

They considered opening the lounge right inside their home, where they've got baking in the making and shatter on a platter.

"At one point, we had big dreams, big plans," says Liz. "But now, it seems so out of reach." a

Meagan Campbell is a Halifax journalist. She can be reached on Twitter @MeaganCampbel12.

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