Bill Blair - the Canadian government's point man on legalization - has offered another glimpse of what the recreational market for marijuana might look like a year from now. And it could be bad news for the "gray market" dispensaries in cities across Canada.

We already know that Prime Minister Justin Trudeau wants to legalize cannabis to cut street dealers and gangs out of Canada's marijuana market. But the main industry players have been left to wonder what that means until the government sets up its promised task force.

One such player is the network of licensed producers (LP's), growers who legally cultivate cannabis that medical marijuana patients can buy through Health Canada's mail-order system. The other group is that of the illegal marijuana dispensaries, unlicensed storefronts that sell cannabis illicitly in cities like Vancouver and Toronto.

Based on Blair's most recent remarks, it looks like the LPs will be part of the legal market and dispensaries will get pushed out. While speaking at a regulation conference in Toronto on May 24, Blair praised the LPs for their strict standards and practices. Once a sceptic that marijuana could be grown safely, Blair said, "I have come to believe it is possibleā€¦for marijuana to be produced in a way that maximizes safety for Canadians."

His conversion happened after he toured Bedrocan, an LP in Toronto that impressed Blair with their quality controls. "The regulations are really quite extraordinary," he said.

Rigid regulations have given rise to illegal market

But those same regulations have also hindered the LPs ability to compete with illegal dispensaries, who regularly outsell and undercut their legal counterparts because they don't have to pay the same licensing and regulatory fees that LP's do.

They also offer greater accessibility, allowing patients to get in-person consultation at a store instead of ordering online and waiting for their medication to arrive in the mail. That's why Federal Court Justice Michael Phelan called dispensaries "the heart of cannabis access" when he ruled that the country's current medical regime was too restrictive in a landmark court decision earlier this year.

But Blair wasn't so complimentary toward the illegal industry. Indeed, he's lumped them in with the sorts of drug cartels that the country hopes to snuff out with regulations.

"The current licensed producers are competing with people who don't care about the law, who don't care about regulations, don't care about kids, they don't care about communities, don't care about health of Canadians. They're pretty reckless about it. And so they're selling anything to make a fast buck before we get the regulations put in place."

Dispensaries see themselves as a solution, not a problem

Contrary to Blair, advocates for dispensaries insist they're invested in helping patients more than making money. "I believe in what I do," Abi Roach told Civilized. Roach is the founder of the Cannabis Friendly Business Association (CFBA) - an advocacy group representing dispensaries and other stakeholders in the marijuana industry. She believes that dispensaries offer patients the service that they need.

"People do not want their cannabis through the mail," says Abi Roach. "They want the human interaction...They want to talk to someone about the actual product. They want to know how it works...You can't just have flower and a little bit of concentrate because people medicate in many different ways. People need edibles, or pills or creams and whatever else. And the LPs just can't provide those services legally."

People like Roach have no intention of giving up their grassroots businesses and letting LPs take over the industry.

"Making sure that small, independent businesses are kept alive is the core of our movement," she told Civilized. "It's what brought us to this point. So we can't just throw up our hands in the air right now and say, 'Alright, come and take everything that we've worked for over the last 20 or 25 years.' "

And they're prepared to defy regulations that would cut them out of the industry. "In order for the craft industry not to get pushed out by the LPs and the government, we have to put our feet in the ground with some concrete and just stick it out."

So Blair's remarks might be the opening salvo in a long battle over cannabis regulations.

h/t Financial Post, Globe and Mail, Georgia Straight

banner image: Flickr / David Topping