Right now, one of the biggest challenges faced by Vancouver, Toronto and other Canadian municipalities is the rise of medical marijuana dispensaries. These storefronts claim to sell marijuana only to patients, but their businesses are nevertheless illicit because the only legal way for patients to buy their medicine is through Health Canada's mail-order system.

Vancouver tried to combat the proliferation of illegal marijuana retailers by licensing and regulating ones that met their standards of operation. Regulation started in the spring of 2015, when the city began accepting applications for licenses. But the vast majority of Vancouver's dispensaries - which could be as many as 160 - failed to meet those standards. So they were given six months to close their businesses or face fines of $250 per day.

That grace period ended April 29. CTV News reports that 22 stores have closed and 44 tickets have been handed out, but longtime activist and dispensary owner Jodie Emery says that she and other business owners plan to defy the bylaw and challenge the fines in court.

Toronto starting to face similar issues

Toronto is facing similar problems with approximately 60 dispensaries, which are mostly located in the downtown core. "We can't just have the Wild West," Mayor John Tory said last month during a press conference. But unlike in other cities, Toronto's municipal government doesn't plan to to raid or regulate dispensaries. Instead, they'll begin a crackdown by punishing all 60 or so locations with bylaw infractions.

"Our zoning bylaw does not permit medical marijuana dispensaries," said Mark Sraga, the city's Director of Investigation Services for Municipal Licensing and Standards. "Having [dispensaries] in a retail, residential, mixed-use environment is not what the federal government envisioned or entailed through [its medical marijuana] regulations."

Sraga told CBC News that the city will take the next six to eight weeks to investigate the dispensaries and issue warnings about the bylaw infraction before handing out fines. The maximum fine individuals violating the city's bylaws can receive is $50,000 while corporations can be hit with a fine of up to $100,000. But Sraga says dispensaries won't likely be hit with those tickets for their first offence.

Meanwhile, the federal government has announced that it will introduce legislation to legalize the possession, consumption and sale of marijuana for recreational use in spring 2017. The new bill could also allow medical marijuana dispensaries to operate. But as of right now, Ottawa tacitly supports Toronto's crackdown.

Prime Minister Justin Trudeau and Bill Blair - Trudeau's "point-man on pot" - have repeatedly said that prohibition will remain law until the government is ready to introduce the regulatory framework for recreational marijuana.

But until then, municipalities will continue struggling to tame the frontier of "gray market" cannabis businesses.

h/t Georgia Straight, Lift, CBC News, Toronto Star.