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Toronto wants more money from the province to deal with a growing number of illegal cannabis stores


The head of Toronto’s licensing and standards department says the city needs more money to enforce the law against a growing number of illegal cannabis stores operating there. 

In an interview with City News, Carleton Grant, Executive Director, Municipal Licensing and Standards at City of Toronto, says that while many illicit cannabis shops shut down voluntarily in the first few years of legalization, new illegal stores have been popping up again. 

Grant says there are currently 53 illegal, unlicensed cannabis stores now operating in Toronto and 215 legal ones (The AGCO currently lists 204 stores as being authorized to open in Toronto). 

The comments come following a request by Toronto City Council, asking the Province of Ontario  to undertake a comprehensive review of the provincial Cannabis Control Act, 2017. The motion says a review is “Imperative to ensure the effective regulations and enforcement of cannabis-related matters” in Ontario.

Municipalities need more tools and resources to address these illegal cannabis businesses, continues the motion, including “exploring options to strengthen enforcement measures, increase penalties for non-compliance, and improve collaboration between municipalities and provincial authorities

Because of the criminal nature of activities in these stores, which can include weapons and large quantities of cash, Grant says he is uncomfortable sending in his bylaw officers to address the lack of municipal licenses held by these businesses. 

“What we’d like to see is the temporary funds that the province provided to the city in the first two years of the program are reinstated.”CARLETON GRANT, EXECUTIVE DIRECTOR, MUNICIPAL LICENSING AND STANDARDS AT CITY OF TORONTO

“The concern is this is illegal activity, this is criminal activity. When our officers are going into these stores, there’s a presence of guns, large amounts of cash. There are things happening that officers really shouldn’t be involved in. 

“We do go with the police. Police are best suited to deal with this type of illegal and criminal activity, and I think that’s where this is likely to go.”

However, Grant also says that law enforcement has a limited budget and other priorities and needs additional funding from the province to enforce the law. 

“What we’d like to see is the temporary funds that the province provided to the city in the first two years of the program are reinstated,” continued Grant.

“If the city were to receive its appropriate allocation of funding from this particular program, it would assist in enforcement, it would assist in cracking down on illegal storefronts.”

Grant says he’s calling on a review of the provincial Cannabis Act, with an eye on the province providing additional funds to cities like Toronto to address the growing number of illegal cannabis stores. 

In 2018, Ontario set aside $40 million over two years to help cities manage the implementation and oversight of cannabis legalization. The first $30 million was distributed in 2019, with $10 million set aside for unforeseen costs. Ontario also invested $3.26 million to support municipalities through enhanced enforcement against illegal cannabis operations.

This plan, called the Ontario Cannabis Legislation Implementation Fund (O.C.L.I.F.), was to be used for increased enforcement (e.g. police, public health and by-law enforcement, court administration, litigation), increased response to public inquiries (e.g. 311 calls, correspondence), increased paramedic services, increased fire services, and by-law/policy development (e.g. police, public health, workplace safety policy).

Ontario has distributed four payments from this fund, with cities receiving at least $5,000 each payment. Toronto received just over $3 million for its first payment, $3.7 million for its second, and $1.5 million for its third, and just last month received the fourth and final payment of $747,954 for a total of just under $9 million.

The cost of policing and enforcement has been a major part of municipal budgets all across Canada, with a significant portion of cannabis tax revenue and other related funding going to police, enforcement, fire and emergency services as it relates to cannabis legalization. This is in addition to costs associated with developing and maintaining municipal zoning rules and bylaws.

Toronto police asked for an additional $1.5 million from the city in 2021 to address the cost of cannabis-related enforcement in the department.

Toronto Police Services’ (TPS) 2022 operating budget noted that the department had a balance of $3 million in reserve, with an expected $500 million in funds withdrawn that year. It was projected to have just over $1 million in reserve for these funds in 2023 and just over $500,000 in the beginning of 2024.

Those numbers were updated in the 2023 budget to an expected $136,000 after withdrawing nearly $2 million. 

When negotiating for a 75% share of all federal cannabis excise taxes collected, provinces argued that the costs of addressing the new cannabis laws in Canada would largely be borne by themselves, cities, and law enforcement. 

According to the Federation of Canadian Municipalities (FCM), municipal administration and local policing costs linked to the legalization of cannabis will total $3-4.75 million per 500,000 residents.  

As some examples of that spending and activity, public news reports show that Toronto police spent more than $350,000 placing bricks in front of several illegal dispensaries’ locations that refused to close, even following raids and product seizures in the summer of 2019, or about one-third of what they say was their cost for the first year of legalization. 

Neither TPS nor the city of Toronto were immediately available for comment. 

Previous requests for information on this subject from Toronto Police Services resulted in StratCann being told that media would need to file a freedom of information request to get information on how the department has spent the allocated cannabis funds.  

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