Despite almost six years of legal, regulated cannabis in Canada, illicit online retailers continue to prosper, seemingly with minimal interference from federal authorities. 

These unlicensed sellers operate without regulation, with limited retail expenses, and almost no tax obligations compared to the rigorous requirements expected of licensed stores. 

Industry players see this long-standing problem and continued proliferation as a threat to an already beleaguered sector that is doing its best to adapt to a minefield of challenges. 

“There has been little to no enforcement, whether that is law enforcement or through website owners and registrars,” said Adrian Cheek, Lead Researcher for Coeus, a data company that examines all types of illicit online activity. 

Cheek added that this lack of enforcement is not a new kink in the system but something that has gone almost unchecked since legalization in 2018. He explained that there are several different reasons for this, the first being that enforcement of these businesses is a federal mandate with any budget mainly committed to cracking down on illegal brick-and-mortar stores. 

Although it can be easy to point the finger at law enforcement, Cheek feels this issue does not necessarily fall entirely on their shoulders. He pointed out that the people who do the work are often bound by instructions and mandates that have come from other powers. 

He has spoken to law enforcement agencies across the country, and says there’s an overwhelming sense of frustration coming from them. They understand what can be done but are not given the tools, finances, or proper support. 

“Disrupting the online business itself is actually relatively simple,” he said. “You could literally do this overnight and probably take down 70% of the online activity, from a cannabis perspective, in Canada.” 

He added that the problems mainly lie in jurisdictional issues because many online stores don’t indicate where they are based. Further, only Quebec and Ontario have an actual cannabis task force designed to deal with illicit online activity. 

“It’s not to say that law enforcement doesn’t talk to each other, they absolutely do,” said Cheek. “But those communications are limited, the information-sharing is limited, and obviously if there are no resources in the province they’re talking to, then essentially nothing gets done.” 

The issue is not only relegated to Canada either. The same problem exists across the border in the United States, with a similar lack of online enforcement. Cheek gave an example of some data Coeus has collected over the last few weeks regarding New York-based online cannabis sales. When raids have occurred, and people have been arrested, there is clear evidence that products are moving across the border. 

“New York State, for example, has its own cannabis task force but they have exactly the same issue, whereas they are only mandated to tackle brick-and-mortar. It actually states that in their legal documentation.” 

What about law enforcement and government? 

StratCann reached out to the RCMP for comment on their practices in these areas. 

“In keeping with its mandate, the RCMP’s Federal Policing program investigates, and disrupts the most serious and complex criminal threats to the safety and security of Canadians and Canadian interests, including TSOC (transnational and serious organized crime) involvement in the illegal cannabis market,” said Robin Percival, a spokesperson for the organization. 

Percival added that the policing responsibility is a collaborative effort for different facets of law enforcement in Canada. “Federal, provincial, and municipal police services share responsibility to enforce the Cannabis Act. As such, an integrated response to criminal involvement in the cannabis market is essential to uphold public safety.” 

As for any steps being taken outside the police system, the Ontario Cannabis Store is doing what it can to inform the government of the necessity of enforcement against unlicensed online cannabis ventures. 

“The OCS mandate does not include enforcement against illegal cannabis sellers. However, the OCS works continuously with other government stakeholders to ensure they understand the challenges facing the cannabis industry and the importance of enforcing the law against illegal cannabis operators,” said Solomon Israel, Senior Communications Advisor. 

Israel added that another mandate of theirs is to improve public awareness of the risks of illicit cannabis. They have completed several educational campaigns in the past, and have one planned for the near future. “We will be launching an exciting new educational campaign this month to coincide with the sixth anniversary of cannabis legalization.” 

What can be done? 

One of the more obvious ways Cheek believes will help this issue would be for the Canadian federal government to mandate a budget for online enforcement of illegal websites. The lack of funding is one of the wrenches in the whole system when it comes to policing. He added that the system is “malfunctioning from top to bottom,” and the people who can actually do something about it are mired in red tape. 

“From an evidence-gathering standpoint, the evidence is already there, it’s in your face,” he said. “[These illicit websites] openly sell the products, they are not on provincial lists, often they are selling scheduled drugs alongside [cannabis], and they are providing payment information. All of that information is obtainable in less than a minute on the website.” 

Cheek added that identifying the websites and actively working to take them down is the first step, but a consistent, sustained effort needs to be implemented in order to actually make an ongoing difference.

“If you took 700 websites down today, 450 would probably come back within 24 hours,” he said. “If you have the right components in place to be looking for those 450, [they] could be very quickly disrupted again.”