Grow Industry

Marijuana prohibition is destined to end. Who will become the Seagrams of weed?

Photography by Grant Harder

• 5,817 words

Photograph by Grant Harder
Budding Enterprise With such potent strains as God’s Treat, Canadian entrepreneurs are poised to take on Big Tobacco when pot goes legit.

A few years ago, the man from First Quality Bags noticed something puzzling in his sales figures. His family’s brand of heavy-duty oven bags—perfect for “roasting, steaming, boiling, or freezing meat and vegetables”—seemed to be selling unexpectedly well in one specific market at one specific time of year: northern California in the fall.

The First Quality Bags man isn’t a radical. He is a middle-aged salesman who wears golf shirts neatly tucked into pleated khakis. So when he learned that Californian pot growers were buying his bags by the hundred to store and transport large quantities of marijuana during the fall harvest, it gave him pause. Then he did what any warm-blooded businessman would do in troubled economic times: he embraced the new market with open arms.

When I met him last May, he was hawking his wares at the Treating Yourself Expo, a world-renowned medical marijuana trade show held at the Metro Toronto Convention Centre. The smell of pot was in the air, drifting over from the “world’s largest vapour lounge” in the corner, and wafting out of the Mason jars of high-quality medical marijuana on display at the various booths. “We just make an excellent bag,” he said modestly, while a convention-goer holding a newly purchased vaporizer examined his sales materials.

Along with the dozens of vendors like the man from First Quality Bags—workaday entrepreneurs selling fertilizers, grow lights, industrial trimming machines, and other products on the margins of the booming marijuana industry—the expo had attracted a who’s who of the international cannabis community. There was the Dutch contingent, including the owner of the Green House, a café where celebrities like Bon Jovi and Rihanna reportedly hang out when they’re in Amsterdam. There were the Californians from DNA Genetics, the company that helped bring West Coast marijuana strains to the world. And, of course, there were Canadian notables like Vancouver activist Jodie Emery, whose husband Marc Emery, a.k.a. the Prince of Pot, was famously extradited to the United States for selling cannabis seeds.

The fact that they were all mingling in the same studiedly corporate environment that welcomed G20 delegates a few years earlier reflects the strange juncture the Canadian pot industry is at. Marijuana has been a major component of the economy for years now, creeping into polite society even while the laws have lagged behind. Despite the Conservative government’s new mandatory minimum penalties for possession, the gap between the letter of the law and what enforcement will tolerate has never been wider. Meanwhile, the evolution of the medical marijuana system has brought some small measure of legitimacy to the entire industry. South of the border, where anti-drug rhetoric has traditionally been fiercer, recreational pot use is now legal in two states, and initiatives are under way in many others. With legalization or decriminalization already in the platforms of both the Liberals and the NDP, a simple change of government could abruptly spell the end of Canada’s nine-decade marijuana prohibition.

As was the case when the alcohol prohibition of the 1920s was repealed and rum-runners stepped out of the shadows and into respectable wealth, when this era comes to a close billionaires will be made. The people at the Treating Yourself Expo are all keenly aware of this past. They know they are experiencing the rarest of opportunities: the chance to capitalize on a popular product as it makes its once-in-a-lifetime transition from the back alleys to the marketplace. The question everyone is grappling with is how. How do you turn your grey market operation into a legitimate company? How do you build the strong foundations of a business now, when the rules keep changing? And, no mere afterthought, how do you stay out of jail in the meantime?

Last November, after a trans-Canada flight, a nauseating Greyhound bus ride, and a drive through the orchards and lakes of the Okanagan, I found myself sitting in a Tim Hortons in a town I promised not to identify, waiting for a man who asked me not to use his last name.

I had met Matt at the Treating Yourself Expo, where he was promoting his company, BC Bud Depot, producers of medical marijuana and marijuana seeds. He had entered a few new strains in the cannabis competition: Sweet Island Skunk and Optimus Prime, and Shiatsu Kush, which he had picked up from underground growers in Japan who claimed it “worked all the shiatsu regions of the body.” As with any new product, successfully releasing a new strain of pot requires considerable buzz, and winning a couple of prestigious trophies was a good place to start.

Matt was dressed in a black hoodie with a pattern of gold marijuana leaves. He is thirty-six years old and balding, soft spoken, with just a hint of the stereotypical stoner’s nasal drawl. When I asked if we could chat somewhere quiet, he grabbed a beer from his booth, poured it into a paper coffee cup, and joined me at a table away from the crowds.

BC Bud Depot is one of Canada’s most successful seed companies—perhaps the most successful, though in an industry not known for meticulous bookkeeping it’s difficult to judge. Matt estimates that he sells about 65,000 seeds a year, in a process best described as quasi-legal. BCBD cultivates its seeds in facilities across British Columbia, ships them to the Netherlands, and then sells them through its online catalogue from a houseboat in Amsterdam. For $90, an amateur horticulturalist anywhere in the world can go online and buy a packet of twelve seeds of BC God Bud, the company’s most popular strain.

Matt has more or less conquered the grey market by pushing his company to the edge of what the law will allow. Did he think about what would happen to him when pot became legal? “What happened to Seagrams when Prohibition ended? ” he asked, grinning. “It did pretty well, I think.”

There are certainly parallels. Like the marijuana ban today, the prohibition against alcohol—much stricter in the US than in Canada—did not eliminate the drug. It just created a grey market with shortcuts and loopholes, easily exploited if you were someone like Samuel Bronfman, a canny Canadian businessman who wasn’t afraid to get his hands dirty. The Bronfmans were hustlers, Russian Jewish immigrants who set up a string of “boozariums” along the Saskatchewan–North Dakota border, ferried alcohol across the Detroit River, and shipped it into the US aboard schooners. In 1928, they expanded their empire by purchasing Seagrams, the Montreal-based maker of such popular brands as Seven Crown. When Prohibition ended, they were in the perfect position to solidify their hold on the market, and Seagrams became the largest distilling business in the world.

For today’s pot producers, the Bronfmans’ hustler-to-tycoon story holds obvious appeal. Like so many of the industry people I spoke to, Matt was convinced he could become the Seagrams of weed. He laid it out for me: with less regulation, he would bring his operation home from Amsterdam, open more facilities, and apply his years of experience to a lucrative new market. “BC Bud Depot’s already a household name,” he said, perhaps a touch optimistically. “It’s worldwide. When the government finally decides to legalize it, they’re gonna need the expertise we can provide.”

An event organizer interrupted us with the results of the competition. Sweet Island Skunk had come in a disappointing third in its category, and Shiatsu Kush had not even placed. Matt accepted the news with equanimity. There were other shows, other strains. Business was good. He finished his beer. “You should come down to my place,” he said. “Check out one of the grows.”

Photograph by Grant Harder
Blunt objective Matt sells 65,000 pot seeds a year, quasi-legally. He competes in the Super Bowl of pot.

The day I flew into Vancouver, the local pot community was in a stir. Colorado and Washington State had just voted to legalize marijuana—the biggest breakthrough yet in the anti-prohibition movement. For many Canadian activists, it felt like a landmark victory that would push the cause inexorably forward. Jodie Emery, who had worked hard to get the law passed in Washington, had saved a copy of the Seattle Times announcing the decision. “When I saw the headline ‘Pot’s Legal,’ I cried,” she told me.

For others, though, the news was bittersweet. The same week Coloradans were officially allowed to possess up to six marijuana plants, Stephen Harper’s mandatory minimums came into effect, meaning that a Canadian with the same haul could expect six months of jail time.

It felt like a strange reversal of the natural order. In the ’60s, American draft dodgers settled in the Kootenays, bringing with them a countercultural attitude and a whole bunch of weed. By the early ’90s, guys like Matt, the rebellious son of a Vancouver lawyer, were cultivating plants in ramshackle operations. For small-time growers, ventilation was poor, fertilizing systems were experimental, and electrical set-ups were haphazard. “You could set fire to your house if you weren’t careful,” Matt remembers. But as the market became more sophisticated, so did he and his friends. They developed a loose collective of pot growers, trading clones among themselves, passing along particularly good strains, and working to breed and refine others. “Our network grew, and the next thing you knew we were supplying growers all over BC,” he says.

When American news outlets began warning of a powerful new strain called BC Bud—supposedly more potent than Mexican varieties—Matt took advantage of the branding opportunity. BC Bud Depot launched in 2003 with a splashy ad in High Times, the industry’s flagship magazine, and a website welcoming buyers to purchase seeds. A year later, Matt wrapped his favourite strain, God Bud, in plastic wrap, stashed the bundle in some computer speakers, and hopped on a plane for Amsterdam, where he entered it in the Cannabis Cup, the Super Bowl of pot. His unexpected win there (alongside fellow Canadian unknown “Reeferman” Charles Scott) caused quite a stir. “You had a lot of Dutch seed companies that were long established as the old guard there,” says David Bienenstock, an editor with High Times. “And then some Canadians came in and took top prizes.” BC weed had arrived.

Meanwhile, medical patients had maintained for years that marijuana helped treat sleeplessness, pain, weight loss from illness, and other symptoms, and a Toronto man named Terry Parker finally won his legal battle to use it in his treatment for epilepsy. The ruling forced the government to create a medical marijuana program, which as it stands allows patients with a proper licence to grow pot for themselves, buy it from the government (cultivated in an abandoned mine in Flin Flon, Manitoba, it is notoriously awful), or assign a designated grower. In theory, the designated grower system lets an elderly cancer patient have her nephew help to grow her medicine. In practice, it also opens the door for people like Matt to collect enough licences to legally grow a warehouse full of pot.

Today sanctioned medical growers mix with entrepreneurs like Matt and pure black market drug dealers to create a confusing mishmash of businesses that, legal or not, form a vital part of many local economies. A recent study by the University of British Columbia and Simon Fraser University estimated that the retail value of marijuana sold solely to British Columbians was between $443 million and $564 million a year. And pot growers don’t sit on their money; they buy houses and cars, play golf, and eat in local restaurants. Four Okanagan mayors have now signed a letter urging the province to legalize the drug, a sign of just how accepted it has become. At the Budget car rental, when I explained that I was in town to research the marijuana industry, the man behind the desk flashed a smile: “It’s booming!”

Matt certainly didn’t seem too concerned about keeping a low profile, pulling up to the Tim Hortons in a bright yellow Hummer before waving for me to follow in my car. When we stopped outside a restaurant in a suburban plaza, he jumped down from the driver’s seat, greeted me with a “Hey, buddy,” then introduced me to his companions: Shane, just back from working at BC Bud Depot’s Amsterdam operation, and Matt’s wife, Soosha, a pale Russian woman with enormous cartoon eyes. She was pregnant and wanted something to eat, but she didn’t look particularly happy to be dragged along to what turned out to be a staff meeting. Inside, a half-dozen of BCBD’s employees, young guys in jeans and hoodies, munched on burgers, while a tall, heavy-set man with a clean-shaven head, named James, held court.

“And your magazine, The Walrus, I understand it’s about overweight girls? ” he said, glancing around the table, clocking the chuckles. “I’m joking, I’m joking,” he said. “I’ve never heard of your magazine.”

James introduced himself as a part owner of BCBD and then leaned in: “You want to know about the future of marijuana? The future is here.” He launched into a confusing monologue about his prognosis for an upcoming election, the likelihood of a change in marijuana policy, and the future of the Liberal Party. He told me the secret of Justin Trudeau’s appeal (“The girls think he’s dreamy, and the dads remember his father”). He claimed responsibility for the sponsorship scandal. It was hard to keep up.

Some skepticism must have registered on my face, because suddenly he wasn’t smiling. “Look, I know what I’m talking about,” he said. “I could get a meeting with Stephen Harper like that.” He snapped his fingers.

Outside, Matt clarified. James was not a part owner, more of a “consultant.” He was the man who understood politics and media and the law—the person who is helping Matt and BC Bud Depot take the final steps in transforming what was once just a collection of pot-growing friends into a major, legitimate business. We left James inside, mid-lecture, and drove off to see one of BCBD’s industrial grow ops.

“The War Room” is an unremarkable grey warehouse across from a tire dealership and a BC Hydro building. Inside, a maze of plywood corridors and catwalks leads to numbered doors; a sign on the wall reads “A Clean Plant Is a Healthy Plant.” Open a door, and you’re overwhelmed by a blast of light, humidity, the skunky aroma of budding marijuana, and the sound of soft jazz or Peruvian pan pipes—the Spa Channel from Shaw on Demand, which Matt and his crew swear helps the plants grow.

Whether it’s the music or the infinitely detailed fertilization, lighting, and watering schedules, they have turned pot production into a science, whittling down the entire process—from tiny clone to a 1.5-metre plant that won’t produce any more bud—to just five months. With some 1,500 plants in the building, the allotment for fifteen licensed patients, they can churn out pound after pound of Purple Kush. Matt supplies his licensed clients, and then sells the overage to dispensaries, or “compassion clubs,” unregulated but accepted retail facilities. And he has seven more warehouses in the Okanagan (a stretch he calls “the Green Mile”) and another two on Vancouver Island, as well as some old-style residential grow ops scattered around the province.

What I saw of the operation was clean, safe, orderly, and incredibly audacious. “The police know how professional we are, just the amount we’re producing, the number of patients we’re helping,” Matt said. “I don’t think there are many people that can compete.” He seemed entirely certain things were only going to get bigger and better, though he admitted to having a $100,000 rainy day legal fund, just in case.

Back in Vancouver, I googled James, curious about the bald man with the conspiracy theories whom Matt seemed to trust so implicitly. The first result that caught my eye was a Maclean’s article, “A Day with a Spy,” about a former US secret agent, James Leigh, allegedly hired by Stockwell Day in 2001 to get the goods on Jean Chrétien. There were other outrageous (sometimes murkily sourced) biographical details: James had been undercover in sixty-five countries; he had deep ties to motorcycle gangs. The last time he popped into public view was in 2006, when he returned to Canada with three bullet wounds he had sustained doing “clandestine security work” on the Pakistan–Afghanistan border. Exactly how this spook and mercenary had found himself deep in the Okanagan working with one of the country’s most prominent marijuana businesses was a mystery to me, but the big talk about political connections suddenly didn’t seem quite so far-fetched.

Medical marijuana has always been problematic for the government. How do you continue to demonize a particular plant when society has begun to acknowledge some of its benefits? How do you use taxpayers’ money to fund a medical program for a drug you officially condemn?

Alan Young is an Osgoode Hall law professor, at York University in Toronto, who has fought prohibition for decades. When he first raised the medical issue with legislators fifteen years ago, they were naturally suspicious. “They accused me of using the thin edge of the wedge, and I said no fucking way,” he told me. “And I was lying. Because the truth is, I had no interest in the medical issue. I actually thought it was a sham, but I could see that I could get a lot more support and sympathy talking about someone who’s medicating himself than someone who’s getting high.”

It was clear to both Young and the government where a medical program could lead. In 1919, when the Americans instituted Prohibition, they left an exemption for medical alcohol, prompting some 15,000 physicians to immediately line up for permits. Doctors freely prescribed “medicinal whisky,” while “drugstores” did a brisk business selling spirits in their old familiar bottles, with labels revised to announce that the booze was now “Unexcelled for Medicinal Purposes.” In Canada, the Bronfmans made a mutually beneficial deal with local physicians: doctors would receive a $2 bonus for every liquor prescription filled at a Bronfman establishment.

Canada’s medical marijuana program has likewise ballooned from just 500 users to 26,000, overwhelming Health Canada. Designated growers are expected to adhere to a four-licence limit, but with just eighty inspectors in charge of overseeing all drugs and pharmaceuticals in Canada the rules are completely unenforceable. A recent investigation by CBC found no record of Health Canada inspectors ever visiting a single medical marijuana grow op.

“By 2010, I was becoming very aware of enormous pressure on the government to get rid of the system, and for good reason,” Young said. “It had become a bit of a joke.” In June of that year, he helped to set up a meeting between Cathy Sabiston, director general of Health Canada’s Controlled Substances and Tobacco Directorate, and members of eastern Canada’s medical marijuana establishment. “It was the usual cast of characters,” Young said: pro-pot doctors, activists such as Montrealer Marc-Boris St-Maurice, and compassion club owners like Toronto’s Dom Cramer and Neev Tapiero. That meeting marked the beginning of consultations that took place quietly across the country.

Kirk Tousaw, a lawyer who represents cannabis activists and entrepreneurs in western Canada, sat in on one of these consultations. It was clear to him that the government wanted to get out of the pot business. There was talk of shutting down the Flin Flon facility, and of suspending the program that lets patients grow their own weed or designate a second-party grower. Instead, the government was considering a system of licensed commercial producers, with strict health and security standards. Patients would order their medicine from whatever company most appealed to them and then receive it by registered mail. In other words, the government was nudging medical marijuana into the free market.

The proposed system would close the loophole that growers like Matt use to produce marijuana, but it would also open up enormous business possibilities for any company that could snag one of those precious licences. “There will be economic opportunities there,” Tousaw said. More than just selling to Canada’s medical users, a licensed medical marijuana business—with advertising, a brand name, a customer base, and a sense of legitimacy—would be in the perfect position to step in once pot becomes legal. “There’s no doubt that many of my clients see the writing on the wall,” he said.

“It’s the same thing Seagrams did,” Young told me. “They were sitting in Prohibition, pushing the envelope, pushing the envelope, and as soon as the US laws changed—boom, they were in.” The question for pot entrepreneurs who had been closely following the consultation process was: Who will get the licences? What is the government looking for? Matt told me he was pushing for one and didn’t see why he wouldn’t be a top contender. After all, he had been supplying clients with an enormous supply of premium marijuana for years. But it was hard to imagine Health Canada publicly shaking hands with someone like him, especially with a new kind of entrepreneur going after the same prize.

Photograph by Grant Harder
Joint venture Penn Batanov, Ivan Miliovski, and Daniel Petrov at MedPotNow, their Vancouver storefront.

When the medical marijuana consultation process reached Vancouver in September 2011, one of the people in the room, carefully taking notes, was thirty-two-year-old serial entrepreneur Daniel Petrov. Since studying at the University of Alberta, he had owned a car shop, an online real estate company, a laser hair removal clinic, and a restaurant lounge. He was making good money buying and selling properties in Edmonton when the real estate market sputtered, and he decided it was time for a change. One of his friends was moving to BC to break in to the medical marijuana business. Petrov was intrigued.

I met him at his Vancouver dispensary, MedPotNow, last fall. The clean-cut businessman has a lantern jaw, dark hair he keeps carefully slicked back in place, and the professional demeanour of a young investment banker. He doesn’t smoke pot—doesn’t like getting high and feeling out of control—but he knows a chance to make money when he sees it. “I’m an entrepreneur, so I don’t really care what industry I’m in,” he said. “The medical marijuana field is one of the greatest opportunities available right now. It’s a huge market.”

He spent several months scouting local dispensaries before he met his future partners, Bulgarian-born master growers Ivan Miliovski and Penn Batanov. The latter, a white-haired forty-four-year-old, jumped ship in Halifax years ago; the baby-faced Miliovski dreamt of playing pro football and got as far as the varsity team at Simon Fraser before a leg injury ended his career in second year. They met while working at Advanced Nutrients, a lucrative marijuana fertilizer business charged in 2001 with conspiracy to export large quantities of pot across the border (the charges were eventually dropped). When Advanced Nutrients ended its growing operations, Batanov and Miliovski struck out on their own, attempting to carve out a corner of the increasingly crowded marketplace.

The day of my interview with the MedPotNow partners, I waited alone in a sparse reception area, its walls decorated with artwork by clients. In an adjoining room, a friendly “budtender” with a handlebar moustache sat in front of a whiteboard that listed the day’s fare: VIP Purple Kush, Cannatonic, Kali Mist, all $10 a gram; Electric Kush Bubble hash for $40; plus various cannabis edibles, such as cookies, chocolate bars, and popcorn.

But the modest storefront was part of a larger business plan. Petrov hoped Health Canada would regulate dispensaries in its new medical marijuana program, and to that end he was trying to make the business as attractive as possible to the government. Whereas his competitors buy marijuana from various producers, MedPotNow controls its business from production (Miliovski and Batanov’s department) right through to distribution. And instead of indiscriminately growing its membership, MedPotNow is careful to only accept legitimate patients. “This dispensary has to be documented down to how many toilet rolls we go through,” said Petrov.

He had been combing government documents and then double-checking with representatives from Health Canada, in an effort to meet whatever the government might expect from potential licensees. He assured me that they were working with scientists from the University of Alberta who could help them analyze the product’s chemical properties. They had also installed the best security systems at each of their grow ops. They are not the biggest company, but they have years of growing experience, plus the business acumen to succeed. “I think we have a great chance of getting a licence,” Petrov said.

He knew they didn’t have much time. Pharmaceutical companies have been tinkering for years with artificial products that mimic the active chemicals in marijuana. Many believe the tobacco industry has considered the feasibility of entering the pot business. One persistent urban myth is that Marlboro has already trademarked the name Marleys. Tobacco companies have the land to grow pot, the infrastructure to process and roll it, and the distribution networks to get it out to the world. Most importantly, they have access to the kind of capital that could drown a business like MedPotNow or BC Bud Depot. The latter’s only advantage is industry-specific expertise and a willingness to build now, while the grey market still exists. “If we’re still a small company when this thing goes legal, we’re just going to get pushed out,” Petrov told me. “My job is to get this company where it needs to be so it can compete when things open up.”

After the interview, Batanov and Miliovski drove me out to one of their grow ops, a large home in Maple Ridge behind a serious-looking automatic gate. The interior was stripped bare, with the walls wrapped in white insulating plastic and all of the electrical work tidily installed. There were bikinied centrefolds from a pot magazine plastered across the door, and jugs of liquid fertilizer stacked on metal shelves. This particular facility has a limit of 450 plants, based on four licences, but Miliovski and Batanov keep ten to fifteen fewer, just to be safe. Soon after they got the operation up and running, there was an attempted robbery at the house, and they had to call the cops. “I was nervous about it,” Miliovski admitted. “I mean, to have the police walking into my grow op? That doesn’t happen every day.” He said the officers scoped the premises and complimented him on its neatness.

Like BC Bud Depot, MedPotNow is going industrial. We stopped next at Batanov and Miliovski’s latest project, a 12,000-square-foot warehouse in Delta. It was a cavernous place, empty but for one small room in the corner, its grow lights humming. As we drove back to Vancouver, the partners talked eagerly about the future. Pot, they felt, should be organic. They were definitely working toward making the new facility 100 percent organic. With more resources they could also make their operations completely sterile, to eliminate any risk of mould. They were excited about a new aquaponics system, a sustainable production process in which farmed fish supply the nutrients for hydroponically grown plants. Most of all, they talked about the possibility of getting a government licence.

A licence would mean no more hassles with banks and PayPal and all of the other services required by a normal business. It would mean legitimacy. Miliovski, as physically imposing as he is, was particularly sensitive about how people saw him. He spoke sadly about his ex-wife’s objections to his work, about having to hide his job from his eleven-year-old son. A licence would change all of that.

Without one, though, MedPotNow’s residential grow ops, their huge new warehouse, the storefront, their big dreams—all of it could suddenly come to an end.

Miliovski eyed me in the rear-view mirror. “So, you’ve seen a lot of different grow ops now. How do you think ours compares? ”

I told him it was impressive, but he wasn’t satisfied: “Impressive in what way? ”

I thought for a moment that he was squeezing me for details about his competitors. It was only natural that he wanted a sense of where MedPotNow stood against its rivals. Then I realized he was doing something far simpler, just fishing for a compliment, looking for validation from an outsider.

“It’s a beautiful grow op,” I told him.

Moments later, Miliovski took out a slim joint of Strawberry Cheese, his current strain of choice. Both he and Batanov have medical marijuana licences and treat the drug nonchalantly. They passed the joint back and forth a few times before handing it back to me. Maybe it was just the power of suggestion, but it tasted, against all odds, like both strawberry and cheese. I inhaled deeply and rolled down the window to blow the thick white smoke out into the Vancouver night. We whizzed through the suburbs, the roads black and shimmery in the rain, and I sank back in my seat, feeling that strange mixture of pleasure, self-consciousness, and fuzzy-headed contemplation.

I could see how easy it was to dream out here. Imagine that you are the very best at what you do. You’ve been lauded at international competitions, praised by your peers. Here you are, doing the thing you love, producing the perfect specimen of a plant that brings pleasure to so many people around the world. You are an artist who has been forced underground, but now your work is so close to being truly and fully accepted. Becoming the Seagrams of weed isn’t just about money; it’s about respect. The end of prohibition would turn hustlers into more than tycoons. They could become philanthropists, friends to heads of state, companions of the Order of Canada. It was a beautiful dream…

In mid-December, weeks after I returned to Toronto, Health Canada officially announced the revamped medical marijuana program. As suspected, it would license commercial operations rather than individual patients. Details about the requirements were forthcoming, but it also looked as though the government had abandoned the idea of regulating dispensaries. Whether they would be allowed to operate as they do now, unregulated but out in the open, remained to be seen. Either way, it was a hitch in MedPotNow’s business plan. Early in the new year, Petrov was keeping his chin up. “With changes come opportunity,” he said. He continued to pursue a commercial licence, while reading the fine print of the proposed regulations. They suggest that pharmacies will be permitted to dispense marijuana to patients: “So, I mean, what is a pharmacy exactly? ” He sounded like someone searching for a new loophole.

Matt, too, was still after a licence, but he wasn’t worried about being denied. “I don’t think it’s going to fly,” he told me. “People have way too much invested. People have mortgaged their houses to grow their own medicine.” There have been calls for nationwide protests against the new regulations, and rumblings of litigation. “To us, it’s business as usual,” he said.

For Matt and Petrov, Miliovski and Batanov, there is a simple belief that reforms to the pot laws are inevitable. Like the booze sellers before them, they will adapt to new policies, profit from the grey market, and wait out the dying years of this prohibition. I admired their confidence. I was also bothered by a nagging thought: even if the government can’t stop the march of progress, it can certainly stop individual marijuana producers. When people talk about becoming the Seagrams of weed, they are imagining themselves as the heroes of one of the most dramatic transformation stories in Canadian history. What they don’t think about are the dozens of once-mighty bootleggers who got overrun by regulations or the police, or were simply shunted aside by the Darwinian forces of capitalism. They don’t think of Emilio Picariello, the powerful Canadian bootlegger once known as the Bottle King, who shot a police officer after a liquor run went bad and was hanged in 1923. They don’t like to think about all of the ambitious businessmen, staking out claims and building world-beating empires, who one day overreached a little or just got unlucky, and then—poof!—watched it all go up in smoke.

This appeared in the April 2013 issue.

Nicholas Hune-Brown (@nickhunebrown) has written for Toronto Life, Hazlitt, and The Believer.

Grant Harder won an Applied Arts award for the April 2013 cover of enRoute.

  • ER Brown

    Great article. I spent months researching the business for my novel,and the story covers so many of the same themes. The notion that forward-looking growers are planning to be the next Bronfmans is somewhat contentious, though… Marc Emery himself totally disagrees. He read an early draft of my novel, in which a principal character, a high-end grower, anticipates legalization and uses Seagrams as an example. Marc ridiculed the idea saying “Legalization means the end of the lucrative money in weed growing & distribution.” Which is not exactly his public position. Nor what his wife says. Others I spoke to agree with Mr Hume-Brown.

  • David C. Huculak

    Marijuana is easy to grow. I’ve done it and grown some of the best. If it becomes legal or decriminalized there will be a short windfall and then everyone will grow it on their window sills. Sorry would-be-stoner-millionaires – at least the pot will be free.

  • http://twitter.com/illtrax J. W. Jessy Forsyth

    The proposed New Marihuana for Medical Purposes Regulations (MMPR) sure makes it clear that the Government is moving towards commercialization. I feel personal production should exist alongside a commercial market. Taking the power from the patients’ hands would be devastating for many.

  • shelbylynmiller

    i love how the walrus writes <3

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  • Open2Debate

    We are witnessing the death throes of prohibition while its advocates make a desperate and frantic last stand, their final frenzy.

    In years to come, the attitudes that now prevail towards people that choose cannabis will be as politically incorrect as racism, homophobia or denying women the vote.

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  • Pamela Mccoll

    If you look to the global approach to drug policy the most successful example is Sweden – who are in compliance with the four UN conventions on limiting the use and spread of narcotic substances. Sweden has employed prohibition and they have now the lowest rate of use for
    marijuana – 2%. Canada has the worst rates for youth in the industrialized world – not because prohibition failed but thanks to an aggressive pot lobby- who want their pot and want it now – and thanks to the 30 year failed experiment of “harm reduction”. In British Columbia the chief medical officer and his underlings support “do not do heroin alone” posters and “know your source”. Their liberation ideology that drug use is a lifestyle choice that should be made by adults has translated in practice to the minimalization of the risks of harm. It is not prohibition that has failed – since the 1990’s we have been allowed to fight the war on drugs. Legalization is the normalization and commercialization of marijuana – it goes mainstream just like tobacco and flies in the face of a mountain of solid scientific evidence that shows marijuana is not safe for human consumption – regardless of age. Compassionate prohibition as the Swedes have successfully implemented is not repressive but restrictive and addresses the needs of society at large. Prevention and prohibition do work when used properly. In BC they should take down the posters that support the acceptance of drugs and start a campaign ” just do not do drugs ” and in doing so safe a great deal of suffering, sickness and costs. With between 30-53% of grade 12 students in this country declaring themselves to be regular users – while only 8% of Swedish kids have even tried marijuana we might just have the answer right in front of us – reject legalization – after all 190 countries around the world have – with only Uraquay taking on legalization thanks to the power of big organized money and not the will of the people.

    • http://drugsense.org/me/ Matthew Elrod

      “If you look to the global approach to drug policy the most successful example is Sweden”

      “… levels of drug use in Sweden, while in relative terms still
      very low, are increasing. Furthermore, the Swedish model – in
      particular its antipathy to proven harm reduction measures – has had
      serious negative consequences that are almost never mentioned by its
      advocates. These include alarmingly high rates of hepatitis C among
      people who inject drugs, and a 600% increase in drug-induced deaths over
      the last 20 years.”


      “Canada has the worst rates for youth in the industrialized world – not
      because prohibition failed but thanks to an aggressive pot lobby- who
      want their pot and want it now – and thanks to the 30 year failed
      experiment of “harm reduction”.”

      The Harper government removed harm reduction from our drug strategy when they took office. We allocate about 80 per cent of our drug control budgets to enforcement, about 15 per cent to treatment and about 2 per cent to harm reduction.

      Cannabis consumers have cannabis and they have it now. Most cannabis law reform advocates do not consume cannabis. Cannabis law reform advocates are able to advocate cannabis law reform across international boundaries, so their advocacy can not explain higher usage rates in Canada relative to the the rest of the world.

      Every major study of the subject has concluded that cannabis usage rates rise and fall with no statistical relationship to cannabis laws and their enforcement, explaining in part why Dutch youth use cannabis at about half the rate of Canadian youth.

      “mainstream just like tobacco.”

      Tobacco is hardly mainstream. On the contrary, it is socially vilified and prohibited in public places.

      “Compassionate prohibition”


      “190 countries around the world have [rejected legalization]”

      Not exactly. Under pressure from the United States, most of the world became signatories to international treaties that prohibited cannabis. Few countries have seriously reconsidered.

      • Pamela Mccoll

        Glad you brought up harm reduction – it is the problem – a fatalistic approach that keeps addicts addicted – how is that humane – we see recovery and prevention as the answer – time we gave it a serious try and put harm reduction back in the land of ideology not reality

        • http://drugsense.org/me/ Matthew Elrod

          Actually, you brought up harm reduction, blaming harm reduction for Canadian youth using cannabis at a high rate relative to other industrialized countries.

          Education, prevention and treatment are swell, and I wish we reallocated some of the millions we waste on law enforcement toward education, prevention and treatment.

          However, I support harm reduction with respect to sex education, teaching young people that if they choose to have sex, there are ways to reduce the risks associated with having sex. Are you opposed to sex education and condoms?

          Similarly, I support teaching young people that if they drink or use drugs, there are ways to reduce the risks associated with drinking and using drugs. There is no evidence that imparting this information encourages drinking, drug use or sex.

          The so-called “Journal” of Global Drug Policy is actually a blog owned by the Drug Free America Foundation. If you are trying to prove that needle exchange programs, supervised injection sites, methadone programs and heroin maintenance have caused Canadian youth to use more cannabis, then you still have your work cut out for you.

        • sp

          Pam, your approach to the Cannabis laws are sickening and
          downright EVIL. Look, you want FACTS, here’s a REAL FACT for you, NOBODY and I mean ZERO people in recorded history have died from Cannabis alone. All of your arguments DROP DEAD in the face of this REALITY. So STOP LYING and creating FALSE notions about the dangers of Cannabis, when the only real physical harm is some upper respiratory track irritation if you smoke it. If you vaporize or consume it as an edible this harm can be mitigated to the point of being negligible. So you’re willing to DESTROY the lives of our children and grandchildren by giving them a criminal record for Cannabis at young age. No offense, but
          PROHIBITION is like a CANCER that is harming and killing many people around the globe. You and your organization SAM are like TUMOURS at the center of this CANCER, spreading lies and hatred in order to perpetuate this SICKNESS. Don’t You Get It?

          Here is a link to some real scientific evidence from the USA’s own drug researchers showing that Cannabis has the potential to KILL CANCER.


          So Pam, you want to argue with the USA’s own findings? Here
          is another link to a patent held by the USA on Cannabinoids as antioxidants and neuroprotectants.


          Scientific proof that Cannabis is medicine, the 100% TRUTH.

          So STOP SPREADING your CANCEROUS LIES, because like Cannabis will KILL CANCER, the TRUTH will KILL PROHIBITION.


          • Pamela Mccoll

            Youth do not get criminal records – in the USA or in Canada.
            Read more about the harms associated with the use of marijuana at the Canadian Center on Substance Abuse – or other reputable organizations – and tone it down – unacceptable ranting on in a conversation.

          • http://drugsense.org/me/ Matthew Elrod

            “Youth do not get criminal records – in the USA or in Canada.”

            Incorrect and dangerously misleading. What is the point of having laws on the books threatening minors with criminal records and then telling them not to worry about it?


            As natural health products go, cannabis is not exceptionally harmful. Compared to most pharmaceuticals, cannabis is relatively benign. More importantly, criminalizing consumers and imprisoning cultivators does not make cannabis less popular nor harder to obtain. Prohibition makes cannabis more harmful than it would otherwise be. That is whole the point, to discourage people from consuming cannabis by making it more harmful and risky. It fails to achieve the first goal but succeeds with the latter.

          • Pamela Mccoll


            Canada treats kids and youth differently than adults and so does the USA –

          • Pamela Mccoll


            Kids are protected, records sealed to protect travel and job opportunities.

          • http://drugsense.org/me/ Matthew Elrod

            Yes, they are sealed, eventually. But as the link I shared explained:

            [begin quote]

            Having a youth record may limit choices for:
            Travel to foreign countries
            College or university

            The youth record may stay open for up to five years or more after the young offender has completed a sentence.

            [end quote]

            As the link you shared explained:

            “Contrary to popular belief, your youth criminal records are not
            Pardoned,or automatically expire when you turn 18. The amount of time a youth record remains open varies based on the offence, the sentence, and on whether the person re-offends without satisfying the “Access Period”. Once the “Access Period” is satisfied, the record is sealed and/or destroyed. However, if that person re-offends as an adult, while their youth record is still open,
            their youth record will become part of their adult record which would
            require a Pardon to remove.”

            If you are arguing that having criminal laws on the books for cannabis offenses is not so bad because youth are eventually forgiven, under the right circumstances, does that not send the “wrong message” to young people, that they can possess cannabis with impunity?

            You wrote “Canada has the worst rates for youth in the industrialized world – not because prohibition failed but thanks to an aggressive pot lobby- who want their pot and want it now – and thanks to the 30 year failed experiment of “harm reduction”.

            So, you are saying that our drug laws would work if not for the “pot lobby,” harm reduction and those meddling kids, and yet you are also saying that our drug laws are not enforced, and that they are harmless when they are enforced.

            Don’t you think your position would be more credible if you acknowledged the costs and harms of prohibition? Don’t you agree that cannabis law reform advocates seem more credible when they acknowledge the potential harms of cannabis?

            You seem to think that the benefits of prohibition outweigh the costs and harms, yes? And yet there are no benefits to be found in the scientific literature. Does this not remind you of your criticisms of medicinal cannabis proponents claiming that cannabis has medicinal benefits that offset the harms?

          • Pamela Mccoll

            Youth who are found to be breaking the laws and convicted have protection so that foreign governments can not know about their record, same goes for employers – ( aside from the a gov job possibly ) and the record is sealed – but aside from that using marijuana puts a young person at an increased risk of suicide, of dropping out of school, or experiencing psychosis, of being involved in accidents – including those on the roadways, of experiencing depression, anxiety, and being becoming addicted – especially if they do marijuana everyday – that is not to mention the risks of cognitive brain damage, harm to their reproductive system, potential risk of cancers – including lung, and for making less of an income and enjoying a full and happy life – understating the risks associated with marijuana use is the hallmark of the pot lobby campaign. They deny the science, attack the scientist and scream we want our drugs and we want them know – and through out the Reefer Madness nonsense along the way. Working for less drugs and less drug use is the way to go to protect human rights – the right to not be prey to a predatory industry who is looking for lifelong customers. We need a massive prevention campaign and restrictive not repressive programs that offer help to those who need to recover and rebuild their lives after falling to a lifestyle of drug use. There is nothing punitive in that – and it follows the human rights conventions.

          • http://drugsense.org/me/ Matthew Elrod

            “using marijuana puts a young person at an increased risk of suicide, of dropping out of school, or experiencing psychosis,”

            Yes, there is some evidence that heavy, chronic cannabis use in
            youth is correlated with suicide, depression, poor academic
            performance and psychosis. However, most of the research has
            failed to find causation.

            There is a large body of evidence that people with mental health
            problems, including depression, self-medicate with cannabis. To
            the extent people choose cannabis over alcohol, tobacco and
            pharmaceuticals for treating mental health problems, they are
            making a healthier choice.

            “of being involved in accidents”

            With respect to accidents, the evidence is very clear that, because
            cannabis is an economic substitute for alcohol, when cannabis use
            goes up, drinking and accidents go down.

            “and being becoming addicted”

            While it is true that about 10 per cent of cannabis consumers
            are drug dependent, as defined by the DSM V, and about 5 per
            cent consume daily, the vast majority of cannabis consumers
            consume rarely and moderately. Those who do become “addicted”
            typically “mature out” of the habit as their lifestyles change,
            and they either quit or cut down with little if any discomfort
            nor professional treatment.

            For chronic consumers, there are mild withdrawal symptoms associated with cannabis abstention, such as insomnia and irritability. However, these symptoms do not appear until after about 24 hours of abstention, so unlike tobacco or cocaine withdrawal symptoms which are more immediate, cannabis withdrawal symptoms do not compel abstainers to relapse.

            Experts have rated cannabis addiction as somewhat less problematic
            than coffee addiction.

            The vast majority of cannabis law reformers would agree that we should attempt to discourage and prevent young people from consuming cannabis chronically. Proposed regulations always include age restrictions.

            “understating the risks associated with marijuana use is the hallmark of the pot lobby campaign.”

            Whereas exaggerating the risks is the hallmark of the prohibition
            lobby. Both sides are missing the point. If cannabis were as
            addictive as nicotine, as impairing and criminogenic as alcohol,
            as carcinogenic as roasted coffee, as detrimental to lung function
            as urban air pollution and as demotivating as the nightly news, it
            would make less sense to abrogate control of this exceptionally
            dangerous herb to criminals and teenagers.

            Again, there is no evidence that prohibition improves the situation.
            Go on arguing that cannabis is exceptionally dangerous. All the
            more reason to regulate the herb, like we regulate other potentially dangerous products and activities that we would rather our children avoid.

            Note that the harms associated with teens chronically consuming
            cannabis have been studied under prohibition. In other words, researchers are able to find large cohorts of teenagers who have
            smoked daily for years on end. Prohibition doesn’t work.

            “They deny the science, attack the scientist”

            This is another attribute that some cannabis law reformers share with
            some prohibitionists, such as yourself. For example, you have attacked the scientists at the Centre for Addiction and Mental Health for being “harm reductionists” and defeatists who have given up on prevention.

            Being skeptical of scientific studies is wise, but attacking scientists
            and questioning their motives only makes sense to the extent that a
            vested interest or bias is suspected, as is the case when scientists blog for the so-called “Journal of Global Drug Policy.”

            Two things to consider when looking at the scientific evidence is whether or not the research was peer-reviewed, to control for
            bias and methodological shortcomings, and whether or not the results
            have been replicated, whether or not they are consistent with
            other evidence.

            “and scream we want our drugs and we want them know”

            I think you are conflating the sort of activists who attend rallies
            with the scientists, police officers, doctors, judges, parents,
            teachers and drug policy experts who are calling for reform. People
            who march in gay pride parades are not representative of gay people,
            and people who attend cannabis rallies are not representative of
            cannabis consumers, much less cannabis law reformers, most of whom do not partake.

            Cannabis consuming activists are more likely to demand the freedom to grow and consume cannabis, as opposed to screaming that they want cannabis. Recall that they typically consume cannabis at cannabis rallies. I think you either do not understand what motivates
            people to advocate cannabis law reform, or you are deliberately stereotyping them.

            I know you take umbrage at having your own motivations questioned.
            Some have accused SAM Canada of being funded by the pharmaceutical industry, or of being in cahoots with the conservative party. For the sake of discussion, I try not to attribute to malice that which can be explained by incompetence, so I assume that you are sincerely concerned about young people using cannabis. Me too.

            However, SAM Canada has been short on “smart approaches.” You seem to spend most of your time and energy on demonizing cannabis, cannabis consumers and cannabis law reformers and defending the status quo with respect to prohibition and cannabis policy.

            “predatory industry who is looking for lifelong customers.”

            Most cannabis consumers are not lifelong consumers, and they are
            certainly not heavy, regular, lifelong consumers, so predatory capitalists would be better off getting into another business, like the junk food industry, or the cell phone industry, or the pharmaceutical industry. Happily, we can limit advertising and mandate plain packaging and warning labels. Big tobacco is not as big as it once was, in part because half the adult population used to smoke, and the typical smoker smoked a pack a day.

            “programs that offer help to those who need to recover and rebuild their lives after falling to a lifestyle of drug use.”

            Agreed. Treatment on demand would be great. As it stands, people
            who want treatment often need to wait for months and/or pay a fortune for treatment to an unregulated industry full of charlatans and woefully uneducated treatment “specialists.”

            We should reallocate the money we waste on law enforcement toward education, treatment and harm reduction. Every major study of drug policy has made this recommendation, to treat problematic drug
            use as a public health problem rather than a criminal justice problem.

            Mind you, most drug consumers use drugs non-problematically, do
            not want treatment, would not benefit from treatment and are not
            victims of a predatory industry.

            Criminalizing all drug consumers to prevent young people from
            using cannabis problematically is like criminalizing all junk
            food consumers, young and old, fit or fat, to reduce childhood
            obesity. We should focus on helping people with problems and
            educating people on how to avoid problems, rather than creating
            problems for people who do not have any.

          • Freddie

            this is total opinion ,,,,,,,,you absolutely you have no evidence to back any of these claims up, on the contrary the evidence point to the exact opposite.

      • Pamela Mccoll

        Here is latest on Sweden:

        No, drug use prevalence is still low and not increasing. Latest school surveys show rates of use is in decline.
        What has happened, the way I see things, is that the heavy users have changed their habits and various bipods are being used much more frequently. This is in line with the problem of misuse of prescription drugs in the US, which leads to a lot of premature deaths. Once again harm reduction policies hurting people.

        • http://drugsense.org/me/ Matthew Elrod

          Drug usage rates in Sweden are relatively stable. Some indicators have gone up recently, others have gone down. For example, “the lifetime use of any drug by 15-16-year-olds increased from 6% to 9% between 1995 and 2011. But this is irrelevant.

          “… studies have consistently failed to establish the existence of a link
          between the harshness of a country’s drug laws and its levels of drug
          use. A 2008 study using World Health Organization data from 17 countries
          (not including Sweden) found: ‘Globally, drug use is not distributed
          evenly and is not simply related to drug policy, since countries with
          stringent user-level illegal drug policies did not have lower levels of
          use than countries with liberal ones. Many other large-scale studies – including most recently a study by the UK Home Office – have come to the same conclusion.”

          Bipods? Perhaps you meant bylaws?

          Some countries with harsh laws, like the U.S., have high usage rates, and some countries with more tolerance have low usage rates, such as the Netherlands. Some countries with really harsh laws, like Singapore, have low [admitted] illicit drug use rates but high drinking and prescription drug use rates. Again, the evidence is quite robust that usage rates are not significantly influenced by drug laws, sentencing practices and levels of enforcement.

          The evidence is also quite robust that harm reduction policies do not increase usage rates. Certainly harm reduction policies regarding alcohol, tobacco and opiates do not increase cannabis usage rates.

          “Another possible effect is that, somehow, harm reduction encourages drug use. The
          rationale behind this argument appears to be that, by assisting people who are already
          using drugs to remain healthier, avoid problems and stay alive, people who do not use
          drugs will regard drugs as safe and decide to start using drugs themselves. Harm
          reduction is thought to ‘send out the wrong signal’ and undermines primary prevention
          efforts. The area where this has best been tested probably concerns needle and syringe
          programmes (see section 3.1). Several study have investigated the hypothesis that their
          introduction increases drug use and found no evidence that they do (Watters et al 1994;
          Normand et al 1995; Paone et al 1995). However, a problem with any research into this
          question is that drug use is itself a dynamic phenomenon, that will independently increase
          and decline over time. Attributing causation or disproving it is difficult for both its critics
          and advocates.”

          “Nevertheless, the view that harm reduction may encourage drug use seems to
          underestimate the complexity of the factors that shape people’s decisions to use drugs
          (for example see Barnard and McKeganey 1994). The implication is that, by holding a
          discourse with people who are using drugs about how they might limit harm and reduce
          their exposure to risk, non-users may learn of this, or see harm reduction services and be
          encouraged to try drugs. This seems to ignore the fact that a fundamental feature of the
          harm reduction discourse is its emphasis on harm. Whilst harm reductionists believe that
          this can be reduced in various ways, they would rarely claim that it can be completely
          avoided – as our experience globally with legal drugs makes abundantly clear. Thus, the
          basic harm reduction message is that all drug use is potentially harmful, but that the
          harms can, to some extent, be constrained.”

          I fail to how harm reduction policies can be held responsible for prescription drug abuse and overdose deaths. Can you elaborate?

          • Pamela Mccoll

            Instead of saying do not do heroin alone – or know your source – how about do not do drugs.
            The ideology of harm reduction translates into a false sense of security of doing drugs – prevention should be the first line defense and it is not when it comes to harm reduction.

          • http://drugsense.org/me/ Matthew Elrod

            How about saying, we would rather you not use heroin, and here is why, but if you do, do not do it alone and know your source. Is that not like saying, we would rather you not have sex, and here is why, but if you do, know your partner and use birth control? I ask again, are you opposed to sex education on the same grounds?

            Do defensive driving courses, air bags and seat belts impart a false sense of security with respect to driving? Should we instead attempt to reduce traffic accidents and fatalities by telling people not to drive?

            I get that, theoretically, educating people so that risky activities they engage in are less risky, could, theoretically make those activities more popular, but I am not aware of any evidence to support that theory. It is not as though scientists have not exhaustively researched the subject. Harm reduction policies have been implemented around the world for decades.

            The Harper government commissioned a study of InSite, intent on finding harms, and they too failed to validate your moral intuitions.

            The report also states there’s no evidence that InSite … “influences rates of drug use in the community or increase relapse rates
            among injection drug users.” http://www.cmaj.ca/content/178/11/1412.full