My last bust was crazy. I didn’t even know what it was. A few guys came in and they’re like, “We’re here to raid you.”
“Guys,” I said, “Don’t joke. It happens all the time.”
They came in and opened the door, took a long look. I mean, this store would get hit every week by 5-0. Thankfully, I just happened to be off all those days and it was wack — I was supposed to be off this day, but I had switched shifts with someone and now this. They came in wearing regular clothes. “We’re raiding you,” and as soon as he said that, from the back door, people came in — from the front door, they came in and kicked in the office door.
We probably had five grand and a couple pounds on us, so it wasn’t a big deal. But this is the one I went down for — this is the time I spent the night in jail.
We all got taken in separate cop cars and I sat in a holding cell for about two hours and they strip searched us and we had to call our lawyer, Jack Lloyd, a fucking pioneer in this industry, man.
“It’s Jackson Flynn. I’m calling from Canna. We got raided again.”
I stayed in a shitty little cell with my boy I was working with. He was in the cell beside me, then they brought in some fucking kid who got arrested for the first time who cried all night and kept us awake. I was scared, but whatever, man.
You’re in this situation, you can’t do anything about it. Accept it.
Still, the next day got intense. They chained our ankles and hands, threw us into the paddy wagon, like the court services armoured truck. There it was a little more intimidating.
You’re in the basement with all the other criminals who did the same shit. Thankfully I was with the people with drug charges, not murderers or rapists or some shit, but listening to these people talk — “oh yeah, take the six-month deal” — it was foreign to me. Finally, after four hours, I saw a paralegal across the glass thing, and she said I’ll be out on bail in two hours and that’s how it happened. Jack got me out, but I still lived with my pop and I wasn’t sure about weed. I was twenty years old, and I had a goal that I’d pay off my credit card and have ten grand in the bank, but for me it was ten grand in cash in my suit pocket in my closet. I was buying any shit I wanted, and me and my boys were playing Cee-lo after work for hundreds of dollars. We didn’t care.
Playing $800 dice games, why not?
There were 260 companies operating in the cannabis industry in Canada in the summer of 2019, most in agriculture and retail, but also some in manufacturing, according to Statistics Canada. The cannabis industry was responsible for $6.7 billion in gross domestic product. From January to March 2019, 2.5 million consumers purchased cannabis from a legal vendor. In the first three months of the year, 18 percent of Canadians older than fifteen used cannabis, up from 14 percent before legalization. And the industry was still growing.
To combat the lack of stores and to help defuse the illicit market, Ontario premier Doug Ford announced a second lottery for forty-two cannabis retail locations on July 3, 2019. You couldn’t just open a cannabis shop, not a legal one. You had to win a licence through a lottery because there was more demand from would-be shop owners than the government was willing to license to sell weed. That July, 4,864 applications were submitted. To participate in the lottery, cannabis shop owners had to submit a background check, present their bank balance, and have already secured a lease for their location; this was supposed to eliminate shop owners who weren’t set up to succeed at such a seriously expensive, regulated job.
On August 20, 2019, the government announced the winners of the lottery. That would make sixty-eight pot shops for 14.57 million Ontarians. Alberta, during the summer of 2019, had 277 shops for its population of 4.3 million. So there still wouldn’t be a lot of stores in Ontario, but it was slowly getting better in terms of access to weed for Canada’s most populous city.
The licensing announcement on August 20 was mostly subdued, except for one thing: CAFE, the most notorious illegal operator in the country, scored a licence at their 104 Harbord Street location. How could that be? It was always rumoured in cannabis circles that the CAFE team had ties to the Doug Ford government. The Globe and Mail reported that in the 1980s, Doug Ford had sold hash. So had Ford’s siblings, Randy and Kathy, and of course Rob Ford, the former Toronto mayor, had his own underground connections. Could there be ties between Ford and CAFE’s Jon Galvano and Wes Weber? Nothing’s been proven, and the name on the retail licence application was Rob Heydon, a Toronto-area film producer and director. The application didn’t mention the name CAFE, but there it was: the location at which they had been operating had been granted a licence. Twelve of the winners had been disqualified for not submitting their paperwork in a timely fashion. Heydon, at the CAFE address, was not disqualified. Of course, once the media heard about the CAFE team winning the lottery — after remaining open before, during, and after the episode of the concrete blocks — we had a field day.
What more could you possibly do to be disqualified from selling weed?
“It’s the craziest thing you could’ve possibly seen,” says Lorne Gertner, whose Tokyo Smoke, now owned by Canopy, won a licence in the first round of Ontario’s lottery and opened a shop at Yonge and Dundas, in a three-storey former HMV location. “They did everything wrong in the face of the regulators and picked up a licence which they had no chance of winning — to even apply takes tremendous balls.”
In the end, following the brouhaha, CAFE had its licence rescinded and Rob Heydon moved on, opening 420Love in Hamilton. But after all the new legal stores opened, the CAFE shop at 104 Harbord Street continued selling illegal weed and inviting its guests, without a licence, to drink infused lemonade and iced tea on the patio, which was still against the law. There were forty-two new licensed weed stores in Ontario by the fall of 2019 — and the most popular retailer in the country remained the biggest, most notorious illegal store, still out in the open selling illegal weed.
Lift & Co. was Matei Olaru’s company. It began as a small Canadian cannabis review site and grew into a cannabis expo and award-show business, listing on the TSX Venture Exchange in September 2018. In addition to its other businesses, Lift created a training program for budtenders, in partnership with Mothers Against Drunk Driving Canada. The program, CannSell, provided certification for budtenders before they worked behind a cannabis store till. It was against the law to sell marijuana without a CannSell certification.
Lift filed for bankruptcy in 2020, and in the proceedings, CannSell was left to open tender. Who ended up buying the government program?
A company at least in part owned by Wes Weber and Jon Galvano — owners of CAFE.
Chapter 15 Licensed to Kill
“We raised twenty million with two phone calls.”
Trevor Fencott
The back of Drake’s sweatshirt read “Kawhi Me a River.” The rap superstar went over to Bruce Linton, sitting courtside at game six of the 2019 Eastern Conference Finals between the Toronto Raptors and the Milwaukee Bucks. Linton, at the game with Lorne Gertner and decked out in his Tweed uniform — hat, button, and shirt — was never a basketball fan, but the Raptors had become, alongside Drake and cannabis, the hottest ticket in town. Basketball audiences spilled out from the Scotiabank Arena into Jurassic Park, outside the stadium, where an ESPN producer was picked up on a hot mic warning his reporter: “Just FYI, there’s a lot of weed going on out there.”
Weed had become like maple syrup and free health care, shorthand for Canadian. With that came swagger, money, fame. The Raptors had been a fledgling Canadian NBA franchise where NBA superstars, arbiters of style, didn’t want to play. The team had some runs — Vince Carter, Chris Bosh, and DeMar DeRozan were loved by Canadian basketball fans — but the admiration was local, and many NBA stars, though they enjoyed our strip clubs, didn’t want to live in Canada. Too cold, too small, and also, Canada? Too uncool.
Then, in 2017, Donald Trump became the U.S. president, and Rolling Stone put Justin Trudeau on its cover. “Why can’t he be our president?” read the headline. And then things in Toronto just got better: the Raptors got Kawhi.
Kawhi Leonard, the mercurial forward formerly of the San Antonio Spurs, who sullenly sat out their 2018 season — maybe from an injury, maybe not — wore his petulance like a crown of thorns. Until he arrived in Toronto. Then the Raptors, like Drake, began to bloom. At the end of the school year in 2019, my daughter was walking to the bus for a field trip. She cheered and chanted “Let’s go Raptors” as she crossed the road with her grade 4 classmates. That season, Kawhi Leonard was the best player in the NBA, and Canada, behind the Raptors, had begun to puff out its chest.
There was no apologizing in Drake’s sweatshirt or Terry Booth’s public appearances, or when Booth negotiated with Heineken, Nelson Peltz, or Coca-Cola. The world was re-evaluating the country, and marijuana, slowly, cautiously, was attracting the mainstream: alcohol companies, tobacco, shampoo, supermarket chains. Businesses were curious about marijuana, and to get in, brands had to come to Canada.
Bruce Linton hugging Drake in a Kawhi sweatshirt at the Raptors game suggested that the value proposition had changed: We don’t need you, America. We’re doing fine on our own.
Acreage Holdings had ten times Canopy’s revenue, but Canopy still had a market cap that was one hundred times bigger than Acreage, because the U.S. hadn’t caught up yet with Canadian financings and public markets. Alison Gordon says that in late spring and early summer 2019, Canada had all of the world’s marijuana prestige.
For instance, MedMen was an American chain of California dispensaries who hired Spike Jonze to direct its commercial. Its executives flew in private jets and had a marriage counsellor on staff. But founder Adam Bierman needed to fly to Toronto when looking for a reverse merger on the Canadian Securities Exchange and $30 million in investment capital. MedMen had retail locations on Fifth Avenue, off the Strip in Las Vegas, and on Abbot Kinney in Venice Beach, but it was Captor Capital — a Canadian firm — that first valued the chain of retailers to be worth over $1 billion. (It’s a penny stock now, but those were the days.)
The Americans, because of banking restrictions due to federal laws, still couldn’t raise money for their pot companies. Bruce Linton, on the other hand, could sit back, and investment bankers would bring money to him. And he spent it. Money circulated around him because he had to deploy this war chest, this capital, to get his next cash infusion. Companies in Florida and Los Angeles were outside of this flow of cash. The cash was in Smiths Falls.
Early summer 2019, if you wanted a hit single, you called Drake, who was in Toronto; if you wanted to list your cannabis company, you raised money on Bay Street, in Toronto; if you had an idea for a CBD-infused dog food or, if you were Steph Curry or Kevin Durant of the Golden State Warriors on your quest for a consecutive title, you had to come through Toronto, where Drake sat courtside with Bruce Linton, smiling from ear to ear. Outside, in Jurassic Park, as the ESPN producer told his reporter, the people got stoned.
Seven billion dollars, according to Deloitte, is the tally Canadians would spend on legal and illegal weed in 2019. Marijuana created a population of new-money Canadian millionaires. Canada had hardly invented marijuana. But we repackaged it with legalization — repopularized it — and created the federal template for a marijuana industry, which meant huge tax dollars and jobs. Watching the final seconds of the Raptors semifinal game against Philadelphia, when Kawhi Leonard’s shot hit every corner of the rim before it bounced in, it was a good time to be in weed.
In three years, Canopy had skyrocketed from a $300 million to a $20 billion company. It was a start-up. At the end of April 2019, Canopy was trading at $69.90 and Linton had 2.5 million shares. He didn’t get a new car, a new house — didn’t buy anything. He thought night and day about work. When Drake came over to Bruce to exchange hugs, Linton played it cool. He already worked with Martha Stewart and Snoop. Beverages, vapes, and edibles were going to be legal in a few months, and Canopy had been built in that abandoned Hershey factory in anticipation of that very day. “I want effect and duration in a format nobody has,” Linton says. He didn’t smoke weed. But he would take an edible or pop a weed lemon iced tea. He built his company for people like him and he was good at making people believe.
Once, he gave his entire board marijuana drink samples. He smiles when he tells me that story. These were serious business people. But they were also in the business of getting fucked up, and Linton says the board took the drinks, got giggly, then got weird. By the time he put them into limos to take them back to their hotels, he says, some of them couldn’t even stand. Working in weed wasn’t like working in widgets. Taking mushrooms, for Terry Booth, was just part of the job. And in a moment of perfect-bliss synchronicity, on June 14, the day the Raptors beat the Golden State Warriors to win their first championship in franchise history, Health Canada announced edibles, drinks, and vapes would be legal marijuana products for sale starting October 17, 2019, one year after legalization — Cannabis 2.0.
“Cannabis was a dirty, smelly business, and it was filled with criminals, and then, after Trudeau, people were interested in being in the business. Until then, I couldn’t find anybody who wanted to go down this rabbit hole,” Lorne Gertner says. “All of a sudden, cannabis goes through the roof. I had weed stocks trading at a dollar, then five dollars, then ten dollars — then fifteen, then twenty, then thirty dollars — seventy bucks? Everyone was like, ‘What the fuck? This is amazing.’ But it’s what I’ve been telling you people for years: weed is the best thing on earth.”
Deloitte estimated that the newly legalized Cannabis 2.0 products could be worth $2.7 billion, on top of the $16 billion already estimated from legalized cannabis sales. And while the 2.0 products were difficult and expensive to produce, they offered better margins than flower. But, despite the rosy appearances, there was also serious trouble afoot.