Last week, the city said it would start regulating the 80 dispensaries selling marijuana that have popped up in recent years because the federal government has left a legal vacuum.
Federal Health Minister Rona Ambrose quickly condemned the idea, saying the dispensaries are illegal and should just be shut down.
"Storefronts and dispensaries do not operate within a 'grey zone,' and the law is clear; they are illegal," Ambrose wrote in a letter to Mayor Gregor Robertson.
Now some licensed marijuana producers say they agree — there is no grey area — pointing out there is no legal way for dispensaries to get their weed.
Mark Zekulin is the vice-president of Tweed, one of the first Canadian companies licensed by Health Canada to grow medical marijuana questions where Vancouver's dispensaries get their product.
He says there is no legal way for stores to get pot because licensed growers can only sell cannabis directly to patients by mail.
"None of us are selling it to dispensaries, So the question is, ' Where are they getting it from?' And that is a question people need to be asking a little better," says Zekulin.
Zekulin says he fears the message city council is sending.
"It's black and white. It's an illegal system ... When you normalize and regulate and say that a criminal activity is OK, that sends you down a bad path."
'Some dispose of it by selling it to us'
But the operator of one of Vancouver's oldest dispensaries, Dana Larsen, says the Vancouver Dispensary Society sometimes gets cannabis from legally licensed "mom and pop growers."
"Some people are licensed by Health Canada to grow it, and sometimes even if they grow the right plant they end up with more than they need," said Larsen, the dispensary's director.
"Health Canada says they should dispose it, and some dispose of it by selling it to us — not quite what they meant — but that doesn't hurt anybody"
But that is what is concerning, says Zekulin. He fears some of the marijuana sold by stores may be sprayed with pesticides and not inspected as rigorously as it ought to be.
"By definition it is coming from a place that is not traceable and all the problems that comes with that."
But Larsen says the Vancouver Dispensary Society rejects a lot of cannabis that is offered, because it's not what it considers medical grade.
More growers concerned
Gary Leong, chief scientific officer for Aphria, which is licensed by Health Canada, is open to giving patients access to marijuana in a "convenient fashion," but says there needs to be regulation of the product.
"Who has the responsibility to ensure these products? Dispensaries are retail stores. Where is the liability when there is an issue with the product?"
Leong also worries dispensaries are making it easier for recreational users.
Dan Sutton, with Tantalus Labs, agrees dispensaries are not operations within the letter of the law, but says there is room for both in the system, as long as dispensaries sell high-quality cannabis.
"This is a competitive marketplace. If licensed producers don't think they are competing with dispensaries, they are living in an ivory tower. We are already competing with them"
It is expected that the issue will go to public consultation.