CBC reporter Jesse Johnston said the scene, police were wandering through the protest taking video of people openly selling marijuana.
Police swooped in on a pot vendor, and officers formed a human chain around the man while police put handcuffs on him.
Demonstrators came running over trying to get inside the wall police had formed, said Johnson. Police took two people away in handcuffs. One man claimed police had pepper-sprayed him.
Protesters briefly took over Howe Street chanting, " let them go," but quickly dispersed.
Earlier this month, the City of Vancouver said the Cannabis Day event had grown to festival-size proportions with vendors and concessions and was effectively a festival operating without a licence.
The city said it had grown far beyond its roots as a simple protest and ordered it to cease and desist.
However, pot activist Jodie Emery vowed the event would go ahead anyway. Emery said it could still be held as a protest without the concessions.