Business-owner Don Briere says he is about to secure leases on several storefronts across Toronto to fuel an aggressive expansion of his B.C.-based Weeds Glass and Gifts chain, which lists four locations as currently operating in Ottawa and Vancouver.

Ontario’s dispensary operators are facing an existential dilemma: Shut down in the hopes of securing a coveted cannabis retail licence from the province by next April or continue selling a drug they say should be made easily available now more than ever.

Industry insiders expect that owners of many of the 100 or so dispensaries in and around Toronto will plan to go legal. To do so, they will have to shut down their operations by the legalization date of Oct. 17, when the only way to buy legal recreational cannabis in Ontario will be through the provincial government’s online portal.

On the cusp of federal legalization, business-owner Don Briere says he is about to secure leases on several storefronts across Toronto to fuel an aggressive expansion of his B.C.-based Weeds Glass and Gifts chain, which lists four locations as currently operating in Ottawa and Vancouver.

The underground entrepreneur, who was once arrested for running B.C.'s largest network of illegal marijuana grow operations in the 1990s, says he plans to pursue licences from the Ontario government to sell the drug. But, Mr. Briere says he will not obey a recent call from the Ontario Progressive Conservative government for these grey-market entrepreneurs to “stop now” and close their stores.

“At one point in time, I was sentenced to seven years in prison to do what I’m doing right now,” Mr. Briere said. “And if you think they’re going to tell me to stop and I’m going to stop? It’s not going to happen.”

Earlier this month, Tory cabinet ministers said the province, like the federal Liberal government, is intent on crushing the underground trade in the drug. They said upcoming consultations with communities and stakeholders will determine if and how those who have sold the drug illegally in the past should be allowed into the regulated sector come April.

No one is tracking the number of Canada’s illicit bricks-and-mortar dispensaries, which insiders estimate at several hundred, or the exploding number of online retailers now postering many of the country’s largest cities with advertisements for their delivery services. In total, Canada’s underground trade is estimated at about 400,000 kilograms a year, which dwarfs the legal medical cannabis system that shipped 33,000 kilograms of product to as many as 168,000 patients across the country last fiscal year.

Activists in Ontario say they deserve to compete for these retail licences with large cannabis firms and pharmacy chains. Alberta has banned anyone tied to the illicit trade from joining its legal industry, while British Columbia has signalled only those involved with gangs or large networks of illegal businesses will be kept out of the regulated sector.

Abi Roach, director of the non-profit dispensary trade group, the Ontario Cannabis Consumer & Retail Alliance, said those activists who pushed for legalization now have to endure some short-term pain in order to transition their businesses to the legal market.

Ms. Roach, who founded Canada’s longest-running cannabis lounge, the HotBox Cafe, in Toronto’s Kensington Market neighbourhood, said she is looking to expand her business to five or six other locations in and around the city. Those shops will sell paraphernalia – but not cannabis – while she awaits an eventual licence from the government to transition them into legal dispensaries. She said there is now a rush of investors from all different backgrounds looking to secure leases for storefronts that they are willing to let lay fallow until the provincial licensing regime is up and running.

“What you saw happen in Calgary, when it came to legal cannabis, will happen in Toronto as well,” she said. “Essentially, every piece of retail on the market will be gone by October. Definitely.”

Paul Lewin, a criminal lawyer who represents clients in the illicit sector, said the interim period of eight months between now and legal face-to-face sales will likely be a time of great confusion for everyone in Ontario.

“Things aren’t going to work right, from October until we have licensed private stores,” he said. “People are going to be confused believing it’s legal but not really having a store where they can go and get it.

“Consumers, the stores, everyone’s going to kind of feel like it’s going to makes sense to have grey-market dispensaries while we wait for actual legal dispensaries.”

Those shops that do remain open are likely to see strong demand from consumers, who may not trust the government-run website, according to Rielle Capler, interim executive director of the Canadian Association of Medical Cannabis Dispensaries. Ms. Capler, a PhD student at the University of British Columbia, said her research has shown that even when patients have access to the federal mail-order system for medical marijuana, many prefer to keep buying from illegal dispensaries for the “the in-person service that they get.”

Mr. Briere’s empire, which has more than a dozen shops open in five provinces, has ebbed and flowed as police have raided his stores or municipalities have secured injunctions to outlaw his businesses – often a more effective approach to shutting him down. He has said he grosses millions of dollars a year in sales from his network of franchises and is ready to fight in court if he is raided again or shut out of Ontario’s legal retail system.

“Their terms of surrender [in the war on drugs] are not acceptable to us."