Law enforcement officials say Canada is no longer an importer of ecstasy -- it's become a major producer and exporter of the illegal street drug.

"We are seeing an increase in the number of meth labs and ecstasy-type labs cropping up," said Const. Howard Chow of the Vancouver Police Department.

In 2004, U.S. authorities seized 1.1 million Canadian-made ecstasy pills. Two years later, they seized 5.2 million pills.

Last week, Vancouver police dismantled a major international drug trafficking operation that operated from B.C., and shipped a wide variety of narcotics across the world. More than three dozen men were arrested.

"We've chopped the head off the snake," said Insp. Dean Robinson. "We've gone right to the top of this one."

In its annual report on the illicit drug trade, the RCMP said marijuana trafficking is largely dominated by outlaw motorcycle and Asian gangs.

"However, the presence of OMGs (bikers) within the marijuana production and smuggling markets appears to be surmounted by the sophisticated organized crime groups of Asian origins, especially those of Vietnamese descent," said the report, which was released Monday.

"In 2006, the collaboration among different organized criminal groups continued. While these groups controlled all facets of the marijuana trade, some independent growers limited themselves to the cultivation aspect and used brokers to distribute the product, such as Indo-Canadians involved in the commercial trucking industry."

The RCMP has noticed more "polydrug" seizures, as gangs that used to specialize in one type of drug now deal in several. The gangs also handle importing, exporting and trafficking of drugs.

"These organizations are powerful, well-connected and are dealing in high profit-yielding illicit ventures across the globe."

British Columbia has been a hotbed of pot production, but there has been a noticeable decline in seizures there since 2003, the report said.

"Several factors have contributed to this decline, such as increased enforcement, effective partnerships with governmental and non-governmental organizations, and displacement southwards of the technical expertise and knowledge required for setting-up and running a grow operation."

Seizure statistics in Ontario and Quebec were stable in 2004, it said.

B.C., Quebec, and Ontario account for about 90 per cent of Canada's marijuana production, the report said.

In the Central Canadian provinces, marijuana is primarily grown outdoors, while B.C. producers relied mainly on indoor grow ops, the report said.

"Nonetheless, both rural and urban properties were purchased by organized crime groups for the sole purpose of cultivating marijuana," it said.

"This trend indicates that, despite regional fluctuations, overall production of marijuana continues to flourish in Canada, as does the threat of organized crime groups supplying the illicit market."

Other drugs

In a two-year period, Canada has become a net exporter of ecstasy, once known as the "rave" drug but now available at a wide range of youth-oriented venues.

"Between late 2005 and 2006, Canada replaced the Netherlands and, to a lesser extent, Belgium as the primary supply source of ecstasy for its domestic trade and for the U.S. illicit market," the report said.

"Despite a small decline in the number of reported ecstasy laboratory seizures from 17 in 2005 to 15 in 2006, output capacities of actual labs seized during the past year were greater and demonstrated the stronghold of organized crime over production."

Another indicator of growing domestic production -- mainly in "super labs" operated by gangs -- is the increasing seizure of multi-tonne quantities of precursor chemicals from China, it said.

While there continues to be a myriad of organized crime groups linked to ecstasy trafficking and distribution, criminal networks with origins in Asia continued to dominate the domestic trade," it said.

"Indo-Canadian crime groups were again identified as multi-commodity smugglers of ecstasy, marijuana and/or ephedrine shipments, utilizing commercial land transport to deliver shipments southbound from Canada and sometimes returning with exchange commodities such as cocaine, currency and firearms."

Heroin is declining in importance as an illicit drug, being replaced by prescription-based opiates, it said.

Opium seizures jumped to 124 kilograms in 2006 from 16 kilograms in 2005.

The report found that methamphetamine traffickers are trying to lace so-called softer drugs such as ecstasy and marijuana with meth as a way to expand their market.

"Youth and young adults who party at raves and nightclubs appear to have a preference for methamphetamine tablets which they consider to be more recreational and therefore safer than other forms of the drug," it said.

About $2.3 billion worth of drugs, based on their estimated street value, were seized in 2006, the RCMP said.

All forms of cannabis -- marijuana, hashish, hash oil -- accounted for about 93 per cent of this total.

With a report by CTV's Todd Battis in Vancouver