Gotta reply to this, since I live/work downtown.

The Downtown Eastside (DTES) is the oldest part of Vancouver. It's located next to the port, so it's where the rooming houses have historically been located. It's much the same as Pioneer Square in Seattle, the Tenderloin in SF, or Skid Row in L.A. It's also where Chinatown is located, a historically persecuted community.

It's actually a great neighbourhood. You'd be surprised at how many of the movies and TV series you watch are filmed there.

In Vancouver, due to NIMBYism, almost all of the social housing projects have been pushed into this one neighbourhood. Deinstitutionalization led to the rehousing of the mentally ill population into social housing. You also find marginalized populations such as indigenous people. Naturally, with that concentration, that's where you find the IV drug use, drug dealers, prostitution, etc.

For political reasons, welfare rates haven't budged in a couple of decades, so beyond housing and health care, the people in the social housing projects aren't well cared for. A lot of the residents collect bottles from trash, or beg for extra income. It's not uncommon for an IV drug user to have a $300/day habit. So naturally there's a lot of property crime and there's always been prostitution.

The court system is overwhelmed, and it's not economical to re-house the population in prison, so there's a revolving-door aspect to the police/court system here. Generally speaking, don't expect your bike to not get stolen, and don't leave valuables in your car or your windows will be smashed.

On the flip side, it's a really safe neighbourhood to walk around in, even at night. There's very little violent crime. Most of the shootings you hear about on the news happen in the suburbs.

There are genuine homeless people out there, but most of the "homeless" you see are just local residents who would rather hang out outdoors than spend their day in the dingy "single-room occupancy" bedbug-infested hotels they are forced to live in.

Gentrification is a big deal. In the past 10 years, the DTES has been rapidly been redeveloped with new condo developments, hipster coffee shops and high-tech startup offices. The social housing isn't going to move, so there's an interesting mix and substantial tension. A lot of the "blighted" buildings owned by slumlords that are sitting there in an unmaintained state are just being held until they can redeveloped into major condo projects. The non-subsidized low quality housing is disappearing rapidly, which is causing pressure on homelessness.

There's a lot of innovative work being done to change the situation. Places like the Crosstown Clinic are doing real internationally-recognized research and making real progress in figuring out how to treat the underlying causes of drug addiction. There are "harm reduction" programs in Vancouver that don't exist anywhere else. The government has stepped in and purchased a lot of vulnerable SRO housing stock and converted it to public housing to prevent a major crisis.

Vancouver is a hippie culture. If you scratch the surface, you'll soon learn about how draft dodgers from the '60s and '70s worked their way into the fabric and today's civic leadership.

As far as Marijuana goes, it's effectively legal via "prescription", and recently there has been a massive proliferation of "dispensaries". That said, it's still technically illegal here. Just over the border, in Washington State, it's now fully legal, and you see billboard ads for it everywhere. The Canadian federal government has just announced that they are going to legalize it for all of Canada.

There's a one block stretch on Hastings Street where some of the earliest marijuana shops are located. But generally speaking, the social ills of the DTES are associated with addictive IV drug use (heroin) and crack cocaine and not with social drugs like marijuana.

Most people are blind to the fact that there are downtrodden people everywhere in North America - they just aren't in the most visible of places. In the DTES, that population is concentrated in a small area where they just happen to be more visible than the same population in your home town.