He was rarely seen without his baggy woollen cardigan, while behind his thick hedges of grizzly hair and beard a raffish grin could occasionally be spotted

The adjective grisly is used to describe something that inspires horror or disgust:

The homophonic adjective grizzly describes something that is gray in color, particularly fur or hair of that color:
When it comes to usage, don't just play dead.

The grizzly bear (Ursus arctos horribilis) is given its name because of the grayish appearance of its fur, despite being classified as the same species as a brown bear. The grizzly, native to North America, often has light-colored tips on its fur, giving it its grayish color.

The word grizzly derives from the Middle English grisel¸ which means "gray" and comes from the Anglo-French gris, describing the same color. The adjective grizzled means "having gray hair" or "marked by streaks of gray," but since human hair usually doesn't turn gray until later in life, the word comes with a suggestion of age or experience, as in "a grizzled veteran of the war against linguistic mistakes."
The confusion is understandable. Although they supposedly avoid contact with humans, a grizzly bear's sheer size and strength is enough to induce fear and bring a reputation for ferocity. The image of a bear attacking a person, or perhaps ransacking a campsite, could certainly inspire the kind of fear or dread suggested by grisly.

But grisly is in fact a distinct word, derived from the Old English grislic, related to an Old English verb meaning "to fear." That's why it's used to describe things like murder scenes and gory movies.

And if a grizzly bear is wanted for a gruesome crime? You might want to make sure your context is clear if you opt for grizzly over grisly, or you can opt for the pun, as some writers do: