So I have recently set up dovecot with a virtual users dovecot.passdb
file, but when I attempt to telnet in, it fails because my virtual
users don't have proper permissions to create mailboxes.

I don't want to have to create actual users for each email account.
Any idea as to what to do?

The error that dovecot logs: dovecot: Dec 28 13:06:28 Error: IMAP(user1): mkdir_parents(/var/mail/ folders/user1) failed: Permission denied dovecot: Dec 28 13:06:28 Error: IMAP(user1): Mail storage creation
failed with mail_location: mbox:/var/mail/folders/user1/:INBOX=/var/ mail/user1 dovecot: Dec 28 13:06:28 Error: child 27667 (imap) returned error 89

my [test] passdb file: user1:{PLAIN}pass1:2001:2001:User 1 Name:/var/mail/folders/user1::
mail_plugins=cmusieve user2:{PLAIN}pass2:2002:2002:User 2 Name:/var/mail/folders/user2::
mail_plugins=cmusieve user3:{PLAIN}pass3:2003:2003:User 3 Name:/var/mail/folders/user3::
mail_plugins=cmusieve user4:{PLAIN}pass4:2004:2004:User 4 Name:/var/mail/folders/user4::
mail_plugins=cmusieve

Conf settings: -bash-3.2# /usr/local/sbin/dovecot -n

1.0.13: /usr/local/etc/dovecot.conf

base_dir: /usr/local/var/run/ log_path: /var/log/dovecot.log info_log_path: /var/log/dovecot.info.log protocols: imap listen: *:143 ssl_disable: yes disable_plaintext_auth: no login_dir: /usr/local/var/run//login login_executable: /usr/local/libexec/dovecot/imap-login login_greeting: Hi buddy, have an account ? max_mail_processes: 2048 verbose_proctitle: yes first_valid_uid: 1000 last_valid_uid: 5000 mail_location: mbox:/var/mail/folders/%u/:INBOX=/var/mail/%u mail_debug: yes mbox_read_locks: dotlock fcntl auth default: verbose: yes debug: yes debug_passwords: yes passdb: driver: passwd-file args: /usr/local/etc/dovecot.passdb userdb: driver: passwd-file args: /usr/local/etc/dovecot.passdb socket: type: listen master: path: /usr/local/var/run/dovecot-auth-master mode: 432 user: dovecot group: mail