Grizzly means (1) grayish or flecked with gray, and (2) of or relating to the large brown bear native to western North America. It can also be a noun, short for grizzly bear. Grisly means gruesome, ghastly, or inspiring repugnance
There’s also gristly, which is used to describe meat with too much cartilage. And there’s grizzled, which is just a synonym for grizzly, usually used to describe a scruffy-looking older man. Grizzley is not a dictionary-recognized word.
Examples
These writers use grizzly well:
Tracy Province told police he meant to overdose on heroin and let Yellowstone National Park grizzlies have him for breakfast … [Mirror]
Brett Keisel’s grizzly beard ‘unleashed Super Bowl power’ [USA Today]
If we care about keeping grizzly bears alive, perhaps we should worry less about how they die. [The Missoulian]
And these writers use grisly well:
Castro, a Portugese journalist, was found dead in grisly crime scene at the InterContinental Hotel last month. [New York Daily News (article now offline)]
Or maybe she didn’t write it all, because not every state requires disclosure of a home’s grisly history before a sale. [Fox Business]

