While medical and recreational marijuana may be legal in some U.S. states, it is still an illegal substance on a federal level, while it is about to become totally legal in Canada. According to a statement by Todd Owen of the U.S. Border Protection, Canadian citizens who smoke marijuana or and involved in the pot industry, either in sales or investments, will not be welcomed to cross the border into the U.S. The cannabis trade is legal in Canada as of October 17th of this year. The U.S. official attitude is, keep it on your side of the border.
Canadians who are known to be involved in the cannabis trade, such as venture capitalist Sam Znaimer, have been barred from crossing the border south for a lifetime.
Officially, border officers won’t inspect all border crossers or question their smoking habits. Searches and questions will be more random. However, the officers may pursue a line of questioning if they have any suspicion that pot has crossed the border along with the smoker. Pot-sniffing dogs will be used to detect questionable odors.
So far, the policy is both clear and unclear. No Canadian marijuana is to end up in the U.S. But what about the investors who may, knowingly or unknowingly, hold shares in a Canadian cannabis business? How many shares are too many? There are thousands of Canadians who have invested in cannabis. Will they be barred from entering the U.S.?
On October 17th, when pot officially becomes a legal industry in Canada, Americans are expected to rush north for purchases or investments in the new legal commodity. But they won’t be able to bring American cannabis to Canada due to Canadian manufacturing regulations. While some Americans are in favor of negotiating legal cannabis transactions between the U.S. and Canada, Prime Minister Justin Trudeau is being coy and indicates that it is not his place to become involved in American policy.
There is much policy still to be worked out. According to immigration lawyer Len Saunders, the average cannabis investor is likely not be banned entry into the U.S. That would likely only apply to relevant employees in venture capital firms directly involved in managing cannabis accounts. Once marijuana officially becomes legal, it will no doubt become a booming business for Canada. At this point, it is unclear how American users and investors figure into Canada’s cannabis trade policy.
Trudeau’s coyness and deliberate non-involvement in U.S./Canada cannabis trade policy is not an accident. Canada will be the first industrial country to legalize pot on September 17th. Until that date, all Canadian provinces will allow pot growers to get their product ready in flower and oil form for official sale. Such preparation will ensure an abundance of supply for those who want it.
No doubt the cannabis will be huge in Canada. Although there will be a 10 percent excise tax on weed, this is much less than 50 to 80 percent tax currently levied on beer and wine. There is every chance that drinkers will forego their favorite tipple for another, cheaper kind of high.
In addition, 30 countries have already legalized cannabis for medical use. Most of these countries lack proper growing facilities. Canada is ready to become a major exporter of weed to those countries.
The profit potential is huge. Canada’s weed production will top 3 million kilos within two years. With domestic demand estimated at 1 million kilos, that leaves 2 million kilos of profitable weed available for export. It is estimated that the cannabis business will bring 5 billion into Canadian coffers.
Consequently, Prime Minister Trudeau is not about to get “high” and mighty about wanting America’s weed business. He has plenty of other options.