Canadian Cannabis ‘Eh?

We all love our friendly neighbors to the north. They’ve given us poutine, Strange-Brew*, and two of the hottest Ryans America’s ever seen. Now we can add the legalization of recreational cannabis to the list of wonders to come out of Canada.

On October 17 Canada nationally legalized the sale of fresh/dried cannabis, cannabis oil, and plants/seeds. Edibles and concentrates will be legalized later in the coming months. Similar to the US (or should we say certain states in the US), the law mandates the purchase age be at least 18 and sets a strict set of rules for branding and packaging. Each province will also enforce their own specific regulations. And it comes as no surprise: there will be taxes. According to Bloomberg, “The Canadian government [...] plans to apply a marijuana excise tax of 10 percent on the product price, or C$1 per gram, whichever is higher. The provinces will also apply their own sales tax, as well”. It’s interesting to note however, that in most cases, the tax on alcohol in Canada will be higher than on cannabis.

What does this mean for us cannabis users stateside? Canada has been a long time destination for American tourists not only because they are lovely, polite people, but also because in some provinces the drinking age is only 18. Now Americans will be able to enjoy cannabis in any province across the border if they are of legal age. Canada will be ready with newly opened smoke lounges and dispensaries, along with the county’s medicinal shops- many of which opened in the early 2000s.

The Washington Post states, “At Higher Limits Cannabis Lounge, where adults smoke medical marijuana while sitting on couches or bar stools and smoking devices including bongs, co-owner Jon Liedtke has big plans to welcome American tourists. ‘We definitely are not going to miss out on the opportunity,’ he said. Liedtke sees Canada as on the vanguard, just the second country to nationally legalize recreational marijuana after Uruguay, which began legal sales in 2017. But he worries about U.S. law. ‘All of the Americans are going to be welcome. Getting back, though, is going to be an issue.”

Because cannabis is still a Schedule I substance (you know, like heroin), it is a federal offense to bring it into the US or bring US product to Canada. Legally it is considered drug trafficking and distribution. This might be a real shock to people crossing the border, particularly in states with medicinal, even recreational cannabis laws such as Washington state. “Crossing the border with marijuana is prohibited and could potentially result in seizure, fines, and apprehension,” U.S. Customs and Border Protection said in a statement. [...] Customs and Border Protection also can ask Canadians whether they have ever used drugs, and if they say yes or refuse to answer, they can be barred from entering the United States for life,” Washington Post reports. It seems Americans are encouraged to bong rip with our neighbors up north, but if you go on a three day bender in Bamf, best to keep any cannabis use to yourself or Jeff Sessions might not let you back in. The real irony here aside from American law, is that Prime Minister Trudeau has admitted to smoking cannabis, even during his time in office.

Now, while it’s important to note that consuming cannabis outside of the country will be a no-no, flying with weed within Canada will be completely legal! Because cannabis will be legal throughout The Great White North, “travelers flying within the country will be able to pack up to 30 grams of cannabis—(and) are free to pack cannabis products in either their checked luggage or a carry-on” according to Transportation Minister Marc Garneau. So while you can’t take it home, you can fly domestically with more than an ounce!

Novelty aside however, Canada’s national legalization will actually have a broad reaching effect on us as American cannabis users. Next to Uruguay, Canada will be the only other country in the world to legalize cannabis. This means on a global level, Canada has a huge competitive advantage over other markets, including the US. According to NPR, “Daniel Yi, SVP of MedMen, says the company will be going public in Canada and hopes to raise capital abroad.” Meaning US companies are quickly investing in Canada’s market along with competing countries. Because US federal law prohibits the use and sale of cannabis, companies need to find other places to expand. According to the same segment, “Federal law states if a company wants to trade on the Nasdaq or federal exchange, and does so according to their home country’s law, they can trade freely.” Meaning a Canadian company can legally operate in our markets because they are acting according to Canadian law. “The promise of legalization has spawned a so-called green rush. The industry is now worth more than C$80 billion ($60.6 billion). On the Toronto Stock Exchange, the market value of Canopy Growth Corp. (ticker symbol: WEED) alone is almost C$15 billion, more than major producers of conventional commodities, including U.S. aluminum giant Alcoa Corp” according to Bloomberg. To put it in perspective, Canopy at the moment being called the Google of Cannabis.

It seems Canadian cannabis may spell big trouble for the US cannabis industry. In the end, what are we as Americans to do?

Well, we can do the most American thing there is to do: vote.

According to Canopy’s CEO, the company is looking to move into the American market as soon as they can do so legally. With midterm elections roughly a month away, that move could happen quicker than expected. As mentioned by Bloomberg, “should Democrats take the house in November, there might be a change to the law”. Even if democrats don’t end up shifting the power in November, at least four states will have cannabis legalization measures on their ballots, such as Canada’s border neighbor Michigan. Michigan passed medicinal use in 2008 but, “a question on the November ballot asks Michiganders whether to make it legal for adult recreational use.” So while it seems the future is murky for American cannabis, a change in American law, might be the first step.

Either way, mountie salute our northern neighbors for opening their borders to cannabis! And as cannabis issues rapidly change, it’ll be interesting to watch Canada and how they grow the industry. It’s legal now, yah’ know?

*Strange-Brew is actually an American film.

*Information courtesy of Washington Post, Leafly, Bloomberg, and 'Here & Now.'

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