Pot industry investors should take heed of this fact

by Ephraim Vecina on 20 Sep 2018

With Canada’s pot industry flourishing as October 17 approaches, investors in the segment should be mindful of the significant powers held by U.S. border officers, according to Mike Niezgoda, a spokesman at the U.S. Customs and Border Protection office in Buffalo.

“Working or having involvement in the legal marijuana industry in U.S. states where it is deemed legal or Canada may affect an individual’s admissibility to the U.S.,” Niezgoda told Bloomberg.

“Although medical and recreational marijuana may be legal in some U.S. States and Canada, the sale, possession, production, and distribution of marijuana remain illegal under U.S. federal law,” Niezgoda added.

Weed company executives, in particular, are at especially grave risk as they might encounter accusations of trying to establish the marijuana trade within U.S. borders.

Investment in Canada’s recreational marijuana went into earnest last month with Corona beer marker Constellation Brands Inc.’s announcement of a $3.8 billion stake in cannabis giant Canopy.

Read more: Ontario’s brick-and-mortar cannabis shops to wait until April 2019

RioCan Real Estate Investment Trust has previously estimated that legalization can cultivate demand for as much as 200,000 square feet (19,000 square metres) of retail space nationwide.

In particular, Ontario and Alberta are predicted to enjoy significant windfalls due to the federal Cannabis Act.

Niezgoda warned that U.S. border guards have the authority to probe about current and past drug use, and that they are empowered to prevent users from entering U.S. territory for life.

This might pose serious problems for those trying to enter from the north. Authorities estimated that approximately 4.6 million Canadians regularly use the herb.

“A lot of people don’t understand that they are still going to have problems after legalization,” according to Henry Chang, partner at Blaney McMurtry LLP in Toronto who handles immigration law on both sides of the border.

“You need to stay off the radar -- if there’s something that prompts them to think that you are a marijuana user, the first question will be: ‘Do you smoke marijuana?’”

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