January 3, 2017 2:07 pm

Why Donald Trump could be the Canadian marijuana industry’s secret weapon

An employee trims medicinal marijuana plants at Tweed, in Smith Falls, Ontario, Dec. 5, 2016.

THE CANADIAN PRESS
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In the last few years, attitudes to marijuana in the U.S. appeared to be easing.

And in many ways, they have. Four states have fully legalized recreational cannabis, and four more voted to follow them in November.

But the same election that doubled the number of pot-tolerant states brought Donald Trump into the White House. With him come people in key cabinet positions who loathe marijuana and have at least some power to act on it. Marijuana is still illegal under U.S. federal law.

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The likely consequence: an end to the easygoing attitude that the Obama administration brought to states that chose legalization.

READ: Four more states vote to legalize recreational marijuana

Canada, on the other hand, will soon be the only industrialized country where marijuana is fully legal. The result, a Canadian pot entrepreneur argues, is an opening for Canada to become a global centre of medical cannabis research.

“It creates a window of opportunity for us to do research without competition from America,” says Bruce Linton, CEO of Canopy Growth, a large medical marijuana growing facility in Smiths Falls, Ont. 

U.S. companies that want to raise capital to develop cannabis products — to do serious research on cannabis-based pharmaceuticals, for example — have trouble raising capital because of their dodgy legal status, he explains:

“If there is a probability (of arrest), it costs you more to get capital versus if there’s none,” Linton says. “It can’t operate where there is a whole bunch of uncertainty about whether it’s lawful.”

In June, a medical cannabis processing plant operating openly in Santa Rosa, Calif. was closed by police, who confiscated millions of dollars worth of machinery and arrested the owner. It has since reopened, though police still have the seized equipment.

Legal marijuana producers say their product is both safer and cheaper than black market. Alan Carter has the story.

In its final report, the task force studying marijuana legalization called for the federal government to subsidize cannabis-based pharmaceutical research.

“It means that that portion of the business has political support as well as capital market support,” Linton says.

So if all the people buying, selling, growing and using pot in states where it’s legal are breaking U.S. federal law, why aren’t they being prosecuted?  The short answer is that the Obama administration decided not to go there.

A memo written in 2013 by a senior Obama-era U.S. Justice Department official, James M. Cole, ordered federal prosecutors to take a tolerant attitude to harmless cannabis use in states that had legalized it.

But the “Cole Memo” — and what has been described a “fragile truce” between Washington and pot-tolerant states — is only as good as the political support behind it.

READ: Two decisions Parliament will have to make about pot-impaired driving

Outgoing president Barack Obama seemed to signal recently that he thought national legalization of marijuana was unavoidable, saying in November that “treating this as a public-health issue, the same way we do with cigarettes or alcohol, is the much smarter way to deal with it.” The American public, he added, is “in favour, in large numbers, of decriminalizing marijuana.”

But Jeff Sessions, Trump’s conservative pick for the Attorney-General position, has an uncompromising attitude to pot.

“We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized,” he told a congressional hearing in April, at which he condemned legalization in Colorado.

“Good people don’t smoke marijuana.”

(In the 1980s, a congressional hearing heard testimony from a prosecutor who said that Sessions had told him he had thought the Ku Klux Klan “was OK until I found out they smoked pot.” Sessions, asked about the remark, did not dispute that it had been made.)

READ: Donald Trump’s attorney general pick Jeff Sessions brings racially charged past to light

During the U.S. presidential campaign Trump himself said that marijuana legalization was up to the states, but at another time, speaking of Colorado’s legalization, said, “I think it’s bad, and I feel strongly about it.”

Trump’s incoming vice-president, Mike Pence, presided over one of the U.S.’s most severe marijuana laws as governor of Indiana. Simple possession of any amount of cannabis in Indiana, as a first offence, can mean up to six months in jail.

READ: Smelly, fussy, humid: Why you may not want to grow your own legal pot

In 2013, he spoke out against an attempt to soften them, saying that “we need to focus on reducing crime, not reducing penalties.”

If the U.S. federal government wants to make life miserable for producers and sellers of cannabis in tolerant states, there are many ways to do it.

Whatever ends up happening, the uncertainty will discourage investment.

A medical marijuana company is expanding with a new grow facility at the Edmonton International Airport.

In the meantime, Ottawa-based immigration lawyer Betsy Kane says she’s seeing a steady flow of Americans wanting to work in Canada’s marijuana industry.

“There are some coming from California, from Maine. Right now the whole thing is new. Once things become legal in Canada across the country I think we are definitely going to see a huge demand.”

 

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