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Up in smoke: Yes, there’s a chance Canadian marijuana workers, users and investors could face a lifetime border ban, but no, it’s not likely

Proactive Investors Friday, 14 September 2018
A shrill Politico headline Thursday sent cannabis stocks tumbling: Citing a “US official,” the headline claimed that “Canadian marijuana users, workers and investors risk lifetime border ban” if they try to enter the United States. The reality is not quite so sensationalistic. The story behind the headline has been going on for years -- nothing (absolutely nothing) has changed. The fact is that all Canadians who work in the cannabis industry do have a chance of receiving a lifetime ban on travel to the US, particularly if they do business in the US. As for marijuana investors and users? Far less likely. The reason for the fear mongering is simple: Despite the fact that certain states and provinces have legalized cannabis within their boundaries, the border is under federal jurisdiction. An impenetrable wall in between two relaxed jurisdictions Think of it as an impenetrable wall in between two relaxed jurisdictions. Cannabis, along with heroin and cocaine is a Schedule I substance, and any past or current association with the drug is considered to be a federal crime by the US government. “Although medical and recreational marijuana may be legal in some US States and Canada, the sale, possession, production and distribution of marijuana all remain illegal under US federal law,” said Kris Grogan, a public affairs officer from the US Customs and Border Protection (CPB), in a statement made to Proactive Investors. “CBP is always concerned about criminal activity at our US borders. CBP officers are the nation’s first line of defense, including prevention of illegal importation of narcotics, including marijuana,” added Grogan. And yet, many feel it was a knee-jerk reaction. “News is news and we know that,” said Sean Dollinger, chief executive officer and co-founder of Namaste Technologies Inc. “Have you ever been asked what shares you hold in your investment account? What happens if a mutual fund you’re invested in takes a position in a cannabis stock? Now, all of a sudden you’re exposed to risk of being boycotted from the US for life? I think it was taken out of context.” CEOs do worry about lifetime ban Aside from the direct importation of cannabis, many CEOs and those who work in the cannabis industry are legitimately worried about the cross-border situation. Proactive Investors spoke to three CEOs of cannabis companies, all of whom asked to remain anonymous due to those fears and reality of crossing the border. One equipment manufacturer CEO who was given a lifetime ban at the US border says he is not involved with the production, distribution or the sale of cannabis. But because the equipment his company sells is intended to be used by people in the cannabis industry, he was subject to a six-hour interview at the US border and told he was a “drug trafficker.” “It's my hope that others are bold enough to come forward and share their stories. I am even more hopeful that my case was an isolated incident and something that is no longer happening,” said the CEO. He said the situation had caused “great fear” among his staff and has hurt him when it comes to recruiting new staff. Wiping phones clean Another CEO, who runs a cannabis company that focuses on opportunities in California, spoke of wiping his phone clean every time he travelled to an event or business meeting in the US and erasing any mentions of his cannabis business dealings in the US. “I have to sanitize my phone as well as my online presence. The fact of the matter is that you can’t be too careful,” he said. “We are building a billion-dollar industry but we are being told we’re criminals. We are hoping things will improve, but for now it makes sense to be prudent.” Both the Canadian and US market looks huge In Canada, it is reported that the industry could generate more than C$7bn in its first year, according to a report from Deloitte, with thousands of Canadian jobs expected to be created as the cannabis market continues to grow. The US market also looks bright, according to RBC Capital Markets, where American cannabis sales are quickly catching up to those of beer and wine, and the market could be worth US$47bn within a decade. This fact was echoed by the CEO’s Proactive Investors spoke to. Many Canadian cannabis workers and CEOs say they need to be in the US market: in short, that’s where all the growth is. Missing out would mean missing a huge opportunity. In the meantime, they have a prickly border challenge to contend with. Temporary waivers may be the wave of the future Blaine, WA.-based immigration lawyer Len Saunders agrees that CEOs should sanitize their online presence because the federal law isn’t changing anytime soon. He says he’s seen a “tidal wave” boost of his business, particularly in the last 4-5 months, and is hearing far more inquiries from Canadians seeking waivers for inadmissibility because of cannabis. Saunders has clients that include Canadian professional snowboarder Ross Rebagliati, who won an Olympic gold in Nagano and founder of Ross' Gold, a Canadian medical cannabis branding company. The fact is simply, according to Saunders, when it comes to the border: “You are getting paid by your Canadian company which is making money through marijuana,” he said in an interview with Proactive Investors. “You are aiding and abetting.” The law is simple, says Saunders when it comes to federal law and cannabis. The fallout is much more complicated. Cannabis workers in Canada appear safe That said, Saunders said that he is not seeing bans on Canadian cannabis workers who strictly work in Canada, but only for those who are doing business in the US and or both the US and Canada. Anyone that has a lifetime ban on entering the US must obtain a waiver to temporarily allow them to enter the country. Saunders helps multitudes of clients to obtain them and describes it as a “lifetime relationship.” “Things are busier than ever,” he says. “I expect that will continue to grow.” Future appears clear and concerning For now, Canadian cannabis workers have a challenge on their hands when it comes to doing business in the US. In short, if Canadians are doing anything with the cannabis industry in the US, they face a lifetime ban. The reality is much more grey and murky: most people will continue to cross the border without any problems, says Saunders. He says fear-mongering is common. In short: US law doesn’t appear to be changing anytime soon and Canadian cannabis workers who do business in the US need to be smart, savvy and reasonable when crossing the border.
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News video: Canadian Cannabis Users, Workers Could Face Lifetime US Ban

▶ Canadian Cannabis Users, Workers Could Face Lifetime US Ban 00:52

​Workers and investors in the recreational marijuana industry may be viewed as drug traffickers.

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