The Cannabis Act, recently passed in Canada which legalizes the use of recreational marijuana, is creating opportunities and unpredictability across both sides of the U.S. and Canadian border. Cannabis experts and entrepreneurs in the U.S. might be finding their way to Canada, where their expertise could be put to good use. Canada provides a great opportunity for industry growth and U.S. businesses want in on that, particularly those from Colorado who are already engaged in marijuana production and sales and are looking to take advantage of this new legal environment.
What makes the business climate particularly appealing north of the border is that in Canada marijuana is legalized at the Federal level. As a result, companies may find it much easier to grow their business in Canada than in the United States. Since the use of marijuana is not federally legalized in the U.S., many businesses run into constraints such as being unable to use business loans or accept credit cards for purchases. Both are prohibited under federal law in the U.S.
In fact, the cannabis industry in the U.S. is essentially a cash-business because producers and sellers may not use the federal banking system. Canada has no similar limitations and businesses can produce and sell marijuana as they want to, of course, with some restrictions such as limiting sales to those 18 years old and above. Not only do those operating in Canada have access to the entire Canadian market, but they also can accept credit cards and sell their products online.
In addition to marketing opportunities in Canada, there is also the prospect for an increase in cannabis-related travel to Canada. Americans wanting to buy and use the marijuana products can do so legally when they cross the Canadian border. It is illegal to cross the U.S. border with marijuana, even if going to a state that has legalized it. However, Canada’s legalization could lead to greater opportunities for its tourist industry and provide marijuana producers an avenue to reach American consumers traveling to Canada.
Although some experts do not believe the recent legalization will catalyze U.S. based companies to migrate across the border, there are still many great options for marijuana businesses. In fact, local Texas musical icon, and unabashed cannabis user, Willie Nelson, took action to market his Willie’s Reserve brand in Canada even before the Canadian legalization. Only time will tell how many other U.S. producers will follow Willie’s move north, but it will be interesting to see how these new opportunities impact the cannabis industry on both sides of the border.
Read more posts by Jaime Montelongo