Canadians run afoul of U.S. federal law
Lawyer warns investors to either get out of pot business or avoid travelling to the States
Cannabis is legal in Washington, Oregon and California, but Canadian business people are finding out the hard way that U.S. federal laws still bar them from crossing the border to service that flourishing industry.
U.S. immigration lawyers are regularly hearing from Canadians, including people who have invested in U.S. marijuana companies and professionals and service providers seeking to do business with those companies, who have been turned back from the border and sometimes issued lifetime bans on entering the U.S. because of their business dealings.
“I see one or two of these (a week),” said Len Saunders, a lawyer in Blaine, Wash.
“I see either simple denied entries or I see lifetime bans.”
Saunders said the cases started cropping up suddenly a couple of months ago, and unlike more typical refusals, where a Canadian citizen simply admits to having used cannabis in the past, these zero in on business travellers.
Sam Znaimer, a Vancouver venture capitalist, is one of the Canadians who made the uncomfortable discovery in early May at the Pacific Highway crossing.
“That particular day, I came to the border, I was asked some perfunctory questions, but immediately referred to secondary inspection,” Znaimer said.
In that four-hour examination, Znaimer said officers informed him his name had been flagged, but didn’t say why, and officers were only interested in his business dealings.
“It was clear this was entirely because I am an investor in cannabis companies,” Znaimer said.
“I was never asked about my personal consumption (of cannabis),” which is typically the reason Canadians are denied entry.
“What’s kind of crazy about that is, first of all, Americans (invest in cannabis companies) in the thousands and tens of thousands,” without any repercussions, Znaimer said.
In an emailed statement, a U.S. Customs and Border Protection spokesman said the agency enforces the laws of the United States.
“Although medical and recreational marijuana are legal in some U.S. states and Canada, the sale, possession, production and distribution of marijuana remain illegal under U.S. federal law,” wrote Jason Givens. “(The agency’s) enforcement of the law will remain unchanged.”
No one from U.S. Customs and Border Protection was made available for an interview.
However, emerging news of the denials has opened up a level of uncertainty for business people with the potential to put a chill on Canadian involvement in the legal U.S. cannabis business.
“It shouldn’t be a problem for people working for Canadian (cannabis) businesses in Canada,” so long as they aren’t travelling to the U.S. to advance that business, said Scott Railton, a Bellingham immigration lawyer.
The issue that Railton sees it is that, while sentiments toward legalization have evolved at the state level, “the statute for U.S. immigration hasn’t changed.”
“So you’re seeing more friction at the border, and that’s just how it’s going to be, and sometimes the results don’t seem fair,” Railton said.
Saunders advises Canadian business people to “either get out of the marijuana business or stop travelling to the U.S.”
Denying business people entry to the U.S. seems to counter recent indications that federal authorities would honour state legalization, said Stephen DeAngelo, a California dispensary owner and co-founder of the Arcview Group, an organization that researches and promotes investment in the industry.
Znaimer said his only recourse is to apply to Customs and Border Protection for a temporary exemption, but his experience has given him pause.
“I believe this was intended to put a chill on investors and business travellers from outside of the U.S.,” he said.
“In my case, it has done that very successfully.”