Le­gal pot cre­ates risk for in­vestors at U.S. bor­der

Mar­i­juana ex­ec­u­tives may be seen as en­gaged in crim­i­nal ac­tiv­ity, ex­pert says

Calgary Herald - - CITY + REGION - GREG QUINN

Cana­di­ans about to en­joy le­gal mar­i­juana, or even in­vestors in the sec­tor, could be in for a new headache at the U.S. bor­der.

Bor­der guards have broad pow­ers to ques­tion Cana­di­ans on their cur­rent and past drug use and could de­clare users in­ad­mis­si­ble, per­haps for life, im­mi­gra­tion ex­perts say. U.S. of­fi­cials also warn any form of participation in the sec­tor could also see some­one turned away, sig­nalling po­ten­tial headaches for in­vestors.

Canada is due to le­gal­ize recre­ational use of the drug on Oct. 17, but it is still il­le­gal un­der U.S. fed­eral law, de­spite ma­jor states like Colorado and Cal­i­for­nia loos­en­ing re­stric­tions. Justin Trudeau’s gov­ern­ment and travel agents are warn­ing Cana­di­ans to make sure they have no trace of the drug in their cars or lug­gage.

“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.,” Mike Niez­goda, a spokesman at the U.S. Cus­toms and Bor­der Pro­tec­tion of­fice in Buf­falo, said in an email.

Sim­i­lar com­ments made by a bor­der of­fi­cial to Politico sent U.S.traded shares of Cana­dian mar­i­juana com­pa­nies tum­bling Thurs­day. Cannabis stocks have been soar­ing since mid-Au­gust, when Canopy Growth Corp. an­nounced a $5-bil­lion in­vest­ment from Con­stel­la­tion Brands Inc., the biggest deal in the sec­tor to date.

“A lot of peo­ple don’t un­der­stand that they are still go­ing to have prob­lems af­ter le­gal­iza­tion,” said Henry Chang, a 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?’ ”

Those at risk in­clude peo­ple in bor­der towns who fre­quently cross over to buy gas or milk, tourists and trans­port work­ers who haul bil­lions of dol­lars a month of goods into the U.S. Even ex­ec­u­tives at weed com­pa­nies could be ac­cused of bring­ing the trade where it’s not wel­come.

The rub is that it’s il­le­gal to have smoked the drug in Canada be­fore Oct. 17, and it’s il­le­gal to lie to any bor­der agent who asks about it. Some 4.6 mil­lion Cana­di­ans use weed, about 16 per cent of the adult pop­u­la­tion.

“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 said.

An­other of­fi­cial said those par­tic­i­pat­ing in the mar­i­juana business may be turned away at the bor­der. “Fa­cil­i­tat­ing the pro­lif­er­a­tion of the le­gal mar­i­juana in­dus­try in U.S. states where it is deemed le­gal or Canada may af­fect” a per­son’s en­trance into the U.S., Todd Owen, ex­ec­u­tive as­sis­tant com­mis­sioner for the Of­fice of Field Oper­a­tions at the U.S. Cus­toms and Bor­der Pro­tec­tion agency, told Politico in com­ments pub­lished Thurs­day.

While Owen didn’t spec­ify any min­i­mum level of in­vest­ment, he sig­nalled the fo­cus was more on those bring­ing the sec­tor to the U.S., which could have im­pli­ca­tions for the bur­geon­ing sec­tor. Un­til his com­ments, the BI Canada Cannabis Com­pet­i­tive Peers in­dex had gained nearly 50 per cent since the Canopy-Con­stel­la­tion deal was an­nounced. In­di­vid­ual stocks have posted more out­sized gains, with Til­ray Inc. up more than 600 per cent since its July IPO.

Cana­dian Pub­lic Safety Min­is­ter Ralph Goodale has of­ten said he’s work­ing with U.S. law en­force­ment to clar­ify the changes and make sure the bor­der re­mains smooth. The ad­vice of Goodale and Trudeau is to be hon­est at the bor­der — and make sure you’re not car­ry­ing.

“De­spite one-in-eight Cana­di­ans us­ing cannabis to­day, 400,000 peo­ple move be­tween our two coun­tries ev­ery day al­most en­tirely with­out in­ci­dent,” Goodale spokesman Scott Bard­s­ley said by email. “Of­fi­cials from the United States have said that they do not plan on chang­ing their ques­tions at pri­mary in­spec­tion af­ter cannabis is le­gal­ized in Canada.”

The gov­ern­ment is also ramp­ing up ad­ver­tis­ing re­mind­ing Cana­di­ans of their obli­ga­tions to obey the laws of both coun­tries. That mes­sage hasn’t “fully sunk in” yet, es­pe­cially with more ca­sual tourists, said Con­ti­nen­tal Travel Group pres­i­dent Daryl Sil­ver.

Too much zeal by bor­der agents could en­cour­age even more Cana­di­ans to stay home, at a time when Pres­i­dent Don­ald Trump is tar­get­ing the coun­try in trade ne­go­ti­a­tions. “We al­ready no­tice some­what of a trend of some peo­ple not go­ing to the U.S..” said Sil­ver. “This could add to that.”

Cana­di­ans spent $19.8 bil­lion on tourism south of the bor­der in 2016, ac­cord­ing to the In­ter­na­tional Trade Ad­min­is­tra­tion. The fig­ure was $27.2 bil­lion in 2014 when the coun­try’s cur­rency was close to par with the green­back.

“Peo­ple are care­less and I think peo­ple will be caught by ac­ci­dent and this will cre­ate prob­lems,” said Lorne Wald­man, an im­mi­gra­tion lawyer.

“No lawyer could coun­sel any­one to lie to a bor­der agent, but if an agent asks the ques­tion, I sup­pose they could de­cline to an­swer.”

That may be tricky for peo­ple who work in the mar­i­juana in­dus­try, given bor­der agents of­ten ask for a vis­i­tor’s oc­cu­pa­tion.

While you may not be barred en­try just for hav­ing a job that’s le­gal in Canada, mar­i­juana ex­ec­u­tives who work with U.S. com­pa­nies may be seen as be­ing en­gaged in crim­i­nal ac­tiv­ity, Chang said. “That you are go­ing to start see­ing some prob­lems with — es­pe­cially if they buy oper­a­tions or start do­ing business with a U.S. com­pany,” he said.

A lot of peo­ple don’t un­der­stand that they are still go­ing to have prob­lems af­ter le­gal­iza­tion.

JULIE OLIVER

Al­though Canada is due to le­gal­ize recre­ational use of mar­i­juana on Oct. 17, the drug re­mains il­le­gal un­der U.S. fed­eral law.

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