Canadian Cannabis Growers Are Watching Democrats Who Aim To Rewrite US Cannabis Laws – Smithers Interior News

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More than three years after legal cannabis arrived in North America nationwide, Congress is once again trying to follow Canada’s lead by ending longstanding federal prohibitions on marijuana in the United States.

A Wednesday meeting of the House Rules Committee set the stage for debate Thursday and a vote as early as Friday on New York Rep. Jerry Nadler’s Marijuana Opportunity Reinvestment and Expungement Act.

If passed by both the House and Senate and signed by President Joe Biden, the bill – known as the MORE Act – would help pave the way for industry expansion by declassifying marijuana as a controlled substance.

But unlike Canada, the centerpiece of the effort is criminal justice reform: in addition to imposing sales taxes and allowing access to financial services, the bill would eliminate criminal penalties and establish a system for overturning cannabis-related convictions.

“Today in America, you are more than three times more likely to be arrested for cannabis if you are black,” committee chair Rep. Jim McGovern said as Wednesday’s hearing began.

“Black and brown Americans use cannabis at about the same rate as everyone else, but if you look like me, you’re much less likely to face the same penalties. None of us should agree with a system that treats people differently based on the color of their skin.

The bill still has a long way to go, especially in the Senate, where Majority Leader Chuck Schumer, another New York Democrat, is expected to prioritize his own bill: the Cannabis Administration and Opportunity Act. , expected in the upper house next month.

However, industry watchers in the United States and Canada have already seen this film.

“I’m skeptical whether the Senate is actually going to engage in this particular legislative agenda, let’s put it that way,” said Jaclynn Pehota, executive director of the Association of Canadian Cannabis Retailers.

“I remain skeptical of the priority this represents, in any significant way, for the people who actually shape the political agendas.”

Regardless of their odds, both bills were shaped and informed by Canada’s experience in the legal pot landscape, said David Culver, vice president of global government relations for Smiths Falls-based Canopy Growth Corp. , Ontario.

“They know the Canadian model and the pros and cons of the system because I talk about it all day, every day,” said Culver, who regularly lobbies Capitol Hill for one of the biggest players in the market. Cannabis legal in Canada.

Like smaller state-level markets across the United States, the Canadian market has been something of a “crystal ball” for lawmakers, he said.

“We can see what worked and what didn’t. They have taken to heart some of the lessons of these bills, but not others.

A significant issue is taxation, Culver noted: If excise taxes are too high, the cannabis black market will only continue to thrive. “You don’t need to look further than Canada and California to understand that years after legalization, this illicit market is still the dominant force.”

The American cannabis landscape is an ever-changing patchwork. The drug is legal for medical use in 39 states and for recreational use in 19, including DC But federal law still considers it a Schedule I controlled substance with a high risk of abuse and no accepted medical use , alongside drugs like heroin, LSD and peyote.

This makes it impossible for companies operating in a legal landscape like California or Colorado to use institutional banking or finance, access capital markets, or do business outside of their respective national borders. They also cannot deduct current business expenses, capital equipment, or payroll costs.

Unlike how Canada approached legalization in 2018, social justice issues such as the end of criminal penalties and the elimination of non-violent cannabis offenses are at the heart of both US bills.

“Already, Canada is kind of behind in this regard,” said Samantha McAleese, a doctoral candidate at Carleton University in Ottawa who specializes in cannabis-related criminal justice issues.

The government estimated that only around 10,000 people would be eligible under the system introduced in 2019 to speed up pardons for minor marijuana possession offences. McAleese said it’s likely that the lives of some 250,000 to 500,000 Canadians have been affected by the same charges, but most are ineligible due to other convictions on their criminal records.

“It would be too difficult, it would be too complicated, it would cost too much money, it would take too many resources” was the standard response to the efforts of advocates who pushed the government to adopt a broader and more comprehensive program, she says. .

“But when you compare that to the cost when someone can’t find a job or when someone can’t find housing, the costs are much greater to taxpayers than a one-time investment in a write-off process. Automatique.”

For Culver, the criminal justice reform component is the most urgent aspect of the American effort.

“The unintended consequences of inaction are serious,” he said.

“If we don’t act on cannabis reform sooner rather than later, we’re going to continue arresting hundreds of thousands of people – this year we’ll still arrest over 300,000 people – unless reform is carried out. “

If no bill survives Congress, the Senate still has options, such as the SAFE Banking Act, which has already passed the House and would remove federal barriers that prevent cannabis companies from accessing financial services. and capital markets.

Removing these barriers “would be really positive, from a Canadian perspective,” Pehota said.

“This would really accelerate and expand access to basic business services like banking and insurance, which remain very, very difficult for Canadian cannabis businesses to acquire due to the illegality of cannabis at the federal level in the states. -United.”

Legalization in the United States could be good for Canadian giants like Canopy and Tilray Inc. But for smaller players, the prospect of a legal market almost 10 times the size of Canada could be daunting.

“The United States is suddenly becoming both a threat and an opportunity,” said Michael Armstrong, a business professor at Brock University in St. Catharines, Ont., who watches the North American cannabis industry closely.

“Canadian companies that now have a few years of experience under a legal regime have learned to mass produce. (Legalization in the United States) would potentially be a big opportunity, a whole new market,” Armstrong said.

“However, it’s also a threat because right now the Canadian industry doesn’t have to worry about American competitors.

—James McCarten, The Canadian Press

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