Posted on 10/16/2018 2:58:30 PM PDT by 2ndDivisionVet
An American cannabis producer took out a full-page ad in Tuesday’s Wall Street Journal warning that the United States is “rapidly losing” its competitive advantage in the industry to Canada, the first G7 member to greenlight legal recreational pot.
An American cannabis producer is warning President Donald Trump that Canada is poised to dominate the North American marijuana industry unless the United States takes steps to eliminate barriers to financing and market capital south of the border.
A full-page ad in Tuesday's Wall Street Journal, framed as a plea to the White House and its most prominent occupant, warns the U.S. is "rapidly losing" its competitive advantage to Canada, where recreational pot becomes legal at midnight.
"The cannabis industry is legal in 31 states, yet most domestic companies do not have access to traditional banking or institutional financing," reads the ad, signed by Derek Peterson, the chair and CEO of California-based Terra Tech Corp.
"As a result, many U.S. companies are being forced to move to the Canadian public markets to access capital and build their businesses."
The ad also warns that Canadian firms have tapped into U.S. investor interest in order to raise and spend money in order to acquire American cannabis assets.
"Regrettably, this will put what should be one of our homeland's greatest economic drivers in foreign control."
In an interview, Peterson admitted to having mixed feelings about the momentous paradigm shift that's scheduled to begin north of the border when the Trudeau government's promise to legalize recreational pot finally becomes a reality.
"It's a double-edged sword," he said. "I'm afraid of the economic impacts right now if we don't do anything, but at the same time, (Canada) really triggered and ignited the national discussion.
"I literally would categorize that as the single most pivotal point in our own path towards legalization, that they took the initiative to do it."
The challenge for U.S. firms lies in the fact that while recreational cannabis is legal in nine states and medicinal pot in 22 others, it remains illegal under federal law. Sending product across state lines is impossible, as is the ability for companies to obtain financing from major banks.
Federal statutes aimed at curtailing the cocaine trade in the 1980s remain on the books, making it impossible for companies like Terra Tech to deduct routine business expenses and capital equipment like computers and payroll costs against their taxes, Peterson said.
Producers have to rely on smaller financial institutions such as credit unions for financing, while the major players in the world of institutional capital have been flocking to back Canadian rivals, he added.
The result is what Peterson called a "federal illegality tax" that extends across the spectrum of a U.S. producer's operations and swallows profit margins whole.
"The reality is, like it or hate it, you guys are getting a first-mover advantage," he said of the Canadian industry.
"We're sitting here with no access to banking, getting our credit cards shut off, having all these crazy headwinds due to the dichotomy between state and federal law, and you guys took the first-mover advantage from the federal perspective and you're reaping the rewards of it."
The solution, Peterson writes, is for the U.S. government to allow states to enact their own cannabis regulations "so that we can fairly compete and protect our domestic industry before it's too late."
The federal philosophy on recreational pot in the U.S. has been fraught with confusion since Trump was elected in 2016.
Despite campaigning on a promise to leave the issue up to individual states, the White House appeared to reverse course earlier this year by rescinding the so-called Cole memorandum, an Obama-era edict that prevented federal interference with those states where recreational cannabis is legal. Trump has since insisted, however, that the federal law would not be enforced in those jurisdictions.
Rep. Dana Rohrabacher, a Republican congressman from California, has since said he has been assured that Trump plans to proceed with reforming federal marijuana laws as they pertain to medicinal pot once next month's midterm elections are over.
As of Wednesday, Canada will be — a move Prime Minister Justin Trudeau has justified as an effort to better protect young people from the drug's effects and eliminate the influence of organized crime.
U.S. Customs and Border Patrol officials were set to hold a briefing later Tuesday on how they plan to enforce federal pot laws at Canada-U.S. border crossings.
The Coming Pot War
For your interest.
The President does favor trade.
I can’t wait for the day everyone around me is higher than a kite.
SMH
What the Bankers want, the Bankers get.
Thanks for the ping!
I support the legalization of cannabis for adults to use recreationally & medicinally if they so chose.
I’m not concerned with Canada’s cannabis business at this time. Perhaps after the federal prohibition is lifted & states can decide for themselves whether cannabis should be legal or night I will feel differently.
Or we can produce vehicles, aircraft, steel, etc. And Canada can produce wildwood flower. I wonder how long the weed boom will last once the DIY crowd discovers just how easy it is to grow anyway.
I am for medical marijuana in the cases of epilepsy, alzheimers, PTSD, autistic children and for cancer patients. Texas has only allowed it for children with epilepsy with mega restrictions. Hopefully this session they will allow more conditions. I never expect our legislature to go for recreational pot, but I know kids with autism need medical marijuana.
With several US states making personal growing in one’s own backyard legal, I question whether there IS a “Cannabis Industry/Market”.
Just no longer relevant.
“I wonder how long the weed boom will last once the DIY crowd discovers just how easy it is to grow anyway.”
The CA “Industry” dies with this fall’s harvest.
I would wager that at least a million people grew at least 1 pound each. You can hardly drive through any neighborhood without smelling it.
It’s funny all these unforeseen unintended consequences
California just went major clamp down on outlaw industrial growers especially in LA county
$$$ going back up
I’m guessing 100-150 tons per month now off the market
Lows for boxes were down to around 600-800
Now back up to 1300-1500
A box is 100 pound lot
It’s fascinating to keep up with this ..
To me anyhow
Thst lowest price means modern high grade California warehouse grow lights bud was cheaper than Colombian bale weed from the late 70s
600 in 2018 versus 250-400/ pound in 1977
Crazy
You can grow tobacco in your back yard too, but I don’t see lots of people doing that. Most will choose convenience over cost. What I do see as the big trend are value added products, concentrates, vape and edibles.
Look to England and the epidemic and failure of Cannabis. For the most part, the Cannabis push is a big scam. I just want government out of it altogether.
“Look to England and the epidemic and failure of Cannabis.”
I can’t see it being any worse than alcohol personally. I do think the product is wayyyyyyyy overhyped though. It certainly helps some people medically, but some of the promises the extreme marijuana supporters make are ridiculous (i.e. astronomical economic growth, “tax the hell out of it” government income, cancer cures, dogs and cats living together).
I’m curious to see how the beer producers respond to legalized marijuana ... they’d probably be the ones to suffer from another recreational drug on the market.
The drug alcohol has been legal for generations - but not everyone around me is drunker than a skunk.
The drug alcohol has been legal for generations - but not everyone around me is drunker than a skunk.
If someone is drunk there is a breathalyzer. There is no test for pot. And yes, alcohol is legal but now there will be the additional stoned idiots.
Maybe Trump will tell them that pot companies are the one exception he will make as far as being good with them moving out of country...
“You can grow tobacco in your back yard too, but I don’t see lots of people doing that. Most will choose convenience over cost. “
If a pack of smokes cost $150, everyone would grown their own tobacco. Or buy it on the black market for $100.
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