JUN 28, 2018 @ 07:25 PM 3,219
Nick Kovacevich, CONTRIBUTOR
I write about business and the legal cannabis industry.
Opinions expressed by Forbes Contributors are their own.
When the Canadian Senate recently passed the Cannabis Act, legalizing recreational
marijuana, it created a blueprint for other countries looking to do the same —
especially the United States. With medical marijuana now legal in 30 states
(including Oklahoma where voters approved a ballot measure to legalize medical
marijuana last week) legalization at the federal level seems like a more realistic
prospect every day.
VANCOUVER, BC -
There are undeniable benefits to federal legalization. Today the federal government
still considers cannabis to be a schedule 1 drug —the same classification as heroin.
That means that anyone taking part in an industry that is legal in 60% of the country
risks violating federal law.
That’s not only a problem for people who are buying and using cannabis but for the
industry that is rapidly growing around both medical and recreational marijuana.
Since national banks are reluctant to work with the industry because of the drug’s
federal legal standing, most cannabis-related transactions still take place using cash.
That limits growth as companies struggle to get loans or lines of credit, it puts
dispensaries at high risk of robberies and it makes it almost impossible to audit any
But we saw the benefits of Canada’s new law almost immediately as the Bank of
Montreal quickly extended a credit line worth $200 million to Aurora Cannabis, one
of Canada’s largest cannabis companies. Aurora’s CFO, Glen Ibbott, called the shift
to traditional debt financing “significant” and a “major milestone in the cannabis
So what can America learn from Canada? Here are three steps we should emulate
and one we should avoid.
Go Bold: In legalizing cannabis, Canada is actually violating several international
drug policy treaties. Signed by most countries (including the U.S.) the treaties
explicitly prohibit legalizing illicit drugs for recreational purposes.
But that’s exactly what Canada just did. In taking this brave step, Canada’s citizens
acknowledged that previous laws around cannabis and the war on drugs weren’t
working. They decided that legalizing was going to be more beneficial to the country
as a whole rather than sticking to outdated ideas in a treaty.
Proceed Methodically: Canadian legislators had been working on a plan to
legalize cannabis since Justin Trudeau was elected prime minister in 2015. The
reason a vote has taken so long is because the government was waiting on
recommendations from a federal task force. By taking their time and doing their
research, the legislature was able to craft a bill that anticipates almost every issue.