June 29, 2018

Lessons America Can be Learned From Canada's Lead

Forbes

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

cannabis companies.

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

industry.”

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as a whole rather than sticking to outdated ideas in a treaty.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.