More than 100 recreational marijuana stores will open across Canada this week, bringing opportunities for international business and tourism — and creating potential conflict with U.S. authorities as money and people flow across the border.
Experts see major questions of U.S. policy toward Canada when stores open Wednesday, involving criminal law, access to banking, and border crossings. Officials long anticipated fulfillment of Prime Minister Justin Trudeau’s 2015 campaign pledge, but the precise U.S. response remains unclear.
“We need reform in federal law worse than we’ve ever needed it,” said Washington state defense attorney Douglas Hiatt, a marijuana reform advocate. “There is no reform movement anymore. [President] Trump has sucked all the oxygen out of the room.”
Federal law in the U.S. makes marijuana illegal for nearly any reason outside limited research. Although nine states allow its recreational use, retail product can’t cross state borders, and banks routinely drop pot-linked accounts, fearing enforcement of anti-money laundering laws.
“You have wholesale violation of money laundering laws and finance laws and potential wire fraud. You’ve got the entire panoply of federal charges available. There has not been one iota of change in federal law,” Hiatt said. “Anyone who’s involved in any way [in Canada’s retail market] can be prosecuted under federal law. There’s no doubt about that. None.”
At the border, U.S. Customs and Border Protection agents have broad leeway to turn away visitors.
Old drug convictions or confessions of drug use are enough for foreigners to be excluded. In the run-up to store openings, CBP released a vague statement warning Canadians that “working in or facilitating the proliferation of the legal marijuana industry in U.S. states where it is deemed legal or Canada may affect admissibility to the U.S."
CBP revised its statement Tuesday -- after receiving a letter from Rep. Lou Correa, D-Calif. -- now saying that Canadian cannabis workers can enter the U.S. "for reasons unrelated to the marijuana industry" but that "if a traveler is found to be coming to the U.S. for reason related to the marijuana industry, they may be deemed inadmissible.”
Hiatt felt no comfort in the clarification, pointing to a Supreme Court case argued last week involving Mony Preap, a Cambodian green card holder who was convicted of pot possession, released from prison in 2006, and — years later — detained by immigration officials in 2013.
“They are looking up people who have been in the country 30 years with misdemeanors so they can deport them. Does that sound like a bunch of guys that’s going to treat the marijuana issue in a sensible way? I don’t think so,” he said. “I think that’s garbage; I think people are going to get excluded. It’s totally up to the discretion of agents. Those border agents have damn near plenary power, and it’s abused quite frequently."
Michael Collins, interim national affairs director of the pro-legalization Drug Policy Alliance, shared similar concerns.
“I think CBP shouldn’t have made any announcement, and now we’re going to see how this pans out… it was somewhat unnecessary and bizarre policy in the first place,” he said. “Why did they go through the trouble of releasing a statement and then walking it back? That gives me reason to think there’s something to this.”
Collins said that he could imagine controversy if someone is excluded from entering the U.S. after telling border agents they are visiting to attend a marijuana conference or to give a marijuana-related speech.
“CBP is going to back themselves into a corner and make a fool of themselves,” Collins said.
Catia Kossovsky, an attorney at the Hoban Law Group, a law firm that does significant work with cannabis businesses, said that “there are a lot of questions that aren’t answered.”
“If you also look at the release, it says it’s really up to the CBP officer,” she said.
Morgan Fox, media relations director for the National Cannabis Industry Association, said strict border policies could hurt U.S. businesses. But, he added, legalization in Canada may help spur reform in the U.S., where polls find more than 60 percent support for recreational legalization.
“Our hope is it's going to make federal lawmakers take this issue more seriously and act more quickly,” Fox said.
The influence may be particularly strong in border states, Fox said. Michigan and North Dakota voters decide in November on allowing recreational markets, and there’s early movement in New York state, where Democratic leaders increasingly endorse the idea.
Canada will be the second Western country to regulate recreational sales, after tiny Uruguay in South America, which sells pot only to its own citizens at pharmacies.
Without change in federal law, potential penalties remain harsh for participating in the international pot trade.
At least two men — John Knock and Michael Pelletier — are serving life sentences in federal prison for importing Canadian marijuana. Pelletier, paralyzed in childhood, was convicted of smuggling marijuana into Maine, where voters authorized a retail market in 2016.
Although Colorado and Washington state were the world’s first Western jurisdictions to regulate recreational pot sales in 2012, the multibillion-dollar U.S. cannabis market grew with investors risking confiscation of assets and long federal prison terms. Some companies turned to Canada, which already has a medical marijuana program, for investment.
Trump has addressed marijuana policy only once as president, telling reporters in June that he supports efforts by Sen. Cory Gardner, R-Colo., to formally federalize pot law. As a candidate in 2016, he endorsed medical pot and giving states a free hand on recreational use.
Within Trump’s administration and among Republicans in Congress, there are influential opponents of marijuana reform. In January, Attorney General Jeff Sessions withdrew the Cole Memo, a foundational document giving states a green light to unfurl recreational markets, and requested that Congress drop spending measures that protect state medical pot programs.
In Congress, Rep. Pete Sessions, R-Texas, has blocked marijuana reform amendments as chairman of the House Rules Committee. A marijuana super PAC dubbed him a legislative "sphincter” and vowed to defeat him in November.
The White House Office of National Drug Control Policy, meanwhile, reportedly runs a secret administration-wide Marijuana Policy Coordination Committee that has sought to gather negative marijuana trend information.
As with business funds, opposition to marijuana legalization has had cross-border partnership, under the banner of the group Smart Approaches to Marijuana.
“I will be there next week on the first day of legalization,” said SAM founder Kevin Sabet. “There are already moves by local community groups to resist this because of worry about secondhand smoke and other related issues.”
Sabet said the CBP’s clarification should give no comfort to Canadians investing in U.S. businesses.
“I do think that Canadian investors need to be wary of doing any activities in the U.S. I don’t see how this new ruling helps them at all,” he said.
If controversial applications of U.S. law do arise, it’s unclear that they will be resolved immediately, though Collins, the Drug Policy Alliance leader, anticipates an effort in Congress to restrain the CBP’s inquires into marijuana.
Hiatt, whose clients have included medical marijuana patients convicted under federal law, said without reform from Congress, there remains serious risk to all involved.
“Policy is not something that cuts it in federal court. Trust me, I’ve been there,” the attorney said. “Some idiot gets control of the Justice Department — a bigger idiot than Jeff Sessions — and you can have problems. And yes, there are bigger idiots than Sessions. Much bigger.”