Canadians who use marijuana, work in the industry or even invest in it face a potential lifetime ban from the U.S. when trying to cross the border.
That's according to a Thursday Politico article quoting “a senior official overseeing U.S border operations,” Todd Owen, who explained how and why Canadians who use marijuana, work in the industry or even invest in it, face a potential lifetime ban to the U.S. when trying to cross the border.
It doesn’t matter that recreational cannabis is on the precicipe of federal legality in Canada; it doesn’t matter that the businesses operate under the law; it doesn’t even matter that some of the companies in question, like Canopy Growth Corp CGC, Cronos Group Inc. CRON or Tilray Inc TLRY trade on major U.S. stock exchanges, the official said. Cannabis remains a Schedule I substance in the U.S.
Stocks On The Move
Thursday afternoon saw a few cannabis stocks plummet on the news.
Canopy Growth, which tumbled late Thursday and early Friday, is already up almost 4 percent since Thursday’s close, and more than 12 percent since the open Friday.
Similarly, Cronos Group rebounded 0.6 percent since Thursday’s close, and 8.5 percent since Friday’s open.
Tilray is also up more than 9 percent since Friday’s open. Its stock price is still 8 percent lower than its Thursday closing price.
American companies like Green Thumb Industries Inc GTBIF and MedMen Enterprises MMNFF saw their shares post substantial gains Friday.
“The big Thursday cannabis stocks sell-off was attributed to the news, but the Politico article was actually published after the market close,” said 420 Investor Alan Brochstein. It should also be noted that “the move follows some recent reports of isolated incidents of border issues,” he said. “Now, it remains to be seen how much of an impact this will have on travel plans of executives, who continue to cross the border generally without issue.”
Tyler Beuerlein, the executive vice president of business development at payment and banking technology solutions provider Hypur, said Canadian money is pouring in to acquire operations in the U.S.
"This [decision] can have a significant impact from an investment and valuation standpoint in the US market … the travel ban could make Canadian investors more reluctant to invest in U.S. businesses.”
The Sector Reacts
Interested in what cannabis industry insiders had to say about the Politico story and its ramifications, Benzinga reached out to Michael Harinen, the chief brand officer at Bluebird Botanicals, a Colorado-based hemp extracts manufacturer and distributor.
“Years from now, we'll look back at this and realize the ridiculous nature of how the U.S. responded to another country’s prerogative,” Harinen said, arguing that, while cannabis remains illegal in the U.S., most of the individuals facing potential bans aren’t “trafficking drugs or breaking any laws by coming here. He qualified the decision as “regressive Reefer Madness” policy.
“Wasn't it enough for the U.S. to kidnap Marc Emery out of the country for his cannabis seed business and lock him in a prison cell for years?” he said. “We wish for a future where cannabis is treated like a plant and the individual rights of people to operate a business and ingest what they desire is sacrosanct.”
Evan Eneman, the CEO of ELLO, called the border policy "insane" in his comments to Benzinga.
“This insanity is exacerbated by the fact that we have the majority of this country in some legal market along with overwhelming citizen support and bipartisan political support," he said. “It just seems like another move by the Trump administration aimed at scaring people and instilling fear in the public for political means."
Author’s note: Many other experts Benzinga contacted for comment refused to speak on the record.
Photo: A legal cannabis ad at Yonge–Dundas Square in Toronto, Canada by Javier Hasse.
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