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Canada turns to the U.S. to solve cannabis shortage

Canadian lawmakers have been batting around the idea of creating another cross border trade deal with the U.S. But this deal wouldn’t be for steel or wheat or cars. It would be for marijuana—that is at some point in the future, if Washington DC lawmakers ever get around to ending 80 years of federal prohibition.

The issue stems from Canada’s supply and demand problem. Demand for legal marijuana has been high since Canada became the first G7 country to legalize cannabis, but the supply has been falling short.

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Meanwhile, an export deal could be a godsend in U.S. states such as Oregon, where they say they’re sitting on about a six-year supply of cannabis flower.

"The biggest issue that we faced in Canada is an unanticipated demand for a legal product, so shortage of supply. Problems with supply chain." —Ontario Senator Tony Dean at a briefing with U.S. Congressional staff on Tuesday (source: Newsy).

Marijuana prices are soaring in Canada and plummeting in Oregon

With all the money being poured in Canadian licensed producers, you would think Canadian dispensaries would have plenty of bud on their shelves. But the reality of the situation is that Canadian LPs are relatively young. And production capacity is still trying to catch up to the sudden rise in demand resulting from the legalization of so-called recreational marijuana.

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As a result of high demand and inventory shortages—we all know the formula—prices are higher than they might otherwise be if supplies were keeping pace. One thing that hasn’t changed, however, is the price for black market marijuana. And, although there is a willingness on the part of some to pay a little bit more for pesticide-free, mold-free cannabis, many of those who can’t afford or can’t get their hands on the legal stuff are turning around and heading back to their local dealer.

Solving both issues

As you can imagine, lawmakers in both Oregon and Ontario are looking for solutions, and one solution being considered is literally impossible in this day and age—importing marijuana from the U.S. As we all know, “reefer” is, to this day, federally illegal in the U.S.

Ten U.S. states have already leapfrogged the feds and made the recreational use of marijuana legal for adults 21 and over. A number of those states border Canada, making them ideal candidates as vendors of imported U.S.-grown cannabis.  

With both U.S. states and Canada hoping to do business, the feds are put in the position of being a kind of anti-middleman.

"I see nothing but opportunity in a cross-border sense from whatever form of legalization and regulation may occur at the federal level in your country." —Ontario Sen. Tony Dean in an interview with Newsy.

It could happen

Recently, a group of Canadian politicians and business executives traveled to Washington, DC to extol the virtues of legal weed.

Although marijuana has been federally illegal for 80-some-odd years, there is a light at the end of the proverbial tunnel, as advocates in Congress continue to pound away at legislation aimed at ending federal prohibition.

Many believe the odds are good that the House will pass a bill stripping marijuana of its Schedule 1 status sometime this year. And President Trump has suggested that he would sign such a bill. Whether the Republican-controlled Senate will get on board with the idea remains to be seen.

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Even if the U.S. does transfer over regulatory duties to the states, it may not approve of interstate commerce, let alone international trucking.

Moreover, federal law is not the only issue that would need to be solved in order to make the importing of cannabis from the U.S. possible. Currently, none of the states that have legalized marijuana have laws on the books which allow the transport of the commodity across the state or international borders.

In Oregon, where LPs are sitting on more than 1 million pounds of perfectly good surplus marijuana, legislators who see the light are working on drafting laws which could allow interstate and international trade.

However, even if they do hammer out a deal, vendors will be waiting at the starting blocks for the federal starting gun.

"I would see tremendous opportunities between two very solid neighbors with huge preexisting common interests both in terms of social equity and social justice, but also in terms of the economy. Think of auto trade between not just two countries but three countries whose borders coalesce."  —Ontario Sen. Tony Dean, Newsy interview.

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