Terra Tech CEO’s challenge to President Trump on eve of Canadian legalization: Don’t let US cannabis industry fall behind
As cannabis advocates the world over celebrate Canada’s progressive march towards marijuana legalization, industry insiders in the U.S. continue to lament the missed opportunity befallen them by the country’s strict prohibition policy. Major investments in the cannabis industry remain dominant north of the border — like this summer’s agreement between Constellation Brands and Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) which saw the former pump $4 billion into the Canadian Licensed Producer — with shareholders apprehensive of the risk involved in the U.S. marijuana market.
On the eve of what aims to be a historic moment for the Canadian cannabis community, with marijuana set to step out of the shadows of the black market countrywide on Wednesday, one U.S. company is taking bold steps to force the issue politically.
Terra Tech Corp. (OTCMKTS:TRTC) CEO and Chairman Derek Peterson believes America is losing its competitive edge to Canada in the rapidly growing cannabis industry, and he and his company are taking a proactive stance on the matter. On Tuesday, the company took a full page ad out in the Wall Street Journal calling on President Donald Trump to act now. Firing a cannon across the bow of partisan politics, the ad, written as a direct letter to the President extols the virtues of a modern-day economic arms race being lost on the battleground of 19th-century morals.
“DEAR MR. PRESIDENT,” reads the ad in big, bold letters, “we need your help!”
US cannabis operators suffer headwinds
Considered by some insiders to be among the CBD stocks primed to breakout this year, Terra Tech, with a market cap above $150 million and a stock price hovering around $2.00 per share has spent a significant portion of 2018 expanding its footprint in various states. In late September, the city of Santa Ana granted the company Phase I cultivation, manufacturing and distribution permits for three locations in California. Just last week they purchased property in Las Vegas with the intention of opening a Blüm retail dispensary, one of Terra Tech’s multiple subsidiary businesses.
Peterson concedes, however, that the U.S. cannabis industry is stifled by an out-of-date legal framework that places an arbitrary ceiling on what should be an open and competitive free market.
“Cannabis business operators in the United States suffer so many headwinds, from unfair tax burdens to lack of economies of scale to burdensome regulation, and most importantly lack of both traditional and investment banking to grow our businesses,” Terra Tech’s long-running CEO told PotNetwork in an exclusive statement.
More importantly, federal prohibition has out the U.S. into an uncomfortable position when it comes to cannabis — second place. “During this time, Canada has capitalized itself significantly and has positioned itself to come in and buy up all the significant domestic brands and assets," Peterson continued.
Not only are investments being lost to Canada, such as the aforementioned Constellation Brands deal, but federal law in the U.S. is forcing companies to seek capital up north as well. While major Canadian players such as Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON) and Canopy Growth go big on Wall Street, American cannabis companies are kept off of major U.S. exchanges due to the federal ban on marijuana.
Looking to strike while the proverbial iron is hot, U.S cannabis companies such as MedMen Inc. (OTCMKTS:MMNFF), Acreage Holdings, and Green Growth Brands have sought capital through reverse takeovers and listings on the Canadian Securities Exchange. The CSE is now home to numerous American cannabis companies, taking both capital and innovation away from the U.S.
An important economic discussion around cannabis in the US
Peterson desires to see all of that change, and sooner rather than later. The full-page ad in Tuesday’s Wall Street Journal is his opening salvo in a full-fledged manuever that he hopes will not only open up a discussion on the economics of cannabis in the U.S. but create actual, sustainable change.
"It was important that we opened up an economic discussion around cannabis in the U.S.,” Peterson said of his plans. “We've been spending so much time discussing the political and social issues surrounding legislation, and nobody's been paying attention to the fact that we are potentially missing, what we believe is, one of the greatest economic drivers our generation will see.”
Following the ad, Peterson plans to buy time on the morning talk show Fox and Friends, known to be a favorite of President Trump. And while he may gain an audience with the Commander in Chief, whether or not he gains his favor is anyone’s guess. Although President Trump has expressed support for cannabis reform publicly, both on the campaign trail and while in office, a recent report in BuzzFeed uncovered the existence of an “anti-marijuana committee” in the White House whose purpose is to push a negative message about the drug purportedly.
“To prevent this critical growth opportunity from becoming heavily dominated by foreign ownership the federal government MUST allow states to enact their own cannabis regulation so that we can fairly compete and protect our domestic industry before it’s too late,” concluded the letter in Tuesday’s Wall Street Journal.
“Please help us Mr. President,” added Peterson before signing his name.