Tuesday, October 16, 2018

Marijuana is not fully legal anywhere in the U.S.

This somewhat tongue-in-cheek letter to Canada totally misses the mark. California's experience with legalized marijuana does not tell us much about how Canada's legalization will go. That's because marijuana is not fully legal in California. The plant is still criminalized under federal law in the U.S. This causes all sorts of problems for legal (at least under State law) growers in CA. For example, they can't get access to the banking system because banks do not want to take the risk of financing what is still a criminal enterprise under federal law. Those kinds of problems probably accounts for much of the reason why black market marijuana is so much cheaper than retail marijuana in California. It is not just the bureaucracy costs of legalization as the article implies. Because legal growers are not fully legal, they operate in a gray area of the economy where they can't fully access the institutions that other businesses use on a regular basis.

When pot becomes legal in Canada, it will be fully legal in Canada. Because the change is coming from the federal government, there will be no reason for banks to treat marijuana growers differently from growers of any other crop. Outside investors will be able to fund pot farms without fear of federal prosecutors.

There is no reason for Canada to look to California to find out how their legalization effort will go. It is more likely that the U.S. will some day look to Canada to see how legalization on the federal level plays out.