U.S. pot firms urge Trump to dominate North American marijuana industry

U.S. pot firms urge Trump to dominate North American marijuana industry

Cannabis producers claim the U.S. is “rapidly losing” its competitive advantage to Canada

An American cannabis producer is warning President Donald Trump that Canada is poised to dominate the North American marijuana industry unless the United States takes steps to eliminate barriers to financing and market capital south of the border.

A full-page ad in Tuesday’s Wall Street Journal, framed as a plea to the White House and its most prominent occupant, warns the U.S. is “rapidly losing” its competitive advantage to Canada, where recreational pot becomes legal at midnight.

“The cannabis industry is legal in 31 states, yet most domestic companies do not have access to traditional banking or institutional financing,” reads the ad, signed by Derek Peterson, the chairman and CEO of California-based Terra Tech Corp.

“As a result, many U.S. companies are being forced to move to the Canadian public markets to access capital and build their businesses.”

RELATED: Postal services ready for looming wave of legal cannabis deliveries

The ad also warns that Canadian firms have tapped into U.S. investor interest in order to raise and spend money in order to acquire American cannabis assets.

“Regrettably, this will put what should be one of our homeland’s greatest economic drivers in foreign control.”

In an interview, Peterson admitted to having mixed feelings about the momentous paradigm shift that’s scheduled to begin north of the border when the Trudeau government’s promise to legalize recreational pot finally becomes a reality.

“It’s a double-edged sword,” he said. “I’m afraid of the economic impacts right now if we don’t do anything, but at the same time, (Canada) really triggered and ignited the national discussion.

“I literally would categorize that as the single most pivotal point in our own path towards legalization, that they took the initiative to do it.”

The challenge for U.S. firms lies in the fact that while recreational cannabis is legal in nine states and medicinal pot in 22 others, it remains illegal under federal law. Sending product across state lines is impossible, as is the ability for companies to obtain financing from major banks.

Federal statutes aimed at curtailing the cocaine trade in the 1980s remain on the books, making it impossible for companies like Terra Tech to deduct routine business expenses and capital equipment like computers and payroll costs against their taxes, Peterson said.

RELATED: NHL players say Canada’s legalization of marijuana won’t impact them

Producers have to rely on smaller financial institutions like credit unions for financing, while the major players in the world of institutional capital have been flocking to back Canadian rivals, he added.

The result is what Peterson called a “federal illegality tax” that extends across the spectrum of a U.S. producer’s operations and swallows profit margins whole.

“The reality is, like it or hate it, you guys are getting a first-mover advantage,” he said of the Canadian industry.

“We’re sitting here with no access to banking, getting our credit cards shut off, having all these crazy headwinds due to the dichotomy between state and federal law, and you guys took the first-mover advantage from the federal perspective and you’re reaping the rewards of it.”

The solution, Peterson writes, is for the U.S. government to allow states to enact their own cannabis regulations “so that we can fairly compete and protect our domestic industry before it’s too late.”

The federal philosophy on recreational pot in the U.S. has been fraught with confusion since Trump was elected in 2016.

Despite campaigning on a promise to leave the issue up to individual states, the White House appeared to reverse course earlier this year by rescinding the so-called Cole memorandum, an Obama-era edict that prevented federal interference with those states where recreational cannabis is legal. Trump has since insisted, however, that the federal law would not be enforced in those jurisdictions.

Rep. Dana Rohrabacher, a Republican congressman from California, has since said he has been assured that Trump plans to proceed with reforming federal marijuana laws as they pertain to medicinal pot once next month’s midterm elections are over.

As of Wednesday, Canada will be the first G7 member to greenlight legal recreational pot — a move Prime Minister Justin Trudeau has justified as an effort to better protect young people from the drug’s effects and eliminate the influence of organized crime.

U.S. Customs and Border Patrol officials were set to hold a briefing later Tuesday on how they plan to enforce federal pot laws at Canada-U.S. border crossings.

James McCarten, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Flora Northwest was taken to the Ermineskin residential school when she was six years old. (Emily Jaycox/Ponoka News)
Ermineskin residential school survivor: ‘It just brings me back to the cries at night’

Discovery in Kamloops of remains of 215 children a painful time for survivors

Police officers and their dogs undergo training at the RCMP Police Dog Services training centre in Innisfail, Alta., on Wednesday, July 15, 2015. Mounties say they are searching for an armed and dangerous man near a provincial park in northern Alberta who is believed to have shot and killed a service dog during a police chase. THE CANADIAN PRESS/Jeff McIntosh
RCMP search for armed man in northern Alberta after police dog shot and killed

Cpl. Deanna Fontaine says a police service dog named Jago was shot during the pursuit

Alberta now has 2,336 active cases of COVID-19, with 237 people in hospital, including 58 in intensive care. (Black Press file photo)
Red Deer down to 73 active cases of COVID-19, lowest since early November

The Central zone has 253 active cases of the virus

File photo
Update: Leduc RCMP request assistance to identify armed robbery suspect

Leduc RCMP are searching for suspect involved in an armed robbery at the Leduc Giant Tiger.

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

A lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018.THE CANADIAN PRESS
No winning ticket sold for Friday’s $70 million Lotto Max jackpot

The huge jackpot has remained unclaimed for several weeks now

Canadian Prime Minister Justin Trudeau is seen during a joint news conference following the EU-Canada Summit, in Brussels, Belgium, Tuesday June 15, 2021. Trudeau says Canada is on track now to have 68 million doses delivered by the end of July, which is more than enough to fully vaccinate all 33.2 million Canadians over the age of 12. THE CANADIAN PRESS/Adrian Wyld
Vaccine deliveries enough to fully vaccinate all eligible Canadians by end of July

Three in four eligible Canadians now have their first dose, nearly one in five fully vaccinated.

Chief Public Health Officer Theresa Tam listens to a question during a news conference, in Ottawa, Tuesday, Jan. 12, 2021. The number of confirmed COVID-19 cases attributed to the highly contagious Delta variant grew in Canada this week. THE CANADIAN PRESS/Adrian Wyld
Canada’s public health agency reports spike in confirmed cases of Delta variant

More than 2,000 cases of the variant confirmed across all 10 provinces and in one territory

The federal government says it wants to ban most flavoured vaping products in a bid to reduce their appeal to youth. THE CANADIAN PRESS/AP-Craig Mitchelldyer
Health Canada proposes ban on most vaping flavours it says appeal to youth

If implemented, the regulations would restrict all e-cigarette flavours except tobacco, mint and menthol

The Montreal Police logo is seen in Montreal on Wednesday, July 8, 2020. Some Quebec politicians are calling for an investigation after a video was released that appears to show a Montreal police officer with his leg on a young Black man’s neck during an arrest. THE CANADIAN PRESS/Paul Chiasson
Probe called for after video appearing to show Montreal officer’s knee on Black youth’s neck

Politicians call for investigation after clip evokes memories of George Floyd incident

Thousands of protesters make their way through the downtown core during a Black Lives Matter protest in Ottawa, Friday June 5, 2020. THE CANADIAN PRESS/Adrian Wyld
MPs’ study of systemic racism in policing concludes RCMP needs new model

Chair of the House public safety committee says it’s time for a reckoning on ‘quasi-military’ structure

A case filled with packages of boneless chicken breasts is shown in a grocery store Sunday, May 10, 2020, in southeast Denver. THE CANADIAN PRESS/AP-David Zalubowski
One million chickens euthanized during labour dispute at Quebec slaughterhouse

Premier says waste amounts to 13 per cent of the province’s chicken production thrown in the garbage

Most Read