We are seven days away from adult use legalization in Canada. 

And all hell is likely to break loose on both sides of the border.  Adult use legalization on a national scale – in a country the size of Canada, which is still bordered on the long side by the US, which has not legalized on a national level at all, is going to create some interesting conundrums for a lot of people.  

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Canada has managed to patch together a hastily constructed legal framework for recreational cannabis use in the country; much of that framework is dependent on provinces and municipalities having their own say in the way the laws are written, interpreted and implemented, and it will be very interesting to see where the system breaks down over the coming months. 

System of a breakdown. 

The system is bound to break down – as much because the folks who have been in the grey market cannabis industry aren’t going to go away, they won’t just give up their cash cows, and they won’t go find a job at the local Shoppers in order to distribute cannabis to folks who want or need it.  

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We’ve seen the Canadian LP system for the past couple of years, and we have seen the provinces and municipalities circumvent the federal construct with impunity – similar to the way that the US states have voted or legislated their own set of rules and regulations outside the DEA or Congress in order to legitimize sales, and therefore taxes, of cannabis and related products. 

Canadians can be a stubborn lot, and we can expect a lot of growing pains as the country works into this new adult use legality on a national scale.  Some will become rich off the scheme, and others will complain that the industry has become too commercialized and lots it way.  Bank on this, and likely before years end. 

Can you cross that bridge?

Canada’s southern neighbor is already throwing a wrench into the whole adult use legalization on a country wide scale situation.  In case you haven’t heard, Customs and Immigration will be asking Canadian citizens whether or not they’ve used or purchased cannabis products – something that is going to be perfectly legal in their home country, mind you – and if they reply in the affirmative, they’ll be refused entry into the US and put on the permanently banned list.  

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If they choose to lie about their cannabis use, that will open them up to prosecution from the Canadian or the US government, and that’s also a lifetime ban when it comes to visiting the US for pretty much any reason.  Banned Canucks can apply for exemptions but in the current climate, the odds aren’t good for getting one. 

We’ve seen reports – quite a number of them – on various news outlets that are describing the same situation being applied to Canadians even if they are simply investors in cannabis enterprises or they work for a company that makes an industrial product used in cultivation or processing.  Crazy, eh? 

Wonder how many people won’t make it to the MJBiz show in Vegas because they can’t get through the border crossing?  Will they have to go somewhere else and come into the country to lessen their chances of being asked about their cannabis use?

Take that to the bank. 

While no one is talking about the banking situation yet, it’s quite likely that there will be some serious issues that the Canadian banks are going to face in the coming weeks.  Uruguay was the first country to go all the way with adult use legalization back in 2017, and cannabis dispensaries in the country are still operating on a cash only basis. 

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One would think that Uruguay has its own banks, and those banks should be free to follow the laws in the country, but a funny thing happened – unless you happen to be in the Uruguayan cannabis industry – that involved the US banks putting the smackdown on the banks in Uruguay.  They did this by telling them that if they dealt with perfectly legal cannabis dispensaries in their own country, they would be cut off from doing business with US banks.  

So of course the banks in Uruguay decided they would rather be real banks than giant safes that had no ability to transfer money outside the country, and the dispensaries and growers and extractors and so on still have no legitimate way to bank in the country.  Crazy, isn’t it?  Canada is a much larger country, and we’ve just had NAFTA 2 agreed upon in principle, but the entire house of cards could come tumbling down – and with Mexico, who is also a party to NAFTA 2 – considering adult use legalization in country, it could really get sticky for everyone.  

Crazy times in crazy town. 

So here we are, seven days from the launch of adult use legalization in the cannabis industry in a first world country.  A country that is big, has plenty of people, does first world stuff, and is generally a calming influence in the world.  The question remains as to how strong the federal government in Canada will be when (and it’s surely to be when at this point) the US government decides to stick its’ nose into their affairs and try to put the smackdown on Trudeau and his cabinet, Parliament, etc

This could get really interesting while we play wait and see.