Investors and employees in cannabis companies may be banned from entering U.S., report suggests
Official tells Politico that threat of lifetime ban on entering U.S. may extend to legal workers and investors
Shares in numerous TSX-listed marijuana companies were even more volatile than usual on Friday after an official at U.S. Customs and Border Protection said it's not just users of the drug who risk being refused entry to the United States — even people who work for and invest in the companies may too.
U.S. website Politico first reported on Thursday that even after recreational marijuana use becomes legal in Canada next month, the U.S. will continue to enforce rules concerning travel relating to the drug, which will continue to be a banned substance at the federal level even though numerous states have legalized it.
"If you work for the industry, that is grounds for inadmissibility," Todd Owen of U.S. Customs and Border Protection (CBP) told Politico, adding that investors in cannabis from other countries have already been denied entry.
"Facilitating the proliferation of the legal marijuana industry in U.S. states where it is deemed legal or Canada may affect an individual's admissibility to the U.S.," Owen was quoted as saying.
Those who admit to using marijuana are likely to have the same level of scrutiny as before, but the report late Thursday suggested that the consequences may soon extend to those who work and invest in companies involved in the legal industry in Canada.
"As marijuana remains federally prohibited in the U.S., working or having involvement in the legal marijuana industry in U.S. states where it is deemed legal or Canada may affect an individual's admissibility to the U.S.," CBP told CBC News in a statement.
And lying to a border agent is itself enough to earn a lifetime ban, the agency says.
Annamaria Enenajor, a criminal lawyer and executive director of the Campaign for Cannabis Amnesty, said Friday that serious consequences are indeed something anyone crossing the border needs to know about.
"If you have investments in cannabis companies, even companies that are publicly traded, that could raise flags," she said in an interview Friday.
While she says she doesn't expect border officials will start asking detailed questions on marijuana investments of everyone crossing the border, "if you're stopped at the border and you face questions about your involvement with cannabis, and you answer those questions in the positive, you can face a lifetime ban," she said.
Bill Blair, the minister of border security and organized crime reduction, told CBC News that although, "possession of cannabis is legal in some U.S. states, cannabis remains illegal under U.S. federal law" and Canadians travelling there need to respect U.S. laws.
He also warned that the U.S. has the right to set its own laws and that staff at the border are not amending their procedures to reflect the legalization of cannabis in Canada.
Canadians who wish to enter the United States or any other country have to adhere to its laws.
The CBP statement suggests enforcement agencies will consider Canadians crossing the border on a case-by-case basis.
"CBP officers are thoroughly trained on admissibility factors and the Immigration and Nationality Act which broadly governs the admissibility of travellers into the United States," the agency said. "Determinations about admissibility are made on a case-by-case basis by a CBP officer based on the facts and circumstances known to the officer at the time."
But there's much uncertainty as to how far the concept of "involvement" the marijuana industry extends. Canadian Sam Znaimer was recently turned away and banned for life at a crossing in Washington state because one of his many business ventures is investment in U.S. cannabis companies.
His lawyer, Len Saunders, said Friday that the agency's latest comments came as a surprise to him since he had assumed the government would take a "hands off" approach to the drug once it was legal in Canada.
"Going forward, anybody involved in any cannabis industry, regardless of where it's located, regardless of whether or not it's legal in that state, province our country will be deemed inadmissible to the U.S.," Saunders said, adding that the news will have a "chilling effect" on legal businesses in Canada.
"Whether it's people who are just front-line workers, or investors, or running cannabis companies," he said, "if they find out you're involved, it's going to create a huge impediment on cross-border business and people."
Anyone hit with a ban can apply for a waiver to exempt themselves, which can be a costly and lengthy process. But if they plan to continue to be involved in the cannabis industry, there's no point anyway, Saunders says.
"If you get it approved and you're still involved in that industry, there's a very good chance you'll get it taken away," he said.
It's not immediately clear what level of involvement would constitute ownership in a marijuana company.
The three most active shares on the TSX on Friday were marijuana companies. The most active, Aurora Cannabis, saw more than 14 million shares change hands in the first hour of trading — more shares than were traded in all five big banks, and Rogers, Bell, Telus and Suncor put together.
As members of the main TSX index, marijuana companies such as Canopy Growth, Aphria, Aurora Cannabis and others are included in hundreds of mutual funds and ETFs, which means owners of those funds are technically investors in marijuana, too.
Shares in all those companies seesawed on Friday as gloom set in over the sector. All the big names plunged at open, before recovering later in the morning.
The two biggest pot companies — Canopy Growth and Aurora — saw their shares fall 14 and nine per cent, respectively, on Thursday, the day the Politico report came out.