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

(File photo from The Canadian Press)
Red Deer down to 66 active COVID-19 cases

Red Deer has lowest number of active cases since last November

Orange shirts, shoes, flowers and messages are displayed on the steps outside the legislature in Victoria, B.C., on Tuesday, June 8, 2021 following a ceremony hosted by the Songhees and Esquimalt First Nations in honour of the 215 residential school children whose remains have been discovered buried near the facility in Kamloops, B.C. THE CANADIAN PRESS/Chad Hipolito
Alberta city cancels Canada Day fireworks at site of former residential school

City of St. Albert says that the are where the display was planned, is the site of the former Youville Residential School

FILE – Perry Bellegarde, National Chief of the Assembly of First Nations, takes part in an event on Parliament Hill in Ottawa on Tuesday, July 7, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous Peoples Day must be a ‘call to action’, says Assembly of First Nations chief

Discovery of children at Kamloops residential school site must lead to change, Perry Bellegarde says

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Alberta reports 100 new cases of COVID-19

The Central zone sits at 218 active cases

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Red Deer drops to 71 active cases of COVID-19

Province adds 127 new cases of the virus

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

A pair of Alberta residents were arrested after police responded to a report of a woman who had allegedly been assaulted and confined against her will on June 20, 2021. (File photo)
Salmon Arm RCMP arrest 2 Albertans suspected in alleged assault, unlawful confinement

Firearms, stolen items seized including NHL hockey cards believed to be worth thousands

A man makes his way past signage to a mass COVID-19 vaccination centre at the University of Toronto’s Mississauga campus during the COVID-19 pandemic in Mississauga, Ont., on Monday, May 17, 2021. THE CANADIAN PRESS/Nathan Denette
Canadians encouraged to see mRNA shots as interchangeable as more 2nd doses open up

Doctos urge people not to hesitate if offered Moderna after getting Pfizer for their first shot

Chief of Defence Staff Jonathan Vance sits in the front row during a news conference in Ottawa on June 26, 2020. THE CANADIAN PRESS/Adrian Wyld
Defence committee rises without report on Vance allegations

Committee had been investigating the government’s handling of complaints against former defence chief

Tl’etinqox-lead ceremony at the site of the former St. Joseph’s Mission in Williams Lake, B.C., June 18, 2021. (Angie Mindus photo - Williams Lake Tribune)
‘We are all one people’: Honouring residential school victims and survivors

Love, support and curiousity: Canadians urged to learn about residential schools and their impact

Indigenous rights and climate activists gathered outside Liberty Mutual’s office in Vancouver to pressure the insurance giant to stop covering Trans Mountain. (Photo by Andrew Larigakis)
Activists work to ensure Trans Mountain won’t get insurance

Global campaign urging insurance providers to stay away from Canadian pipeline project

Investigators use a bucket to help recover human remains at a home burned in the Camp fire, Thursday, Nov. 15, 2018, in Magalia, Calif. Many of the missing in the deadly Northern California wildfire are elderly residents in Magalia, a forested town of about 11,000 north of the destroyed town of Paradise. (AP Photo/John Locher)
‘Forever War’ with fire has California battling forests instead

Five of the state’s largest-ever blazes seared California last year, as authorities tackle prevention

Tokyo 2020 President Seiko Hashimoto and IOC President Thomas Bach, on a screen, speak during a five=party online meeting at Harumi Island Triton Square Tower Y in Tokyo Monday, June 21, 2021. The Tokyo Olympics will allow some local fans to attend when the games open in just over a month, Tokyo organizing committee officials and the IOC said on Monday. (Rodrigo Reyes Marin/Pool Photo via AP)
Tokyo Olympics to allow Japanese fans only, with strict limits

Organizers set a limit of 50% capacity — up to a maximum of 10,000 fans

Intricate cloth masks with Indigenous design made by Teresa Snow. Facebook/ Masks4Maskwacis
‘Masks 4 Maskwacis’ wins Northern Lights Volunteer Award

The group received recognition for their efforts to support their community during COVID-19.

Most Read