Roughly one week before Canada’s legalization of marijuana goes into effect, the U.S. government has issued a clarification to an earlier policy announcement that many feared would prevent people who work or invest in the marijuana industry from entering the country.
“A Canadian citizen working in or facilitating the proliferation of the legal marijuana industry in Canada, coming to the U.S. for reasons unrelated to the marijuana industry will generally be admissible to the U.S.,” reads the clarification release on Tuesday by U.S. Customs and Border Protection (CBP).
Previous statements by Trump administration officials led to concerns—and resulting pushback from members of Congress—that any Canadian who is affiliated with the cannabis industry would be barred from visiting the U.S.
The new CBP clarification will likely be met with a sigh of relief from Canadians who work for or invest in marijuana businesses.
However, the updated statement does have a big caveat.
[I]f a traveler is found to be coming to the U.S. for reason related to the marijuana industry, they may be deemed inadmissible,” it says.
So as long as a Canadian isn’t crossing the border for the purposes of seeking investments for their cannabis business or for other reasons related to marijuana, they should be able to enjoy a visit to the U.S.
Canada’s legal marijuana sales go into effect next Wednesday.
Marijuana Stores Will Be Hard To Find For Most Canadians On Day One Of Legalization
See the original article published on Marijuana Moment below:
U.S. Government Loosens Border Policy For Canadian Marijuana Industry Workers
The U.S. Small Business Administration issued guidance earlier this month clarifying that marijuana businesses — and even some firms that don’t touch the plant but serve those in the cannabis industry — cannot receive aid in the form of federally backed loans.
“Because federal law prohibits the distribution and sale of marijuana, financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity,” the new memo says. “Therefore, businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.”
The new document details the type of marijuana-related businesses that it says are “ineligible” to participate in the agency’s loan programs:
(a) “Direct Marijuana Business” — a business that grows, produces, processes, distributes, or sells marijuana or marijuana products, edibles, or derivatives, regardless of the amount of such activity. This applies to personal use and medical use even if the business is legal under local or state law where the applicant business is or will be located.
(b) “Indirect Marijuana Business” — a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana. Examples include businesses that provide testing services, or sell grow lights or hydroponic equipment, to one or more Direct Marijuana Businesses. In addition, businesses that sell smoking devices, pipes, bongs, inhalants, or other products that may be used in connection with marijuana are ineligible if the products are primarily intended or designed for such use or if the business markets the products for such use.
(c) Hemp-Related Business” — a business that grows, produces, processes, distributes or sells products purportedly made from “hemp” is ineligible unless the business can demonstrate that its business activities and products are legal under federal and state law. Examples of legal hemp products include paper, clothing and rope.
The new memo, issued by SBA Administrator Linda E. McMahon, is intended to provide clarification on a longer document laying out rules for loan programs that SBA issued earlier this year.
The policy document also specifies that SBA borrowers can’t rent office space to marijuana-related businesses.
“For consistency with the changes identified above regarding marijuana-related businesses, Lenders are advised that, during the life of the SBA-guaranteed loan, a borrower may not lease space to the ineligible businesses described above because the collateral could be subject to seizure and because payments on the SBA loan would be derived from illegal activity,” McMahon wrote. “If a borrower does lease to an ineligible marijuana-related business, SBA District Counsel should be consulted to determine what action should be taken.”
Cannabis social network Massroots announced today that Nasdaq denied the company’s request to trade shares on the exchange.
Unhappy with the decision, Massroots issued an outspoken press release condemning Nasdaq’s actions as setting “a dangerous precedent that could prevent nearly every company in the regulated cannabis industry from listing on a national exchange. The company was given the chance to keep this rejection private, but CEO Isaac Dietrich decided to go public in an effort to facilitate change.
Massroots plans on appealing the decision to the SEC (Securities and Exchange Commission) “if necessary.” Since it’s unclear why Nasdaq rejected Massroots’ application, it’s unfair to say whether or not this ruling will set a precedent for the rest of this nascent industry.
Paul Warshaw, CEO of GreenRush, a California technology company that does business with over fifty medical marijuana dispensaries, says adequate insurance policies for cannabis-based businesses have been “few and far between.”
The landscape is shifting, however, as carriers are taking a fresh look at what is becoming a robust and profitable industry. Insurance underwriters are developing liability coverage that can address the needs of the industry as it expands. Gerry Finley of Munich Reinsurance America states that the policies are likely to come at a premium price.
Adam Weiss and Spencer Uniss, owners of Bolder Cannabis and Extracts in Colorado, say the high prices are due to minimal competition among insurance companies for cannabis-related business coverage. The partners carry a full range of coverage for their multi-tiered business, from workers compensation and health insurance to product liability.
There is currently scant data for liability exposure in the industry. Theft is listed as a primary risk, as businesses have often operated as cash-only enterprises. Pollution complaints are another, particularly for growers who have their facilities in a densely populated area. Reliable numbers are hard to come by at this point, and pricing has yet to be standardized. Uniss believes that pricing will come down “[a]s insurers see companies like ours operating in a responsible, compliant way” and can gather more accurate information regarding risk exposure.
Regional legalization has not convinced all major insurance carriers to participate in coverage, however. Lloyds of London has discontinued policies for cannabis-related businesses until federal law declares marijuana legal.
Warshaw said that decision affected his technology company, which provides medical marijuana dispensaries with scheduling software. Neither he nor the other employees of GreenRush have any actual contact with the cannabis plant. Nevertheless, the company will not be able to renew its business policy with Lloyds.
The health insurance sector seems to operate independently of its business insurance cousin. Bill Moore of Munich American Reassurance Company states that with medical marijuana, carriers pay greater attention to the risks inherent to the underlying illness than to its treatment.
A survey taken at the Association of Home Office Underwriters (AHOU) Annual Conference in Washington, D.C., took the pulse of the underwriting community regarding health insurance and the marijuana industry. Usage frequency was a priority for 43 percent of those polled. Medical history followed at 37 percent, age came in at 14 percent, with current health last, at 6 percent. Those carriers who did not already have policies that addressed marijuana use planned to offer them in the near future.
Weiss and Uniss said that health insurance was one area where they paid about as much as a non-cannabis-based company might pay.
Insurance carriers may be opening up options for companies, but where individual applications are concerned, cannabis consumption has not yet joined the ranks of other products such as tobacco and alcohol. Applicants for health insurance are often still asked if they have tested positive for cannabis use.
Nick Dice, the owner of Medical MJ Supply, knows what can happen when bugs and mildew attack marijuana plants.
The Fort Collins, Colo., shop owner said he has watched as other businesses have fallen apart because of the havoc that pests and disease can cause. That is why previously, in his grow room, cultivators used mildew and pesticide treatments on the plants roughly every three to four days. Now, according to Dice, they focus on cleanliness:
“We have people who that’s their only job is to look for any infections or anything that could cause potential damage to the crop.”
The dedication to keep hazards at bay has yielded Dice a vibrant, healthy crop that is already in its third or fourth week. His grow room is filled with knee-high marijuana plants, which he estimates to be valued at up to $180,000. He attributes his success to using products to keep the plants clean.
Dice is not the only grower who has used chemicals to protect a cannabis crop. In states where either medical or recreational marijuana is legal, many growers are using pesticides. After all, a damaged crop will take a toll on a company’s bottom line. However, the federal government, which regulates which chemicals a farmer can use, has not addressed the situation with marijuana plants.
Experts say that other agribusinesses have standards for the fungicides and pesticides that are safe to use. For example, people who cultivate tobacco have a list of pesticides that have been approved by the government. Marijuana farmers do not have any, as the federal government has stayed away from the topic.
Agriculture officials in Colorado did recently put out a list of what they considered appropriate pesticides for cannabis. Other states, such as Illinois, Nevada and Washington have followed suit.
However, the industry is still largely without direction in the area. Therefore, many growers are simply going on what works or what they deem is appropriate, according to Whitney Cranshaw, an entomologist at Colorado State University. Cranshaw spoke on these issues:
“Sometimes they’ve used some things that are inappropriate, sometimes unsafe.”
The lack of regulations has sparked some safety concerns for both what is happening to the plant and the effects it could have on the consumer. American Cannabis Company plant expert Brett Eaton noted that because the marijuana industry is new, there simply are not policies in place to regulate pesticides. Without these rules, Eaton said that harmful pesticides could be sprayed onto plants, even right before they are harvested.
Denver officials cited safety concerns and put tens of thousands of cannabis plants on hold until an investigation is complete.
As the marijuana industry continues to grow, so will the need for determining which chemicals are safe and appropriate to use and which are not. Experts say that science, policy and growers self-regulating will lead to a solution.
photo credit: npr