Matt Maurer was quoted by Leafly.

What will US federal legalization mean for Canada’s cannabis industry?

Matt Maurer was interviewed by Leafly. about what federal legalization of cannabis in the United States would mean for Canada's cannabis industry. 

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Ever since October 18, 2018, Canada has basked in the sunlight of a federally legal recreational cannabis market. This good fortune has bestowed Canadians with a vast and diverse buffet of products, and seemingly endless ways to consume as well.

Equally as important, the end of prohibition has brought forth a bold new industry, creating companies and careers across the nation, and showering the Great White North in revenue to the tune of $43.5 billion thus far.

In contrast, we have our neighbour to the south, the United States. Although cannabis is legal in some form in three-quarters of the country, it remains illegal at the federal level.

This has created a significant hindrance in growth opportunities for the sector over there because cannabis cannot be exported or imported.

But what if the United States was finally able to end its marijuana identity crisis by eradicating cannabis prohibition from the top down? What effect would that have on Canada and its burgeoning pot sector?

“There have been a number of starts and stops with American legalization over the years, so I’m not holding my breath until it happens, or we get much closer to it actually happening.” 

"Right now in Canada, brands are still struggling to rise to the top, and that’s within the Canadian market. Add in a lot more competition down south and the task becomes even tougher."

“As long as cross-border cannabis trade between countries remains effectively closed, I think we will continue to see brands from the United States and Canada infiltrate the cross-border market in the manner in which we currently see,” he said. “That is, American companies finding Canadian licensees to manufacture and sell [their] brands in Canada and vice-versa.”

“LPs have invested so much time and money in their facilities here,” he said, likely due to the onerous licensing requirements. “Allowing American products or even worse, products from countries like Mexico and Latin America where cultivation costs are even lower, [would be detrimental].”

“I think some Canadian LPs and retailers may be able to carve out a nice little niche in the U.S. However, the U.S. market (population-wise) is 10 times the size of Canada.”

“It is tough for Canadian products in any industry (generally) to compete in America and I do not see cannabis being any different. Even right now in Canada, brands are still struggling to rise to the top, and that’s within the Canadian market. Add in a lot more competition down south and the task becomes even tougher.”

“Federal prohibition has made it very difficult for federally regulated companies to engage with the cannabis industry,” said Maurer. “Even in Canada where cannabis is legal at a federal level, banking continues to be a challenge given the desire of most big banks to steer clear of cannabis companies. [This is because] many of these banks operate outside of Canada (e.g. within the United States) as well.”

“With cannabis legalized at a federal level in the United States, cannabis companies on both sides of the border might find financial services to be much more accessible than they presently are.”

To read the full article, visit Leafly.ca