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As Canada Moves to Legalize Marijuana, U.S. Hope for Legalization Remains a Pipedream

19:57 12 December 2015 Author :  


Canada recently reaffirmed its commitment to legalize recreational marijuana, but don't expect the U.S. to follow in the footsteps of its neighbor to the north anytime soon.

Marijuana legalization's momentum continued last week, albeit outside of the United States.

The highly controversial drug, which has harnessed the spotlight in the United States and forced presidential candidates to step out of their comfort zones during national debates, is making headlines north of the border in Canada, where lawmakers are pushing ever closer to legalizing the drug for recreational purposes.

Canada moves toward legalization 
As it stands now, marijuana is legal across Canada for medicinal or industrial purposes as long as you have a government-issued license. Recreational marijuana is also acceptable in some cities, but the laws governing recreational marijuana aren't universal across the vast expanse of Canada.

Trudeau Fb


Newly elected Liberal Party Prime Minster Justin Trudeau aims to change that. Running on a platform that offered multiple pledges, including new investments in infrastructure, new greenhouse gas emission standards, and a tax cut for middle-income earners, Trudeau also indicated that he planned to push Canada's parliament to legalize recreational marijuana. Understandably, it won't be a free-for-all; there will still be restrictions on access to recreational marijuana. However, Canada appears poised to become the first G7 nation (a group of seven leading global countries) to legalize marijuana in the somewhat near future.

In a speech released by the media last week, Canada's Governor General David Johnston had this to say:

"[T]he government will introduce legislation that will provide greater support for survivors of domestic violence and sexual assault; that will get handguns and assault weapons off our streets; and that will legalize, regulate, and restrict access to marijuana." 

The expected legalization in Canada is also made possible by the fact that medical marijuana has been legal in the country (at least for certain ailments) since 2001. Because Canada has had the groundwork laid out regarding growing, processing, and selling the drug for medicinal purposes for quite some time, the assumption is that the transition to nationwide legalization for recreational purposes should be smooth and straightforward. 

Hope for legalization anytime soon in the U.S. is a pipedream
South of the Canadian border, however, U.S. lawmakers really aren't any closer to changing federal laws governing marijuana than they were five years ago. With the exception of relaxed obstacles to research, marijuana remains just as illegal today as it has been in the past at the federal level.

Although 23 states legalized medical marijuana and four states -- Oregon, Washington, Colorado, and Alaska -- passed laws for legal recreational use, two major barriers remain that will likely keep the U.S. from following in Canada's footsteps.


First, the U.S. doesn't have any sort of uniformity when it comes to implementing marijuana laws. What this means is that even in states that have chosen to legalize marijuana, individual jurisdictions within those states still consider it illegal. In Colorado, for instance, three-quarters of all jurisdictions within the state still hold marijuana to be illegal. It could be difficult to nearly impossible to get all 50 states on the same page in terms of regulating the drug should the federal government legalize marijuana in a similar fashion as Canada has proposed to do.

Secondly, and perhaps most importantly, lawmakers in the U.S. aren't convinced as of yet that marijuana is beneficial medically or safe over the long run. For decades, marijuana research in the U.S. entailed researching its risks, with very few studies examining its benefits. This has left researchers and members of Congress with a skewed profile of marijuana that generally suggests it could be a dangerous drug. In order for Congress to make a fair assessment of marijuana's risk-versus-benefit profile, it'll need long-term data on what benefits the drug may offer, as well as how it affects a user's body and mental state. It's possible Congress may like what it sees when the puzzle pieces are all put together, but we're probably talking about a puzzle that's going to take many years to assemble.

Common struggles may exist too
Despite Canada's willingness to push forward with its legalization efforts, it may uncover potential legalization potholes that are similar to what its neighbors to the south have experienced.

For example, Canada may discover that it's really difficult regulating edible marijuana. Not only can it be tough policing the quality and consistency of the product being produced, but it's a lot tougher to regulate a product that looks like an after-dinner treat and not like a green-leafed plant. Ensuring edibles are properly labeled and that they don't fall into the hands of minors could be challenging. This is something that Colorado and Washington are both working to perfect at the moment.

Driving while under the influence of marijuana is another topic that's gaining attention in the U.S., and could be a tricky topic for parliament to tackle in Canada. A recently released report from the Governors Highway Safety Association, which pulled data from the National Highway Safety Administration, shows that the number of drivers testing positive for illegal drugs rose from 12.4% in 2001 to 15.1% between 2013 and 2014. Further, 38% of fatally injured occupants were found to have detectable levels of illegal drugs in their systems. This figure doesn't dole out the specifics of what role marijuana itself may have played in the aforementioned fatalities, but the advocacy group doesn't hide its opinion that marijuana appears to be a growing culprit behind instances of driving under the influence.

Marijuana businesses may find success in Canada, but not in the U.S.
Canada's push to legalize could create a green exodus up north, depending on how Canada chooses to legalize recreational marijuana. A developed and strong economy like Canada's would represent an intriguing market opportunity for some marijuana businesses.

However, within the U.S. it doesn't look as if things are going to get any better anytime soon for marijuana-based businesses. The expected long wait for marijuana's safety profile to develop means little impetus for change on Capitol Hill. This means marijuana businesses in the U.S. will continue to be exposed to unfavorable tax laws that don't allow them to take business deductions, and access to basic banking services, including checking accounts and lines of credit, will probably be minimal at best.

Marijuana may appear to offer a lot of potential from the perspective of the average investor, but its long-term outlook within the U.S. remains cloudy at best. Until we see definite progress at the federal level in terms of decriminalizing or legalizing the drug, marijuana remains an extremely risky investment that's probably best off avoided altogether.

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