The US Drug Enforcement Administration could bring the hammer down on American investors gambling in the Canadian medical marijuana market, according to a representative with the federal agency, who claims that Uncle Sam is extremely interested in prosecuting these types of transactions for violations of the Controlled Substance Act.
In fact, while it may be viewed as a profitable investment to sink capital into Canada’s newly reformed medical marijuana industry, some of the necessary protocol involved, including the use of banks to transfer funds, could by viewed as money laundering in the eyes of the US government.
We are “most interested in those types of activities,” DEA spokesman Rusty Payne told Reuters last week, adding that American investors need to understand that dabbling in Canada’s medical marijuana market is risky and reckless business.
American Investors are interested in exploring medical marijuana in Canada, as opposed to European markets, because the industry is projected to generate well over a billion Canadian dollars within the next ten years. This, in turn, has caused some investment firms to establish Canadian subsidiaries in an attempt to avoid unwanted trouble with the American government, while some investors are not at all concerned with this crucial detail.
“We really like the Canada model, which is really unlike any other in the world,” said Christian Groh, with Privateer Holdings. “What we’re doing here does not violate local, state and federal law (in Canada).”
So far, no one has been prosecuted as a result of engaging in these types of investments, says Payne. However, this is largely due to the agency’s “limited investigatory resources,” which has taken the heat off small investors and placed it on the backside of those throwing a significant amount of capital into the Canadian pot market.
While 23 states have legalized medical marijuana, many investors hope that more of America will follow in the footsteps of Colorado and Washington, so they can get in on the ground floor of the nation’s recreational market.