Pot is legal on both sides of the border between Canada and Michigan. But there’s still some burning issues. Canadians traveling to even talk with the U.S. pot industry can be banned from the U.S. And Michigan medical dispensaries face a severe pot shortage. Quinn Klinefelter reports.
Investors are smelling the profit potential in legal marijuana.
And the latest fertile field for financiers is Michigan, the 10th U-S state to legalize pot for recreational use - and the only one in the Midwest.
Michigan also shares a border with Canada, where pot was legalized in October.
But anyone in the cannabis industry trying to cross that border could see their right to enter the U.S. go up in smoke.
The U-S Transportation Department says more than a quarter of all the trade between the U-S and Canada crosses through the Detroit-Windsor Tunnel and the nearby Ambassador Bridge.
But Customs Officer Agron Martini says some travelers may not make it through if there’s even a whiff that their trip involves marijuana.
“Anytime somebody plans on entering the United States to involve themselves in the distribution, proliferation, possession of any form of marijuana, that could lead to them being found inadmissible.” Martini said.
Even traveling just to discuss doing business with the U-S pot industry can be considered illegal drug trafficking.
About a month ago Canadian cannabis consultant Rod Elliot says he and roughly two-dozen others were detained before they could board a flight to a marijuana business conference in Las Vegas.
“We were able to get through the next morning. There were people who were traveling to that conference who told the border agents that they were investors in the U.S. cannabis industry." Elliot said. "And those people were given a lifetime ban.”
So Elliot says he and some of his colleagues will simply avoid taking business trips to the U.S.
Michigan’s budding cannabis market next door to Canada is drawing significant investment interest.
But Detroit Medical marijuana dispensary owner Stuart Carter says the numerous investors knocking at his door are all based in the U.S.
“And there are two-to-three hundred million dollars in investment money looking to find homes in Michigan.”
Carter says he’s turning down investors, preferring to put his own money in the Utopia Gardens dispensary.
Yet he says licensed dispensaries in Michigan do face a big problem – a shortage of marijuana.
The state used to allow caregivers for medical marijuana patients to sell any excess pot to dispensaries.
But Carter says the state now mandates that dispensaries buy only from licensed marijuana growers.
And he says they have not grown enough pot yet to supply dispensaries.
“The state had to extend a deadline that allowed dispensaries to buy from caregivers because there was literally no product available for us to sell.” Said Carter.
By the start of next year caregivers will be required to sell their product only to growers who will then sell it to dispensaries until the growers can produce enough pot of their own to sell.
Carter says that could take six months or more, with the roughly three dozen licensed dispensaries in Michigan taking a big financial hit.
He says growers are asking more than double the price caregivers used to charge with no real end in sight.
“The growers will not have product." Carter said. "There will probably by June of next year be three times as many dispensaries as today. So how are they gonna have the productivity to supply a hundred? It’s a ridiculous middleman gouge.”
He estimates there’s also about a hundred unlicensed dispensaries, which can buy their pot on the black market if necessary and take customers away from the shops that are following the state’s rules.
With marijuana legal in both Canada and Michigan now, there’s likely no shortage of pot on the street.
Carter says Canadians in the cannabis business potentially being banned from crossing the border will not affect his dispensary.
But even so, marijuana remains criminalized under U-S federal law. And Carter says he takes no chances at a Customs toll booth.
“I don’t even take my business card because I’m not interested in being scrutinized by the Border Patrol.”
With Michigan’s cannabis industry still flowering, those involved in it don’t want to burn any future bridges. Especially those that cross the border.
