Colorado and Washington may have jumped ahead in the race to become North America's marijuana kings, but Canada is now positioned to take a lead in the booming multibillion-dollar industry.
Canadian leaders could legalize recreational marijuana use as soon as next year, potentially opening the door for pot to be sold at pharmacies and province-run liquor stores. Medical cannabis has been legal in the country since 2001.
Under the new legislation, marijuana growers and distributors in Canada would also find themselves free of the trip wires that make the pot business in the U.S. risky – such as being barred from opening bank accounts or doing business with big-money investors.
"There is a lot of excitement and optimism from marijuana businesses and entrepreneurs in the U.S., who have their fingers crossed that Canada is going to pull this off," says Chris Walsh, editorial director of Marijuana Business Daily, published in Rhode Island.
Canada's expected move to legalize recreational pot won't lead to instant world domination. But the plan represents a huge market for U.S. businesses and investors who have already identified an opportunity north of the border, Walsh says.
Two years ago, Seattle-based Privateer Holdings Inc. became the first American-owned company to open a commercial medicinal cannabis production facility in Canada. Derek Ogden, chief executive of of the Ottawa-based National Access Cannabis network of education clinics, says he believes Canadian pot producers could one day export their product to the U.S. and, conversely, import weed from the U.S., though he acknowledges that would happen only under a reciprocal trade agreement, and only if the U.S. legalizes marijuana at the federal level.
Canadian Health Minister Jane Philpott told a United Nations General Assembly in April that the country would introduce legislation next spring to legalize and regulate recreational marijuana.
It would be the law of the land, unlike the state-by-state checkerboard of laws in the U.S. Although a state may legalize marijuana use, the federal government still classifies pot as a Schedule 1 drug, along with heroin and LSD.
Marijuana is a $4.3-billion industry in the U.S. But in Canada, where there are now fewer than 30 government-licensed companies, it generates no more than $150 million in sales.
Former Toronto police Chief Bill Blair, now a liberal member of Parliament, was appointed Canada's marijuana czar by Prime Minister Justin Trudeau and asked to figure out where and how pot should be sold. A federal task force is expected to forward recommendations to Trudeau by November.
Ogden, who spent more than 25 years as an officer with the Royal Canadian Mounted Police, is among those eager to see to see the results of Blair's game plan.
Currently, only licensed producers are allowed to distribute medical marijuana by mail to people authorized to use it by a doctor, although that's expected to change by August following a Federal Court ruling this year that ordered Health Canada to allow patients to grow their own therapeutic pot.
Storefront dispensaries are banned in Canada, a point illustrated when police recently raided 43 unlicensed operations in Toronto and seized 595 pounds of pot. Criminal charges were filed against 90 dispensary owners and employees.
But on the West Coast, Vancouver has flouted the law and recently issued its first business license to a medical marijuana dispensary under regulations the city established last June. Victoria, the capital city of British Columbia, is planning similar regulations.
Canadian pharmacies have expressed interest in selling medical cannabis, while province-run liquor stores want a piece of the recreational marijuana market – an idea that both Trudeau and Blair support.
Ogden says, "It's a matter of time before medical cannabis is legal in the U.S."
"On the recreational side," he added, "governments like Canada's look at it as a revenue source and feel that it makes no sense to exclude all of this potential money from their coffers when people are going to continue to consume cannabis, and preventing them from doing so legally is just going to drive them to the black market."
Guly is a special correspondent.