In a disturbing development, Canadians who have invested in the cannabis industry now face the risk of being banned permanently from entering the United States. This reality came to light when a prominent Canadian venture capitalist, Sam Znaimer, was told he was permanently barred from entering the U.S. due to his equity holdings in American cannabis companies whose shares are publicly traded on Canadian stock exchanges, such as the Toronto Stock Exchange.
He was shocked by the decision, since no single question had been posed regarding whether or not he consumed cannabis.
His shock is understandable given the fact that many people have shares in investment vehicles, such as mutual funds, and those investors have no clue where that money is channeled in order to earn the investor a return on his or her investment.
The example above is just one of a growing number of similar bans handed out by the Customs and Border Protection department of the U.S.
For now, it seems only those who have invested in American cannabis companies are being targeted. However, CBP (Customs and Border Protection) officials have revealed that even those who consume marijuana could be affected, especially when the smell is detected while pre-entry checks are being done at border crossings.
The view of the U.S authorities is that cannabis is a controlled substance, so anyone associated with it contravenes U.S. law and may be denied entry. However, no blanket action is foreseen, and border officials will exercise their discretion in enforcing the eligibility requirements for any alien trying to enter the U.S.
People who have been banned from entering the U.S. due to their connections to the cannabis industry will unfortunately have no recourse regarding the ban. However, the affected persons can apply for a temporary waiver so that they can be allowed into the U.S.
The process of obtaining the waiver is likely to be drawn out and very expensive, since there will be legal fees and application fees. There is no guarantee that whoever applies for the waiver will get it.
The risk of being barred from entering the U.S. is likely to put a damper on people who were considering investing in cannabis stocks. This fear is certainly real for Americans, since cannabis is illegal at the federal level. By law, Americans can’t be denied entry as they return from abroad, but that is little comfort since other actions could possibly be taken against them now or in the future.
It remains to be seen how cannabis players, such as Marijuana Company of America, Inc. (MCOA) and Medical Cannabis Payment Solutions (REFG), will be affected in the medium- and long-term by the tough stance taken by the U.S Customs and Border Protection agency.
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