(Reuters) – U.S. investors in Canada’s medical marijuana industry are betting they will not fall under the scrutiny of U.S. law enforcement officers – but it is a risky bet.
With marijuana still illegal on a federal level in the United States, American investors in Canadian medical marijuana can be seen as violating the Controlled Substances Act, according to some U.S experts. And the use of the banking system to transfer the proceeds of such investments could be seen as money laundering.
The U.S. Drug Enforcement Administration has already been tracking investments made in state-sanctioned marijuana business in the United States. When asked by Reuters about the DEA’s view of U.S. investments in Canadian marijuana, DEA spokesman Rusty Payne said the agency is “most interested in those types of activities.”
After the Reuters report, shares in Canadian medical marijuana companies fell sharply at the open before recovering some ground. OrganiGram Holdings Inc (OGI.V) dropped 6.9 percent in early trading, Bedrocan Cannabis Corp (BED.V) fell 4.2 percent and Tweed Marijuana Inc (TWD.V) declined 2.8 percent.
U.S. investors have been increasingly drawn to the raft of public listings by producers that has sprung up since Canada overhauled its laws this year, making it legal to buy marijuana from licensed producers with a doctor’s prescription.
Canada’s medical marijuana market, which is expected to grow more than tenfold, to C$1.3 billion, in a decade, has matured more rapidly than its peers. While U.S. investors have several European markets where medical marijuana is legal on …read more