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What Marijuana Legalization in Canada Could Mean for the United States

What Marijuana Legalization in Canada Could Mean for the United States
From TIME - April 6, 2017

America's neighbor to the north is fast moving toward legalizing recreational marijuana nationwide, which would make Canada the second country in the world to do so. And the impact of having weed legalized on such a big scale, so close to home, may affect the future of pot in the United States.

"There are those who sometimes regard Canada as the 51st state. It would be an important signal about the movement coming of age. It would add to the critical mass, says Oregon Rep. Earl Blumenauer, a member of Congress' newly-formed Cannabis Caucus who is pushing to change the way the federal government treats the substance. And, he says: "It would shift the center of gravity."

When Colorado voters legalized marijuana in 2012, it became the first jurisdiction in the world to regulate and tax pot like alcohol. By the time Election Day was over in 2016, eight states had legalized pot for adult use, covering a population more that double the size of Canada's. (Nearly 30 states have comprehensive medical marijuana laws.) Uruguay became the first nation to legalize marijuana several years ago but has been sluggish in setting up a market. That means that while American states have been blazing the trail, Canada will likely be taking the baton.

Some see that as a "missed opportunity," as Sam Kamin, a marijuana law expert at the University of Denver, puts it. Prime Minister Justin Trudeau's liberal government plans to announce legislation around April 10. And Kamin believes that the model set to be announcedwherein the national government sets big-picture standards but important factors like how to distribute and sell the product are left to the provinces"would have and could work here in the U.S. But we see them passing us in that regard."

In Kamin's view, the upsides America is missing out on include eliminating the costs, financial and personal, of jailing people for selling and possessing pot; driving out the black market through competition; and giving people transparency about what they are buying. But going first could also give Canada a leg up when it comes to the business of pot, drawing capital-flush investors who have been wary to spend their money in the U.S. so long the federal government views marijuana as a drug on the same legal footing as heroin.

Some Canadian companies are already investing in the U.S. marijuana market and looking to license products that have become popular here, says Troy Dayton, CEO of Arcview Group, which runs a network of investors and publishes an annual report on the size of the legal marijuana industry. Assuming legalization comes to pass, "its the Canadian companies that have the best shot of building the biggest portfolios of U.S. companies," he says. He also believes that Canada will be in a good position to set up a lucrative export business, as populous countries like Germany have legalized medical marijuana as a nation and others consider relaxing their laws.

According to Arcview, North Americans spent $6.7 billion on legal pot in 2016, up more than 30% from the year before. And if recreational markets come online as planned in places like Canada, California and Massachusetts, that could more than triple in the next five years, according the company's estimates. Canada moving forward will create some market pressure for the U.S. to step up in areas like innovation and investment as well as policy, says John Hudak, a marijuana policy expert at the Brookings Institution.

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