Trump Could Use U.S. Trade Agreements to Bully Canada’s Emerging Cannabis Industry

Last month, (allegedly) following a call from U.S. President Donald Trump, Israeli Prime Minister Benjamin Netanyahu delayed a long-held plan to export Israeli medicinal cannabis. It was a troubling moment for Canada’s cannabis sector, as it signaled the possibility that he could try a similar direct or indirect tactic to hamper Canada’s own legal cannabis and export industry.

This year, Canada will become the largest country in the world to legalize adult-use recreational cannabis. With the legalization of recreational cannabis, Canada is seeking to further expand its lead in the worldwide cannabis sector. Health Canada has granted several Canadian companies licenses to export cannabis. Canadians should not be overly optimistic on how the industry is viewed by the U.S. because neither recreational cannabis nor medicinal cannabis are legal federally in the U.S. — making banking, accessing capital markets and inter-state and international trade illegal.

President Trump came into office promising to renegotiate the nation’s trade deals. All U.S. trade agreements (including NAFTA) preclude the trading partner from legalizing any drug that the federal government classifies as illegal. That is why so many nations have ‘decriminalized’ cannabis vs. making it legal. Now, many proponents of the cannabis industry fear that the NAFTA renegotiation may give the Trump administration the muscle to try and derail the industry before it gets off the ground.