While the US lags behind Canada and other countries moving toward more friendly federal cannabis policies, some are predicting a negative impact on other international trade between the two countries. Not only is the US ceding billions of dollars in annual revenue for the global cannabis market, there is a good chance that other industries are going to have to share the burden of increased costs for enforcement at the US/Canada border.
Academic Matthew Smith recently led a study on the impact of inspections and detainments at the US/Canada border following September 11th, 2001. Matthew and his team found that businesses and individuals have often carried the costs of increased paperwork and time-delays associated with thickening borders, despite efforts to remain efficient for businesses regularly trading across the borders. They postulate that a similar situation may occur after July 2018, when Canada’s new adult-use legalization law goes into effect.
From the Policy Options news site:
“Regardless of the legality of cannabis in Canada as of July, transporting it across the Canada-US border will still be illegal. It is likely that the Canada-US border will thicken after marijuana is legalized in Canada. When crossing the border becomes more onerous as a result of changes to customs inspection protocols or increased security measures, firms face higher costs. These costs range from increased paperwork, spoilage of perishable goods, and the inability to deliver components to just-in-time delivery networks. As these delivery networks are highly integrated and rely on short time frames for deliveries to be shipped and received, the negative impact of border delays can be considerable. The overall impact on businesses that operate across the border can be severe.
“The change in legal status of the drug in Canada may lead US border services to adopt new border inspection processes on Canadian shipments entering the US. Depending on the state of NAFTA talks later this year, President Donald Trump may also seek ways to pressure Canada into concessions at the negotiating table: slowing Canadian exports at the border on national security grounds arising from marijuana’s legalization is one possible tactic. The negative consequences of such border thickening could be considerable for both countries, but especially for Canada due to Canada’s high reliance on trade with the US.
“…Border thickening has other negative effects for business travellers and individuals visiting the US. Security measures at the border following 9/11 created a ‘psychological border’ for Canadians, whereby the fear of facing stressful questioning when attempting to cross the border made travel to the US less appealing. The post-9/11 period saw a significant decrease in cross-border shopping partly because of such intimidating customs procedures.”
Let’s hope the United States can get it’s act together soon, as the world grows up around us to recognize the benefits of cannabis legalization. It would seem that even on a meta-scale, cannabis can bring people together whereas prohibition tears them apart.
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