Client Update: Border concerns growing for cannabis industry participants
News articles have reported Canadians being labelled as “inadmissible” or being denied entry at the United States’ border because of ties to the cannabis industry. Being labeled inadmissible by border authorities is the equivalent of receiving a lifetime ban from entering the United States. Because of these recent developments we provide the following information with respect to persons with ties to the cannabis industry who intend to enter the United States.
Why are Canadians being denied entry?
Although cannabis is legal in some states, it is not legal federally in the U.S. where it remains listed as a Schedule I drug under the U.S. federal Controlled Substances Act. U.S. Borders are within the jurisdiction of U.S. federal laws, rather than state laws. Federal laws apply when crossing the border.
What made these Canadians inadmissible?
Media reports reveal several reasons Canadians have been denied entry to the United States:
- Admitting to past or present consumption of cannabis;
- Investing in American cannabis companies;
- Leasing space to American cannabis companies; and,
- Intending to enter the United States to discuss designing equipment for a cannabis company.
Travelers should note that a person who is caught lying or misrepresenting material facts at the border can also be deemed inadmissible for that reason alone.
What are the rules?
The United States’ immigration legislation is broadly-worded and there is little official guidance on how border authorities should handle cannabis-related concerns. Border authorities have significant discretion which has led to some confusion regarding what can lead to inadmissibility.
Under the Immigration and Nationality Act individuals who have been convicted of, or who admit to having committed the essential elements of, “a violation of (or a conspiracy or attempt to violate) any law or regulation of a State, the United States, or a foreign country relating to a controlled substance” are inadmissible to the United States.
There has been no indication that the passing of the Cannabis Act in Canada will eliminate the risk of Canadians with ties to the cannabis industry being considered inadmissible. The Government of Canada’s warning to Canadians travelling to the United States remains important:
“Previous use of cannabis, or any substance prohibited by U.S. federal laws, could mean that you are denied entry to the U.S.. Involvement in the legal cannabis industry in Canada could also result in your being denied entry.”
The Cannabis Act becomes law on October 17, 2018, and regulated activities associated with cannabis will no longer constitute controlled substance offenses in Canada as of that time. After legalization, if legal cannabis-related activities occurred only in Canada, it may be determined that these activities would not amount to grounds for inadmissibility. However, until official guidance is provided from the Government of the United States that says otherwise, mentioning cannabis-related activities at the border will continue to pose a risk of being labelled inadmissible.
Even once across the border, there are other federal U.S. laws which pose problems for cannabis industry actors intending to do business in the U.S., such as anti-money laundering rules, which have caused concern for U.S. Banks who refuse to take proceeds of cannabis sales.
What if I am deemed inadmissible?
If you have been labelled inadmissible on cannabis-related grounds, you can still apply for a travel waiver to enter the United States. However, applying for a waiver can take a year to process and comes at significant cost. A waiver is granted on a discretionary basis and there is no guarantee it will be granted.
This update is intended for general information only. If you have questions about the above information, and how it applies to your specific situation please contact Kevin Landry.
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