Written By: Michael Berger

The House voted to cut funding for the DEA, but apparently they are still pursuing these businesses. Why does the DEA still pursue, why do they still care? With so many much more serious problems today in the United States why does the DEA continue to focus on the selling of marijuana is states where it is already legal, especially after the House of Representatives cut funding directly related to those activities? The U.S. Drug Enforcement Agency has been tracking investments made in state-sanctioned marijuana business in the United States.

Blame Canada?

Due to the regulatory nature of the United States cannabis industry, Canada has been a major beneficiary of fund flows from U.S. investors.

“We really like the Canada model, which is really unlike any other in the world,” said Christian Groh, a co-founder of Seattle-based private equity firm Privateer Holdings, one of the largest players in the medical marijuana sector. “What we’re doing here does not violate local, state and federal law (in Canada).” To ensure that Privateer wasn’t doing anything that had the potential to violate United States federal law, they created a subsidiary which is based out of Canada.

If the DEA decided to pursue companies that are helping fund the cannabis industry, these companies would be facing serious charges.

Timothy White works as a national risk specialist for a firm that helps banks detect and report money laundering. Mr. White said, “U.S. investors in Canadian marijuana firms could be violating drug trafficking and money laundering laws. That is two violations of U.S. federal law. I don’t see there is any way around that.”

To date, there haven’t been any prosecutions by U.S. authorities of investors in Canada. This may be due to the fact that the DEA’s funds have been cut and they have limited investigatory resources to pursue retail investors

Walking the Line

The DEA does not care about Joe Schmo who is investing a couple thousand dollars in marijuana companies. They are interested in going after the big fish, like the private equity firms or institutional investors who are bringing big dollar into the industry.

“The larger institutions have a lot to lose and face a lot of scrutiny because of everything else they do,” said Brian Vicente, a partner at Vicente Sederberg in Denver. “They are not interested in taking that risk at this moment, and that opens up space and opportunities for smaller firms.”

Moves like this by the DEA are restrictive and counterproductive to a market that is making strides to improve the way people live in North America. These strict regulations prevent big firms from stepping in, which ends up preventing the industry from reaching its growth potential.

The marijuana industry does not only consist of people trying to smoke weed and get high. You have pharmaceutical companies that are researching the cannabis plant and developing better treatments for many diseases. The DEA and FDA need to take their heads out of their asses and realize they have no idea what they are talking about. It makes no sense that a drug like cocaine and methamphetamine have LESS RESTRICTIVE schedule that marijuana.

President Obama once said, “It is time for change.” Well why don’t you stop talking about it and start doing something about it. This has gone on for long enough, how many young children must die before we enact change?


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