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article imageUS pot producer asks Trump to stop Canada's domination of market

By Karen Graham     Oct 16, 2018 in Business
An American marijuana producer is warning Donald Trump that Canada is poised to take over the North American cannabis market and he needs to do something to eliminate barriers to financing and market capital in the U.S.
Derek Peterson, the CEO of California-based marijuana producer and seller Terra Tech has been keeping his eyes on the cannabis market in Canada for quite a while, according to the Huffington Post back in September this year.
And even then, he could see an invasion of sorts, into U.S. markets by Canada's cannabis firms, today the world's largest. But this was to be expected, seeing as U.S. federal law considers the possession and/or use of marijuana a federal crime.
"The concern for some of the players is the market will be dominated by Canadian companies, shareholders, and banks if we allow too much time to pass," Peterson told the Huffington Post by telephone from California.
In the last quarter that ended June 30, 2018, Terra Tech generated revenue of $8.72 million, up 11 percent from the $7.84 million in sales from the same reporting period in 2017. Growth was due to sales from its Blüm, Santa Ana dispensary in California and from dispensaries in Nevada, Seeking Alpha reported on Monday. As of today, October 16, Terra Tech shares are trading at $2.12.
The day before Day 1 is here
Tomorrow is the big day in Canada for cannabis users. Pot stocks appear poised to continue their rally. Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON) and Canopy Growth (NYSE:CGC) are up 6 percent, 11 percent, and 4 percent, respectively, premarket.
Canada legalising recreational marijuana.
Canada legalising recreational marijuana.
JEFF VINNICK, GETTY IMAGES NORTH AMERICA/AFP/File
And today, Terra Tech, in an effort to fight back at Canadian cannabis producers, took out a full-page in the Wall Street Journal, framed as a plea to President Trump that warns the U.S. is “rapidly losing” its competitive advantage to Canada, where recreational pot is poised to become legal at midnight.
“The cannabis industry is legal in 31 states, yet most domestic companies do not have access to traditional banking or institutional financing,” reads the ad that is signed by Derek Peterson, chairman, and CEO of California-based Terra Tech Corp.
“As a result, many U.S. companies are being forced to move to the Canadian public markets to access capital and build their businesses.”
The ad also points out that Canadian cannabis firms have already tapped into U.S. investor interests in order to raise money and spent it to acquire American pot businesses. “Regrettably, this will put what should be one of our homeland’s greatest economic drivers in foreign control.”
The ad notes that this is a major issue with American marijuana producers. Even though recreational cannabis is legal in nine states and medicinal pot in 22 others, it is still illegal under federal law. This means that pot cannot be transported or sold across state lines, and it is impossible for a cannabis company to obtain financing from any of the major banks.
Canopy Growth ranks as the biggest pure-play marijuana stock on the planet right now. Canopy had a m...
Canopy Growth ranks as the biggest pure-play marijuana stock on the planet right now. Canopy had a market value of C$7.1 billion ($5.4 billion) as of Tuesday, August 14, 2018.
Canopy Growth
Peterson proposes a solution to the problem: The feds should allow the individual states to enact their own cannabis regulations, "so that we can fairly compete and protect our domestic industry before it's too late." And this is exactly what Canada has done with its provinces and territories, all with making recreational marijuana use legal nationwide.
As with many campaign promises made by Trump before becoming president, his promise to leave regulations up to the states was reversed when the White House rescinded the so-called Cole memorandum, an Obama-era edict that prevented federal interference with those states where recreational cannabis is legal.
But on a lighter note, on Wednesday, Canada will become the first G7 country to legalize the use of recreational marijuana, while today, U.S. Customs and Border Patrol officials are holding a briefing for agents on how they plan to enforce federal pot laws at Canada-U.S. border crossings.
More about Marijuana, Canada pot market, US Market, Trump, competitive advantage
 
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