Cannabis and Canada: A Growing Opportunity
- Keywords:
- cannabis
- north american trade
The evolving cannabis landscape represents an opportunity for North American trade. Although the legal picture in the U.S. continues to be murky, some companies are exploring their options north of the border.
Abigail Picotte, Legal Director with Hawthorne Gardening Company, a subsidiary of Scotts Miracle-Gro Company, and her team are closely following the evolving cannabis landscape. “When people are trying to grow things, Scotts Miracle-Gro is interested,” Picotte says, addressing the company’s entry into the segment and subsequent growth into the largest hydroponic distributor in North America via Hawthorne.
Participating in the industry, of course, raises the issue of operating within myriad and oft-changing regulations, particularly in the U.S. Given the mismatch of state and federal law—that is, despite legalization of either medical or recreational use in a growing roster of states, cannabis is still illegal under U.S. federal law—Picotte noted companies participating in the industry must balance legal considerations and the growth and success of their businesses.
To that end, Hawthorne does not sell directly to any growers in the U.S. Company representatives are constantly aware of whom they are talking to, and they’re cognizant of staying away from anyone not in compliance with both federal and state laws. Even “states [with some form of legalization] are still trying to figure out how to implement their regulations, and that unfortunately leaves a big market open for illegal operations, so we really err on the conservative side,” Picotte says.
Picotte and her team also work closely with their banks to consider all elements of federal compliance. They’re closely tracking the SAFE Banking Act—which will influence how banks operate in the space and how cannabis businesses can access banking services—as well as the STATES Act, proposed legislation that would basically cede regulation of marijuana to the states.
But according to Picotte and many others, neither will be a complete fix, and both will continue to be held up by the identification of gaps and the remaining disconnect between state and federal law, so long as cannabis remains federally illegal.
Canadian Prospects
As Hawthorne cautiously expands in the U.S., it is, importantly, also expanding in Canada. Upon its formation, the business immediately looked up north, which even prior to the 2018 nationwide legalization of cannabis had legalized medical marijuana and licensed growers across the country.
“We can more freely have these conversations in Canada—conversations we’ve been having with growers for 150 years about how our products can help them grow their best product,” Picotte says. In Canada, Hawthorne has enabled a sales force to work directly with growers and even partnered with pioneering Canadian cultivator, Flowr on a first-of-its-kind R&D facility in British Columbia.
“It’s another opportunity Canada presents that we don’t yet have in the U.S.,” Picotte says. “That is, being able to conduct research and development of our products on the actual plant. It’s a testing ground and it is also in its own right a really huge opportunity for us.”
Kimberly Dennis
, Managing Director, Commercial Banking, also contributed to this article.
Read more
Laura Ullman
Director, Cross Border Banking
The evolving cannabis landscape represents an opportunity for North American trade. Although the legal picture in the U.S. continues to be murky, some companies are exploring their options north of the border.
Abigail Picotte, Legal Director with Hawthorne Gardening Company, a subsidiary of Scotts Miracle-Gro Company, and her team are closely following the evolving cannabis landscape. “When people are trying to grow things, Scotts Miracle-Gro is interested,” Picotte says, addressing the company’s entry into the segment and subsequent growth into the largest hydroponic distributor in North America via Hawthorne.
Participating in the industry, of course, raises the issue of operating within myriad and oft-changing regulations, particularly in the U.S. Given the mismatch of state and federal law—that is, despite legalization of either medical or recreational use in a growing roster of states, cannabis is still illegal under U.S. federal law—Picotte noted companies participating in the industry must balance legal considerations and the growth and success of their businesses.
To that end, Hawthorne does not sell directly to any growers in the U.S. Company representatives are constantly aware of whom they are talking to, and they’re cognizant of staying away from anyone not in compliance with both federal and state laws. Even “states [with some form of legalization] are still trying to figure out how to implement their regulations, and that unfortunately leaves a big market open for illegal operations, so we really err on the conservative side,” Picotte says.
Picotte and her team also work closely with their banks to consider all elements of federal compliance. They’re closely tracking the SAFE Banking Act—which will influence how banks operate in the space and how cannabis businesses can access banking services—as well as the STATES Act, proposed legislation that would basically cede regulation of marijuana to the states.
But according to Picotte and many others, neither will be a complete fix, and both will continue to be held up by the identification of gaps and the remaining disconnect between state and federal law, so long as cannabis remains federally illegal.
Canadian Prospects
As Hawthorne cautiously expands in the U.S., it is, importantly, also expanding in Canada. Upon its formation, the business immediately looked up north, which even prior to the 2018 nationwide legalization of cannabis had legalized medical marijuana and licensed growers across the country.
“We can more freely have these conversations in Canada—conversations we’ve been having with growers for 150 years about how our products can help them grow their best product,” Picotte says. In Canada, Hawthorne has enabled a sales force to work directly with growers and even partnered with pioneering Canadian cultivator, Flowr on a first-of-its-kind R&D facility in British Columbia.
“It’s another opportunity Canada presents that we don’t yet have in the U.S.,” Picotte says. “That is, being able to conduct research and development of our products on the actual plant. It’s a testing ground and it is also in its own right a really huge opportunity for us.”
Kimberly Dennis, Managing Director, Commercial Banking, also contributed to this article.
This is part 2
of a
2-part series on
While the legal picture for cannabis in the U.S. continues to be murky, some companies are exploring their options north of the border.
PART 1
Bright Spots in North American Trade Opportunities
Laura Ullman | September 26, 2019 Doing Business In Canada
BMO recently sat with a group of cross-border experts to discuss the state of play for businesses regarding the economy, trade, tariffs, and even an …
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