The implications of cannabis legalization and cross-border travel
By Naumaan Hameed
The information within this article was current and accurate at the time of writing. Readers are encouraged
to review the latest developments of legalization to ensure they are equipped with the most up-to-date information.
The impending legalization of marijuana in Canada, effective Oct. 17, 2018, has created a climate of excitement in the marketplace. Businesses recognize the untapped potential and diverse opportunities the new law will bring forth. In turn, they will respond with the emergence of more cannabis operations, employment opportunities and start-up ventures, along with new developments related to the production, distribution and retail sales of the substance. Existing mainstream businesses are also positioning themselves to capitalize on specialized commercial needs unique to the cannabis trade. As an example, professional services firms, financial institutions, consulting and technology companies are developing new and focused service lines catered specifically to the cannabis industry.
While businesses are acting quickly to develop robust business strategies for financial success, many market participants overlook the significant cross-border travel challenges that will arise from the legalization of marijuana in Canada. Specifically, many businesses are blind to the potential issues that employees associated with the cannabis trade, either directly or indirectly, may face when entering the United States as a business traveller. These individuals may face serious immigration consequences, including a finding of inadmissibility or a permanent bar from entering the United States. Furthermore, following the legalization of marijuana in Canada, it is possible that business travellers will face increased questioning by U.S. immigration officers about personal marijuana use which can result in similar consequences for users. Companies may face lost opportunities and/or business failure in the event that key talent is unable to enter the U.S. market.
HR professionals, global mobility advisors, in-house legal counsel and public relations departments supporting businesses in this space must be aware of these issues and assess how their workforce could be impacted.
What’s the issue?
U.S. immigration law, including the admission of a foreign national entering the United States for business purposes, is governed by federal law. Although marijuana is legal in many states, it is illegal pursuant to federal law in the United States. Specifically, marijuana is prohibited under Schedule 1 of the Controlled Substances Act as it is deemed to be addictive in nature with no medicinal value.
Under the Immigration and Nationality Act (INA), there are specific grounds relating to criminality that would render a foreign national inadmissible to enter the United States. As an example, a foreign national seeking entry into the United States is deemed inadmissible where there is reason to believe that he or she is or has been an illicit trafficker of any controlled substance or is or has been a known aider, abettor, assister, conspirator or colluder with others in the illicit trafficking of a controlled substance.
These provisions are relevant for individuals employed directly in or involved in the marijuana trade and seeking admission into the United States for business purposes. It should be noted that Customs Border and Protections (CBP) officers at a land border, international airport or pre-clearance facility routinely ask business travellers questions about their intended activities and employment in determining eligibility for admission.
From a personal use perspective, under the INA, individuals that have been convicted of or have used a controlled substance, including marijuana, can be deemed inadmissible to the United States based on criminality concerns. This finding requires that marijuana use is considered a crime in the jurisdiction where it is committed. For example, a Canadian seeking entry to the United States who has used marijuana in Canada prior to Cannabis legalization faces this risk if asked by a CBP officer about use prior to Oct. 17, 2018.
After marijuana is legalized in Canada, legal use will not render an individual inadmissible to the United States on the basis of criminality. However, users may still be deemed inadmissible for other grounds, such as being deemed a drug addict or suffering a mental/physical illness. Moreover, there is a reasonable possibility that CBP officers will more regularly ask questions about personal use after marijuana is legalized in Canada, given the significant publicity.
Business travellers working in the cannabis industry
A business traveller who works directly in a cannabis business in Canada and seeks entry to the United States to perform related business activities faces the risk of being deemed inadmissible. Specifically, an immigration officer may conclude that such individuals are trafficking a controlled substance as they are employed in the marijuana trade and intending to carry out related activities in the United States, contrary to the INA.
The potential consequences can include the denial of entry and an inadmissibility finding leading to permanent bar of the worker and his/her spouse and children. It is possible to seek a waiver if a permanent bar is issued. However, the waiver process requires considerable preparation and processing time and, if issued, has a maximum validity of only five years (subsequent renewals would be required). Moreover, in order to obtain the waiver, the applicant presumably could no longer be involved in the cannabis trade.
Business travellers associated or doing business with the cannabis industry
Similar risks may also extend to business travellers who do not work directly in a cannabis company in Canada but provide services or engage in commercial dealings with marijuana businesses. More specifically, an immigration officer may find that such an individual is a knowing assister, abettor, conspirator or colluder with others in marijuana trafficking. This could include, for example, a Canadian employee seeking to enter the United States in order to make a financial investment in a marijuana company, a consultant seeking to develop strategies to enhance cannabis distribution capabilities, or even an accountant offering professional services to a marijuana operation in the United States.
There is currently little formal guidance on this point, which effectively leaves immigration officers with significant discretion to determine whether an individual should be considered an illicit trafficker in a controlled substance or a knowing assister, abettor, conspirator or colluder.
Recommendations for HR professionals
The number of cannabis-related companies and businesses providing services for the industry will continue to increase with Canada’s upcoming legalization of marijuana. It is critical for HR professionals within these businesses to assess cross-border considerations related to Canadians and other foreign nationals travelling to the United States, including:
- Promoting awareness. Ensure that business leaders and employees are aware of the current climate and risks of cross-border travel into the United States as it relates to the marijuana trade and personal use. Despite the increased attention on the upcoming legalization of marijuana in Canada, there is significant confusion and lack of awareness about the risks to business travellers connected to the cannabis industry.
- Identifying service lines and employees at risk. Depending on the type and structure of your business, there are certain individuals and services lines that are more likely to face higher risks when entering the United States for business travel (i.e. executives in a cannabis company). It is critical to identify these groups in advance and develop appropriate strategies to mitigate risks.
- Developing specific cannabis policies as part of your business traveler policy. After developing a corporate strategy for business travel related to the cannabis trade, document any specific processes as part of your short-term business traveller policy. This may also include the assignment of additional responsibilities to your immigration compliance officer or legal advisor to respond to specific issues related to cannabis. Furthermore, as part of your policy, consider the development of specific training or guidance for business travellers to ensure they understand their legal obligations and risks seeking entry to the United States, while also being well prepared to anticipate and respond to admissibility-related questions, if raised.
Naumaan Hameed is a partner, Canadian Immigration Practice Leader at KPMG Law LLP.