Canada’s Cannabis Industry new look

The report, which was published earlier last week, indicates that Health Canada has issued licenses to major cannabis producers that have “longstanding ties” to mobsters, including the “powerful” Montreal crime family the Rizzutos. But investigators  — Radio-Canada’s French-language news program Enquête – have so far refused to reveal the companies and the people involved.

Nevertheless, the journalists claim there are some dirty dealings taking place in the Canadian cannabis market – one of which includes a business transaction between a known drug trafficker and a legal cannabis business.

Health Canada has responded to the claim, saying it can “categorically confirm” there are no criminal links to the licensed marijuana producers it has allowed to grow legal cannabis over the past five years. “Health Canada has found no evidence that organized crime has infiltrated one of more than 130 federally registered producers,” a spokesperson by the name of Eric Morrissette told CBC News in an email.

The agency credits its security screening process for keeping criminals out of the legal cannabis sector. Not only does the agency conduct a preliminary examination of all applicants, but it also relies on police databases to determine if they have any relationship with organized crime or other felonious scofflaws.

As it stands, roughly 10 percent of the applications raise some sort of red flag, the agency says, because of associations “with individuals who have criminal records.” And those applications are denied.

Although the background checks required for cannabis producers are rigorous – it is necessary for these companies to disclose all the names of their investors — that doesn’t necessarily mean that criminals aren’t finding a way in.

The report shows that some cannabis firms are funded through family trusts, which keeps beneficiaries anonymous, allowing criminals to weasel into the legal scene through the back door.

Yves Goupil with the Royal Canadian Mounted Police’s organized crime division told Enquête that it would be too costly for police to dig as deeply as they probably should.

“We cannot have a fully bulletproof system,” Goupil said. “If organized crime has an opportunity to make a profit, it will exploit it.”

Legal experts agree that the current system is fallible. They argue that some companies have hazy structures, which can make it difficult to know who is involved.

“You never see who the real license holders are,” said lawyer Marwah Rizqy.

Yet, Border Security and Organized Crime Reduction Minister Bill Blair argues the country’s verification scheme is top-notch. “We have robust physical and personnel security screening processes in place for the existing industry designed to guard against infiltration by organized crime,” he told CBC.

There is no denying that Canada still has a flourishing black market for cannabis, and it probably will for a while. For now, the majority of the problem stems from the shortage of legal weed the country has endured since day one.

But Stephen Schneider, a criminologist at Saint Mary’s University, said last week that even after the shortage is remedied the black market will continue to thrive due to price and privacy concerns.

Because the illicit trade has been around a lot longer and many people are still not ready to come out of the cannabis closet to family and friends, it will take some time before Trudeau’s mission comes out on top.

Meanwhile, there are plenty of opportunities for organized crime to get a piece of the action. Goupil says the RCMP “cannot afford” to use “more advanced techniques” to see that all cannabis firms are completely clean.