Canadian lawmakers have been batting around the idea of creating another cross border trade deal with the U.S. But this deal wouldn’t be for steel or wheat or cars. It would be for marijuana—that is at some point in the future, if Washington DC lawmakers ever get around to ending 80 years of federal prohibition.

The issue stems from Canada’s supply and demand problem. Demand for legal marijuana has been high since Canada became the first G7 country to legalize cannabis, but the supply has been falling short.

Meanwhile, an export deal could be a godsend in U.S. states such as Oregon, where they say they’re sitting on about a six-year supply of cannabis flower.

"The biggest issue that we faced in Canada is an unanticipated demand for a legal product, so shortage of supply. Problems with supply chain." —Ontario Senator Tony Dean at a briefing with U.S. Congressional staff on Tuesday (source: Newsy).

Marijuana prices are soaring in Canada and plummeting in Oregon

With all the money being poured in Canadian licensed producers, you would think Canadian dispensaries would have plenty of bud on their shelves. But the reality of the situation is that Canadian LPs are relatively young. And production capacity is still trying to catch up to the sudden rise in demand resulting from the legalization of so-called recreational marijuana.

As a result of high demand and inventory shortages—we all know the formula—prices are higher than they might otherwise be if supplies were keeping pace. One thing that hasn’t changed, however, is the price for black market marijuana. And, although there is a willingness on the part of some to pay a little bit more for pesticide-free, mold-free cannabis, many of those who can’t afford or can’t get their hands on the legal stuff are turning around and heading back to their local dealer.

Solving both issues

As you can imagine, lawmakers in both Oregon and Ontario are looking for solutions, and one solution being considered is literally impossible in this day and age—importing marijuana from the U.S. As we all know, “reefer” is, to this day, federally illegal in the U.S.

Ten U.S. states have already leapfrogged the feds and made the recreational use of marijuana legal for adults 21 and over. A number of those states border Canada, making them ideal candidates as vendors of imported U.S.-grown cannabis.  

With both U.S. states and Canada hoping to do business, the feds are put in the position of being a kind of anti-middleman.