Capitalism vs Marijuana

The Canadian dollar retreated back below $1.02 US on Thursday as investors continued to bail out of the Loonie. That’s its lowest close since Oct. 4, according to Bank of Canada data.  The Loonie has now given up almost nine cents US since it peaked at a modern-day high of $1.1030 US on Nov. 7.  

 Yet, Loonie still hits 30-year high.   








  

With a strong Loonie in my pocket, I could possibly get 10 to 30% cheaper goods across the border. It is also obvious that Canadian importers enjoy the strong Canadian dollars. But in the other side of strong Loonie, it also harms on the Canadian economy. Suddenly, it’s far more expensive to buy Canadian goods or sightseeing around Vancouver for our American friends. 

Who else got hit by strong loonie? According to this article via Foreign policy, it’s B.C’s marijuana growers.

 

With weak USD or strong loonie, it’s far more expensive to buy “the world’s best pot” and smuggling profits disappear.  This means that the backpacks of cash that regularly cross the Canadian border to buy pot have declined in purchasing power and it’s no longer worth the risks and costs for many smugglers. This is bad news for Canadian growers, who ship about 90 percent of their crop to the United States, as well as for their customers in the United States, who now have to pay a lot more or buy elsewhere.

“It’s very simple,” said Stephen Easton, professor of economics at Simon Fraser University in Vancouver, B.C. …“The upshot is that the Canadian marijuana is now less competitive against marijuana grown elsewhere,” Easton said.

“This is a cost-driven business. With exports no longer viable, the British Columbia marijuana industry has certainly taken a hit, so to speak.”

FP concludes that the big winners from all this are Mexican marijuana growers, who will likely step in to fill the gap (the peso is struggling as well), and Econ 101 professors at U.S. liberal arts colleges, whose students will soon be clamoring for answers.

Is it?  Middlemiss who owns the Holy Smoke Culture Shop and Psyche-Deli in Nelson, B.C saying that

 “They’re all about quantity down there, We’re about the quality.”

Anyhow, The financial tables have turned, and global economics have done what U.S. law enforcement could not:  Seems like Capitalism has stopped the smugglers in their tracks.

The power of capitalism!  

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