Cannabis harvested at the CannTrust Niagara Greenhouse Facility in Fenwick, Ont., is photographed on Tuesday, June 26, 2018. An internal government memo says federal officials see no “strong pull factors” for organized crime groups to invest in the legal cannabis sector over any other industry, despite allegations shady money is already tainting the business. THE CANADIAN PRESS/ Tijana Martin

Legal cannabis holds no special attraction for organized crime: memos

Public-safety and health officials do not see strong pull factors for criminal infiltration of the legal business

Federal officials see no reason why organized crime would invest in legal cannabis over any other industry, despite allegations shady money is already tainting the business, an internal government memo says.

Organized crime has dominated the illegal cannabis industry for decades but public-safety and health officials do not see “strong pull factors” for criminal infiltration of the legal business, the memo says. And they appear confident that existing and planned efforts to ensure corporate transparency will reveal any trouble.

The documents, disclosed through the Access to Information Act, show officials from nine federal agencies became seized with the issue early this year after media reports said questionable foreign money was supporting legal marijuana enterprises.

RELATED: B.C. privacy watchdog issues guidelines for legal cannabis sales

Using offshore bank accounts for investing is not illegal, nor was there evidence such sources were being used by organized crime to profit from the legal cannabis sector, the internal notes say.

The Trudeau government recently legalized recreational cannabis use with the aim of denying criminals hefty profits from the illicit pot trade. The government has overseen licensing of medicinal marijuana suppliers for years.

The February memos say the legal industry’s ability to raise capital should be seen as a positive sign, as long as the money comes from legitimate sources.

“The potential for organized crime to invest in the legal cannabis market through offshore tax havens exists, but does not appear fundamentally different from the potential for such investments in any and all sectors of the economy,” says a memo to the Public Safety Canada deputy minister, the ministry’s senior bureaucrat. “Given the government’s stated objective to strictly regulate the cannabis industry, there does not appear on the surface to be any strong pull factors for organized crime to invest in this sector, as compared to any other sectors.”

The RCMP had no active high-priority investigation related to organized crime’s suspected financial involvement with licensed pot producers, though the police force continued to monitor the situation, the Feb. 27 memo adds.

RELATED: B.C. pot shop handed first recreational licence

The French-language CBC’s flagship investigative program, Enquete, reported this month that the government had granted marijuana licences to companies and people with links to the criminal underworld.

Organized Crime Reduction Minister Bill Blair said Tuesday he has not seen evidence of any criminal enterprise infiltrating a licensed producer. “And should I see any evidence of that I am very confident that the RCMP and Health Canada would take all the steps necessary to protect Canadians,” he said during an appearance at the Senate’s question period.

The government is being “a little bit naive on the issue” of criminal involvement, Conservative Sen. Claude Carignan said in an interview.

Earlier this year, the Liberals cited privacy concerns and other challenges in rejecting a legislative amendment backed by Carignan that would have created a public registry of marijuana-company investors.

Blair said Tuesday the cannabis regulations that did come into effect “provide for significant financial transparency.”

The internal memos also note various federal efforts to screen foreign investments, fight international tax evasion and make it clearer who owns stakes in Canadian corporations. In addition, federal, provincial and territorial finance ministers have agreed to work together on making ownership data more accessible.

“This will help law enforcement and other authorities know who owns which companies in Canada, including companies who invest in cannabis production,” say the internal government notes.

Carignan said he is skeptical the government is actually peeling back the layers of secrecy. “This government is talking about transparency but it is one of the most opaque that we have seen.”

Jim Bronskill, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Hub International to close Bella Coola office March 28

Company says staff shortages to blame

Dry weather leads to historic low water levels in local rivers

The prolonged cold, coupled with the lack of precipitation, has contributed to the situation

Bella Coola businesses still eligible for Wildfire Business Transition Training Program

Small businesses are eligible to apply for reimbursement of training expenses up to $10,000

Bill passes to make Sept. 30 National Day for Truth and Reconciliation statutory holiday

Residential school survivor Phyllis Webstad and CRD Area F director Joan Sorley were in Ottawa for the vote

Wally Webber elected to fourth term as Nuxalk Chief Councilor

Webber took the win with 174 votes out of a total of 389

The good, bad and the unknown of Apple’s new services

The announcements lacked some key details, such as pricing of the TV service

Military officer accused of sexual misconduct, drunkenness in B.C., Alberta

Warrant Officer Jarvis Kevin Malone is charged under the National Defence Act

Stranger climbs onto B.C. family’s second-floor balcony, lights fire in barbecue

Incident in Abbotsford terrifies family with two-year-old boy

Harbour Air to convert to all-electric seaplanes

Seaplane company to modify fleet with a 750-horsepower electric motor

Sailings cancelled after BC Ferries boat hits Langdale terminal

The Queen of Surrey is stuck on the dock, causing delays to Horseshoe Bay trips

Eviction halted for B.C. woman deemed ‘too young’ for seniors’ home

Zoe Nagler, 46, had been given notice after living in the seniors complex in Comox for six years

Vancouver Island home to B.C.’s luckiest lotto store

Five million-dollar winners have bought tickets from same Port Alberni corner store

Video of ‘shocking, chilling execution’ opens B.C. murder hearing

Sentencing underway for Brandon Woody after pleading guilty to second-degree murder in Nanaimo

Is it a homicide? B.C. woman dies in hospital, seven months after being shot

Stepfather think Chilliwack case should now be a homicide, but IHIT has not confirmed anything

Most Read