Canadian agency investigates 5,000 suspicious transaction reports linked to ‘thriving’ illegal cannabis industry

After examining nearly 5,000 suspicious transaction reports, a recent government report warned banks, law enforcement, and security agencies to look for suspicious activity related to the “thriving” illegal cannabis industry. did.

“Despite the introduction of cannabis laws, unlicensed activities related to cannabis continue,” September 2022 report “Operational Warning: Laundering of Illegal Cannabis Proceeds.”

2021 study According to the government, 37% of cannabis users surveyed say they continue to obtain cannabis from illegal or unlicensed sources. The study found that consumers spent between $33 and $83 to get cannabis from legal sources this past month, versus $19 to get cannabis from illegal sources. I’m spending $37 from

“Even though more consumers report getting their cannabis from legal sources each year, there is still a thriving illegal cannabis market in Canada. The growing market contributes to an increased risk of harm to Canada’s financial system and its citizens through significant losses in tax revenue and increased funding of criminal activities by organized crime groups,” 2022 report. the book says.

This report is from the Financial Transactions and Reports Analysis Center of Canada (FINTRAC), Canada’s financial intelligence agency. We analyzed approximately 5,000 suspicious transaction reports (STRs) related to illegal cannabis activity from March 2020 to March 2021.

FINTRAC is a legal entity that protects cryptocurrencies, “designees” (persons who open accounts and trade on behalf of those who seek to conceal their financial records), front companies owned by illegal cannabis distributors and producers, and related funds between accounts.

“A wide range of companies were used as front companies to launder the proceeds of illegal cannabis businesses,” the report said. Examples of e-commerce businesses in the beauty and wellness industry, wholesale food and beverages, automobile-related businesses, electronics repair businesses, marketing, advertising and consulting, and construction-related businesses were given.

“Accounts held by these fronts often had little or no business-related transactions,” the report said. “Many of these individuals owned multiple businesses and were transferring funds between business accounts, personal accounts, and accounts of related parties without a clear purpose.”

Cannabis laws overhauled

A September 2022 press release The Canadian government says there is an upcoming legislative review of cannabis laws that will examine “progress made in deterring criminal activity and replacing the illicit cannabis market.”

The Cannabis Act, which sets out the rules for the legal cannabis industry, came into force four years ago on October 17, 2018.

Blacklock’s Reporter said a 2017 Access to Information memo predicted that “the full transition to new markets will take time” before licensed retailers can compete with drug dealers. said.

“It will take time for the new legal cannabis industry to really grow,” the memo said. Noting the opening of legal cannabis markets in Colorado and Washington, he said it took four years before legal markets “were able to replace a significant portion of the illegal market.”

Blacklock’s Reporter contributed to this report.

David Wagner


David Wagner is a reporter for the Epoch Times based in Winnipeg.