Senate aims to stymie criminals using tax havens to infiltrate legal pot market

The Senate wants to ensure that organized crime doesn't use offshore tax havens to wind up secretly controlling the recreational marijuana market in Canada once cannabis is legalized.

Senators voted 45-29 on Tuesday to amend the Liberal government's cannabis legalization bill to require that any company licensed to grow marijuana must publicly disclose all its shareholders or executive members who are not based in Canada.

They also approved, by a close vote of 39-36, another amendment that would specify that police who seize cannabis plants don't have to keep them alive.

That brings to 43 the number of amendments the Senate has so far approved to Bill C-45. And there are likely to be more before the bill is put to final vote in the upper house on Thursday.

Tuesday's amendment on tax havens was proposed by Conservative Sen. Claude Carignan and garnered considerable support among Liberal independents and independent senators.

Liberal independent Sen. Serge Joyal said police have confirmed that organized crime has already infiltrated the medical marijuana market in Canada.

He pointed to the fact that 35 of 86 licensed producers are financed in part by unknown investors using tax havens to keep their identities secret.

Joyal said more than $250 million has been invested in Canadian cannabis companies from the Cayman Islands alone.

Maintaining live plants

The amendment that would allow police to destroy seized marijuana plants was proposed by Conservative Sen. Vern White, a former Ottawa police chief. White argued that the way the bill was originally drafted, police feared they'd wind up having to build greenhouses to maintain live plants.

"It's not feasible, practical or necessary," White said, arguing that the cost of maintaining live plants would be exorbitant.

White said his amendment would allow police to destroy seized plants, keeping only that evidence, including photographs, needed in court just as they do now.

Liberal independent Sen. Art Eggleton countered that the amendment itself is unnecessary, since C-45 already allows for the destruction of seized plants, provided that police report their intention to the minister.

Tuesday's amendments are on top of the 40 amendments senators approved last week in accepting the report of the Senate's social affairs committee. The most significant of those would allow provincial and territorial governments to prohibit the home cultivation of marijuana plants, if they so choose. The bill, as originally drafted, would allow up to four plants per dwelling.

In addition, senators last week approved another amendment that would tighten already stringent advertising restrictions on cannabis companies, preventing them from promoting their brands on so-called swag, such as T-shirts and ball caps.