Strong Canadian dollar said hurting pot exports

By Allan Dowd

VANCOUVER, British Columbia (Reuters) - The strong Canadian dollar has hit the illegal marijuana sector just as it has other industries that export to the United States, one of Canada's best known legalization advocates said on Thursday.

But western marijuana growers have also benefited from Canada's strong economy, especially the booming Alberta oil patch, which has increased domestic consumption, according to Marc Emery, a founder of the British Columbia Marijuana Party.

The Canadian dollar touched parity with the U.S. dollar last week, topping a rise of some 60 percent over the past five years. On Thursday, it was still hovering around par, at C$1.0014 to the U.S. dollar or 99.86 U.S. cents.

A stronger loonie -- so called for the bird engraved on the one dollar coin -- has cut the profit of selling potent "B.C. Bud" marijuana in U.S. markets at a time when producers in Canada struggle with tighter border security and competition in the United States with pot from other sources.

Top quality Canadian pot is selling for $3,500 (1,725 pounds) a pound in the United States, compared with C$2,400 (1,180 pounds) in domestic markets, according to Emery, who is also editor of Cannabis Culture magazine and fighting extradition to the United States.

"When you factor in all the risk and transportation, that (higher export price) is not a big deal any more," said Emery, adding that when the Canadian dollar was weak exporters could double their money selling into the United States.

U.S. authorities seized 26,414 kilograms (58,233 pounds) of marijuana in northern border states in 2005 compared with 11,546 kg (25,455 pounds) in 2001, according to the U.S. Drug Enforcement Administration's latest National Drug Threat Assessment.

A study in 2004 estimated the street value of British Columbia's annual marijuana crop at more than C$7 billion, which would make it one of the western Canadian province's largest industries.