Organized crime groups like the Hells Angels and the Mafia saw plenty of opportunities after Canada announced it would allow the production of cannabis for medical purposes, according to RCMP intelligence documents obtained by The Star.
“There is no shortage of organized criminal groups who have applied to produce Medical Marihuana (MM)…,” according to a March 2013 police report, titled “Mexican Cartels are Legitimizing their Operations by Taking over Resource Production and Exportation.”
The internal RCMP report also stated that Mexican cocaine cartels were pushing into the mining industry and showing interest in swallowing up Canadian resource businesses.
“Canadian law enforcement should be alert to the degree to which Mexican cartels are consolidating, expanding traditional drug trafficking operations and taking over Mexican resource extraction and exportation because Canadian resource industries may be attractive targets in the cartels efforts to launder illegal profits and legitimize their operations,” the report states.
The report was drafted by the RCMP’s Federal Serious and Organized Crimes section, based in British Columbia.
It came before the then-Conservative federal government changed the rules for medical marijuana on March 31, 2014, allowing Canadians who need the drug to get a doctor’s prescription instead of a licence from Health Canada.
The current Liberal government legalized cannabis sales last October.
Asked whether the force still held the concerns shown in its 2013 report, Sgt. Marie Damien of RCMP headquarters in Ottawa said organized crime “is constantly evolving, increasing in complexity and reach.”
“This situation is not unique to Canada,” she said, adding organized crime groups “will exploit any and all opportunities.”
The report stated the organized crime groups including the Hells Angels, traditional mobsters and Mexican drug cartels showed plenty of interest in Canada’s plan to loosen rules for medical marijuana.
“The RCMP’s initial background check of applicant ventures have turned up significant hits and raised significant alarm bells inside the Federal Policing program,” the report said.
It noted that interest wasn’t just within the Canadian criminal community.
“The Security and intelligence community should be aware that this is a going concern for our organization, not just the domestic vulnerabilities these regulations have created, but the international ones as well,” the report said.
The report also noted that Mexican drug cartels were also becoming more active in the mining industry, and that iron ore represented the prime source of income for the Knights Templar cartel, based in Michoacan, on Mexico’s Pacific coast.
Investigators, “particularly those engaged in enforcement projects involving suspected Mexican cartel members, should be made aware that cartel groups may no longer be only interested in drug and currency smuggling activities and may be focusing on primary resource extraction and shipping industries,” the report said.
“Although Canadian resources industries have a stronger regulatory regime (for mine permit approvals, resource extraction and exportation) and there is less opportunity for large-scale extortion there do exist opportunities for the cartels to use these industries to launder and move cash from Canada to Mexico,” the report stated.
Shortly before the 2014 law changes, the government projected the medical cannabis market could swell to $1.3 billion by 2024, eventually serving 450,000 Canadians.
Before the change, fewer than 40,000 Canadians were legal users of medical marijuana.
Earlier this week, Bill Blair, the minister of border security and organized crime reduction, said Ottawa is pleased with the “orderly” transition to legal pot.
“You would recall the prediction of apocalyptic results,” the former Toronto police chief said, speaking from Washington, where he met with American senators and law enforcement officials about border security issues, organized crime and illicit drug flow.
“We had worked very hard to ensure we had strong regulatory controls in place before the implementation,” he said.
Damien said that combating organized crime is a long-standing priority for the RCMP, which works in collaboration with law enforcement agencies across the country and internationally.
“The RCMP will continue to work with the Government of Canada to ensure, to the extent possible, that appropriate policies and safeguards are in place to prevent organized crime networks from profiting from legal cannabis,” Damian said.
Peter Edwards is a Toronto-based reporter primarily covering crime. Reach him by email at firstname.lastname@example.org