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The Bernanke Dollar’s Latest Victim: The Kind Northern Bud Trade

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We’ve been accused of being obsessed with vice, and, to be honest, we’re not entirely uncomfortable with the charge. Indeed, we often suspect that our mixed-up age has entirely reversed the proper ordering of values, so that virtues are branded vices and vices, virtues. Aristotle would not be happy, and neither would the bartenders at Tom & Jerry’s or Spring Lounge, our local watering holes.
So we found ourselves disturbed this morning to learn that the dissolution of the dollar’s value was destroying one of our Northern neighbors export markets—namely, the market in exporting marijuana to eager tokers the United States. The trade flourished for years as black marketeers pocketed the profit from arbitraging the dollar against loonie. Canadian marijuana production costs were paid in Canadian dollars, while profits were taken in dollars.
As the dollar has deteriorated against the loonie, the trade has dried up. Canadian production costs have held steady, while the buying power of the dollar has declined. And, lest you think we’re talking about a small thing, we remind you that the production and export of marijuana is a major contributor to the economy of British Columbia.
“The upshot is that the Canadian marijuana is now less competitive against marijuana grown elsewhere,” Stephen Easton, professor of economics at Simon Fraser University in Vancouver, B.C. has told the grand newspaper of Big Sky territory, the Missoulian. “This is a cost-driven business. With exports no longer viable, the British Columbia marijuana industry has certainly taken a hit, so to speak.”
This comes hot on the heels of news of the death of the Montreal stripper trade. In happier times, Canadian strippers would come to New York to ply their trade for a few months—typically the winter months—before returning home to spend the more valuable US dollars. And their US fans—not a few of whom ply their own trade on Wall Street—could pursue them further in the northern climes, confident their dollars would purchase more attention in Canada then it could at, say, Scores in New York City. That bilateral trade is now done as well.
If Bear Stearns had not decided that DealBreaker is too frightening for the delicate constitutions of its employees—those fragile bond traders—we’d end this item with a missive to Jimmy Cayne, who we have reason to believe might have some sympathy with us on this issue. Maybe one of Cayne’s golf buddies can get him the message.
(And, on a side note, we apologize for our late start this morning. On learning this news we contacted some of our local underworld barons to ask them whether the decline of the dollar was hitting the black market south of the border, as well. But now we’ve totally forgotten what was said during that conversation.)
U.S. dollar deterring Canadian marijuana smugglers [The Missoulian]