Earlier this year, I was speculating about a NAFTA Chapter 11 claim against a U.S. tax provision that had an impact on marijuana businesses, and more generally I've been wondering about ISDS challenges to marijuana regulation. I thought the first such claim -- or rather, the intent to file such a claim -- might be a ways off, but apparently it has arrived sooner than I expected, as explained by Investment Arbitration Reporter:
Several U.S. nationals have served Canada with a formal Notice of Intent (click to download) under Chapter 11 of the North American Free Trade Agreement (NAFTA).
The would-be claimants allege that Canada breached the non-discrimination and minimum standards of protection provisions of the NAFTA when the country’s health regulatory authorities denied a license for a medical marijuana production facility in the province of Ontario.
The company CEN Biotech Inc. and its co-claimants profess to have suffered a whopping $4.8 billion (US) in damages. The calculations underlying this figure are not discussed in the Notice, but would seem to encompass projected future profits for a marijuana production business that never went into production.
I'm not sure how far this particular case will go, but we may see more of these as marijuana becomes more widely legalized and regulated.
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