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[three_fifth]The DEA is threatening to investigate Americans who invest in medical marijuana north of the border.

Agency spokesman Rusty Payne said in October that DEA agents are “most interested in those types of activities.” It’s not clear whether any of the investors have broken the law, but some experts say investment in Canadian medical marijuana could be a violation of the U.S. Controlled Substances Act.

DEA BadgeBecause the investors typically send their money through banking institutions, the U.S. government could also treat their activities as money laundering, experts say.

The DEA has already been keeping track of investments within the two states that legalized cannabis in 2012, Colorado and Washington. No one has yet been prosecuted for giving money to a legal pot business, but the DEA likes to dangle the threat as a reminder of its power.

Canadian medical marijuana stocks plummeted after Payne’s announcement. OrganiGram Holdings Inc. lost 6.9 percent of its value. Bedrocan lost 4.2 percent, while Tweed Marijuana Inc. dropped by 2.8 percent.

The Canadian medical weed market has increasingly drawn the attention of eager American investors who are betting that reform will spread in coming years.

“We really like the Canadian model, which is really unlike any other in the world,” said Christian Groh, co-founder of Privateer Holdings of Seattle, a major participant in medical marijuana. “What we’re doing here does not violate local, state and federal law (in Canada).”

The Canadian medical weed market is especially appealing to investors because it’s the best developed program of its kind in the world. More than half of U.S. states now allow medical weed, as do parts of Europe, but those systems are still in their infancy.

Canadian courts legalized medical cannabis in 2000, overruling a Parliament that wanted to ban it. The current Conservative government in Ottawa has tried to roll back court decrees, to little success.

Marijuana Canadian FlagA former agent with the DEA told Reuters that “at best” the investments are “an extremely reckless thing to do.” The agent said investors could be charged with money laundering and any returns “would have the taint of drug proceeds.”

“If they sought legal advice on this, they were grossly underserved,” the former agent said.

Timothy White, a national expert on banking law, said U.S. investors who send MMJ money to Canada could be guilty of drug trafficking and money laundering.

“That is two violations of U.S. federal law. I don’t see there is any way around that,” White said.

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About the Author: Matt Brooks

Matt is a journalist from San Francisco who has specialized in marijuana policy for more than six years.

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