Anyone who holds stock in a Canadian marijuana company, including Tilray (NASDAQ:TLRY), had their nerves rattled on September 14. The nervousness was sparked by news that the U.S. Customs and Border Protection Agency is considering permanently banning Canadians who work or invest in the marijuana sector from entering the U.S. In the wake of this news, I’d wait until after the U.S. midterm elections, scheduled to be held on November 6, before buying Tilray stock on weakness. 

“If you work for the industry, that is grounds for inadmissibility,” Todd Owen, executive assistant commissioner of the U.S. Customs and Border Protection Agency’s Office of Field Operations, told Politico. “We don’t recognize that as a legal business,” he added.

So if you invest in a marijuana company and live in Toronto, you could find yourself permanently banned from entering the U.S.

I’m a Canadian. I can’t stand Donald Trump, but that’s not enough of a reason to stop me from visiting our neighbors to the south. I have friends and family in the U.S. And quite frankly, it’s a fun place to visit and do business.

What Does This Mean for Tilray Stock?

Following this news, Tilray stock price, which has been quite stable since Tilray’s IPO at  $17 in mid-July, will become much more volatile.   

But it’s not as if the lifetime ban is something that came out of left field. In July, Canadian newspapers started to publish articles which warned that such a ban could be enacted.

“In addition to those who have used marijuana, Canadians who are involved with the cannabis economy have been labelled ‘inadmissible’ because they are considered to be living off the profits of the drug trade,” Star Metro Vancouver staff reporter Perrin Grauer wrote  in an article that was published on July 10. “Once banned for life, they must seek legal waivers from an immigration lawyer—good for between one and five years—for the rest of their lives when they wish to cross the border,” Grauer added.

If the ban is enacted, executives like TLRY CEO Brendan Kennedy, who recently appeared on CNBC’s Closing Bell, will have a harder time crossing the border into the U.S.  As a result,  Kennedy will have trouble meeting with institutional investors, industry experts, etc., making it a little more difficult, but not impossible, to tell Tilray’s story, which is a good one.

On a positive note, however,I don’t believe that TLRY has any operations in the U.S. As a result, its Canadian employees do not have an urgent need to travel to the U.S.

The Real Opportunity 

I’ve been saying for some time that the real opportunity in the cannabis industry isn’t the plant itself, which I expect to become a commodity much like sugar, but rather the products that are created from it, such as edibles and cannabis-infused drinks.

Kennedy, the CEO of TLRY, agrees with me.

“While at first look, you might want to judge companies in the industry based on agriculture or growing a commodity product, that’s really not what the industry is going to look like five years from now,” Kennedy said during his CNBC appearance. “People will drink cannabis instead of a beer … they may eat a product in the form of a chocolate bar or an edible, or consume a pill.”

That’s why I’ve been very bullish about Constellation Brands (NYSE:STZ), whose multi-billion-dollar investment in Canopy Growth (NYSE:CGC) should pay big dividends for shareholders five to ten years from now. Canopy Growth has created a variety of products, including dried flowers and oils, that incorporate cannabis.  

“The best part [of Constellation’s investment] is that it’s going to make cannabis-infused drinks using Canopy Growth’s expertise,” I wrote on July 5. “As states come online and legalize recreational marijuana use, Constellation gains a new market to sell into,” I noted.

The Bottom Line on Tilray Stock

Many likely already felt that Tilray stock price was wildly inflated before Politico published its article. If the price of Tilray stock falls $20 in the next day or two, I doubt whether their opinions about Tilray stock will change.

But if the Democrats take back the U.S. House or Senate on November 6, there’s a good chance they will attempt to prevent the U.S. Customs and Border Protection Agency from implementing the ban on Canadians who participate in the marijuana sector. After all, the ban is nothing more than a silly abuse of power, given how many states have already legalized marijuana use.

In the meantime, I’d buy STZ stock, so you can profit from the marijuana legalization trend without having to worry much about the potential Canadian ban.

As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.