Can the Weed Industry Grow Up Without Growing Corporate?

By Zak Stone

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Can the Weed Industry Grow Up Without Growing Corporate?: Zuma Press Inc/Alamy

Zuma Press Inc/Alamy

The legalization movement’s entrepreneurial arm is taking its quest for normalcy to the next level as it begins to push for influence in the U.S. city where norms are defined: Washington, D.C. Playing by the rules of any other trade group, the three-year-old National Cannabis Industry Association just hired its first full-time lobbyist, who spent years on The Hill pedaling influence for notoriously conservative organizations like the American Legislative Exchange Council (which modeled legislation for “Stand Your Ground” and voter-identification laws) and who won’t say whether or not he thinks weed should be legal.

This means that, more or less, the NCIA’s time and resources will be increasingly spent talking to powerful people about tax laws and banking regulations that hurt its industry. Only in marijuana’s case it’s more like basic rights: changing the tax code to allow pot businesses to deduct expenses or convincing banks to let them open bank accounts (which a February announcement by the Obama administration shows is not far off).

To better understand how such lobbying efforts will translate into actual policy changes—and if they do, whether that means corporate “Big Pot” is next—last week I caught up with NCIA co-founder Aaron Smith.

PLAYBOY: How does somebody help establish the marijuana industry’s first national trade group?

SMITH: I’ve been working in the marijuana-reform movement for about 10 years. I started working with the Marijuana Policy Project—an advocacy group that has helped on many of the reforms you’ve seen in the last decade—as its California lobbyist and a grassroots organizer. After Obama took office, we started seeing the market develop into what looked more like a professional industry—first in California and then in Colorado. There was this new constituency of business professionals and investors that needed representation in Washington to help on issues that affect their day-to-day lives, like tax deductions and banking.

PLAYBOY: You spend much of your time in Denver, where the NCIA is based. Have you experienced moments in Colorado that wouldn’t have happened before January 1, when recreational marijuana became legal?

SMITH: I hate to say this, but it’s more boring than you think. Nothing crazy is happening out there except that people are buying a product. At this point, almost everybody in Colorado probably knows somebody who works in the industry—whether it’s somebody in the cultivation facilities or in retail—and so it’s become an integral part of the state’s economy.

PLAYBOY: But how does it change the dynamic of the War on Drugs? Is there anything noticeably different in Colorado?

SMITH: The last poll I saw, something like 80 percent of Americans thought that the War on Marijuana had failed, and the majority of those people think that we need new direction. Colorado is showing that new direction and proving as a model what the rest of the country could follow as an exit plan out of a failed policy of prohibition. Law enforcement has shifted away from busting mostly minorities and young people for possession to focusing resources on public consumption and driving under the influence of marijuana, which are still illegal in Colorado.

PLAYBOY: In California, it’s been difficult to get local law enforcement to stop busting dispensaries, one of the reasons being that the money and resources that they seize in those busts is significant. How do you convince local communities that it’s in their best interest to regulate dispensaries rather than make money by busting them?

SMITH: It’s pretty simple for voters and taxpayers to understand why it makes more sense to allow the businesses to operate and have a consistent tax revenue stream as opposed to seizing the properties once. Just look at the Harborside Health Center in Oakland, which is fighting one of the country’s highest-profile asset-forfeiture cases in medical marijuana. The City of Oakland now has joined a suit with Harborside against the federal government. It knows that closing Harborside will not only hurt the patients in the city and the people who work there, but Oakland as a whole because Harborside is paying millions of dollars in taxes and licensing fees.

PLAYBOY: What kind of interest do the country’s biggest corporations have in the multi-billion dollar weed industry? Are places like WalMart and Big Tobacco companies like Philip Morris eying this market?

SMITH: I don’t know about WalMart. I’m sure they’re keeping an eye on it, but at this point, I would imagine they’re being pretty cautious. As long as cannabis is still illegal under federal law, we won’t see larger multi-national corporations risking everything they have to sell cannabis. Down the road, we might be in a position where larger companies move into the space, and that’s part of what NCIA is doing: helping to lay the groundwork for the culture of this industry so that it doesn’t evolve into something that looks like Big Tobacco, Big Pharma or Big Alcohol.

PLAYBOY: How does an industry grow without moving in that direction?

SMITH: Ironically, as a result of prohibition, we’re well positioned to become a different kind of industry that has values rooted in responsibility, compassion, social justice and transparency. Those certainly are values that we instill within the industry through our educational events—in newcomers as well as existing operators. Just because it’s a profitable industry, doesn’t mean it has to act like every other industry.

PLAYBOY: Many people who are now working in the industry legally come from law-breaking backgrounds. What kind of unique challenges does that create for the industry?

SMITH: If there’s a challenge, folks end up getting into partnerships with either consultancy firms or business partners who have a lot of experience with regulatory compliance—so you see partnerships forming between someone with business experience and people who have been cultivating cannabis for decades. Of course, at one point they were breaking the law, because the laws were morally unconscionable.

PLAYBOY: What kind of change in usage can we expect from more liberal laws? Will more people smoke marijuana?

SMITH: I think it’ll be negligible. U.S. government data shows that teen use has actually gone down in states with medical-marijuana laws at a rate faster than it’s decreased in other states. Somebody with a regulated business isn’t likely to sell to minors because they’ll lose their license. A drug dealer doesn’t care about such things. Among adults, usage will probably stay about the same. If it goes up a little bit, I think that’s only because it will replace alcohol use—a benefit to society because alcohol is causing far more deaths than marijuana, in traffic tallies, violence and sexual assault.

PLAYBOY: What kind of major legal changes can we expect to see in the next couple years?

SMITH: We’re going to see more states—Oregon, California, Nevada, Alaska—follow the lead of Colorado and Washington. And we’re going to see more states moving into medical cannabis, like Florida and, hopefully, New York. These are big states with a large constituency. When people see the marijuana industry up close and personal, they see that it’s actually a benefit to the community. This not only drives public opinion but also brings along the support of the congressional delegations representing those states.

PLAYBOY: Obama has openly discussed his youthful pot smoking. Are any politically leaders willing to admit at this point that they actively use marijuana?

SMITH: We’re not at that point yet. Given that it’s federally illegal, we can’t blame them. But that’s not really the issue. It doesn’t matter if people in positions of power use marijuana or not. We saw that with the prohibition of alcohol, which was a bad public policy for this country. It didn’t require a bunch of drunks to overturn it.


The High Road is a bi-weekly exploration of America’s rapidly changing relationship with weed.

Zak Stone is the Playboy Sex and Culture editor based in Los Angeles. Follow him on Twitter @_zs.

This article was originally published on Kinja on April 7, 2014


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