Big business?

Is legal weed doomed to be run by big business?

Pro-marijuana advocates have become surprising foes of some efforts to legalize. Here’s why.

By Mary Jane Gibson

Last October, when President Biden announced that he would take steps to overhaul America’s marijuana laws and pardon those convicted of simple marijuana possession at the federal level, it seemed on the surface as though the pendulum were finally swinging in the direction that cannabis legalization advocates had been wanting for decades.

It didn’t take long for critics to quickly point out, however, that Biden’s call to review the classification of cannabis — currently a Schedule 1 illegal drug with no medical uses, on par with heroin and LSD — contained one glaring pitfall for those who support legalization: According to advocates, declassifying marijuana completely is the only path forward for a legal cannabis marketplace. Reclassifying, or simply downgrading marijuana to Schedule 2, 3, or 4? That would put cannabis on the level of such drugs as oxycodone or ketamine or Valium — and topple any hope for recreational sales.

It has been a tumultuous year for cannabis policy reform in America, with conflicting interests warring over one of the fastest-growing industries in the US. Legal sales of marijuana were expected to top $33 billion by the end of 2022, largely driven by new, adult-use markets in several states, yet cannabis remains illegal under federal law, and thousands of people are still in prison for marijuana-related offenses.

Against this backdrop, one surprising trend is emerging: push and pull among pro-cannabis advocates who say that legalization may not be the right move after all — or at least not the way it’s shaping up. Their concern? Who will actually benefit from a federally regulated industry.

If cannabis is rescheduled under the Controlled Substances Act, regulating marijuana as medicine, it might, advocates worry, allow Big Pharma to control the market. And if it’s legalized at a federal level, some also fear that conglomerates like Amazon could quickly dominate a national adult-use marijuana industry.

Some activists have already begun to attempt to slow, or stop, legalization legislation, as recently as the midterm elections in November. Progressive cannabis advocates opposed Arkansas’s legalization measure, Issue 4, which was funded mainly by the medical cannabis industry, claiming that it would have allowed existing medical marijuana businesses to control the adult-use market and rewarded industry backers of the measure by limiting new competitors.

Critics also highlighted the measure’s lack of social equity provisions, intended to ensure that people of color, and those with convictions for marijuana offenses, would be afforded an opportunity to participate in the legal industry. Issue 4 would not have expunged records for past cannabis offenses, instead funneling a percentage of tax proceeds to law enforcement.

In the end, even though one survey showed that most Arkansas voters favored legalization in September, 56 percent voted against the measure on Election Day.

“I’m pro-regulation,” Tyler McFadden, a board member of the cannabis reform group BOWL PAC and former political associate with the National Organization for the Reform of Marijuana Laws, told Vox. “It’s a safety issue. However, when regulation comes down to who can make money, that presents a problem.”

McFadden says she believes that rescheduling marijuana under federal law would pad the coffers of drug companies while doing nothing to address the harms that decades of prohibition have caused, largely to people and communities of color through disproportionate and discriminatory enforcement of drug laws. “Rescheduling only puts money into the already wealthy people’s pockets — people who have never had to deal with incarceration or aggressive policing,” she says. “The advocacy community is solid: It has to be descheduled.”

Artist and activist Brian Box Brown is the creator of Legalization Nation, a comic strip aimed at educating people about the complexities of the emerging legal cannabis industry. One strip begins with a panel that says, “The legalization of cannabis offers us a front-row seat […] to see a market be monopolized.”

Caps on cannabis business licenses like the one proposed by Arkansas lawmakers are growing in popularity and limit entry to the few who are able to secure expensive permits, ceding the lion’s share of the cannabis industry to large companies and multi-state operators, Brown and others say. He says it’s easy to understand why some pro-cannabis factions are also anti-legalization. “When a bill like that gets passed, there have to be years of reform to allow the market to open up to small businesses. I think that’s the pushback: We know the outcome. I want legalization, but not this type.”

Reformers also resent some medical multi-state operators’ position that marijuana is a dangerous drug and should be heavily controlled, says Brown. “MSOs want cannabis to be legalized, but they use the stigma surrounding it to create monopolistic markets. Legislators will say, ‘We need to regulate this heavily, and limit it to these six people who know what they’re doing.’ Cannabis corporations use that to their advantage.”

It’s been nearly a decade since the first time a majority of Americans supported legalizing cannabis. Support has since grown in nearly all corners; according to an April 2021 Pew Research Center survey, 88 percent of US adults favor some form of legalization. Twenty-one states now have legal recreational marijuana, and with Biden’s announcement, it appears that it’s only a matter of time before the federal government repeals marijuana prohibition (though there are myriad matters to be hammered out, from banking regulations to which agencies should regulate cannabis to whether automatic expungements ought to be included).

In practice, cannabis legalization has proven piecemeal and sometimes disappointing for pro-pot reformers. McFadden points to Virginia’s nascent legalization program as one cautionary tale. Just four cannabis companies are licensed to serve the state; all four are owned by out-of-state conglomerates. Small businesses and local entrepreneurs are mostly shut out from participating in the industry. “In my opinion, Virginia really screwed up, because [the law] is very specific to corporate interests,” McFadden says.

In addition to the Safe and Fair Enforcement (SAFE) Banking Act — which was excluded from the most recent congressional spending bill, to cannabis advocates’ dismay — several pieces of legislation are being pushed forward in the hope that a bipartisan effort will legalize cannabis at a federal level in the next few years. The most recent bill under consideration, the Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment (PREPARE) Act, directs the attorney general to develop a regulatory framework for when the federal government legalizes marijuana.

In 2021, Amazon announced its support for federal marijuana legalization and an end to drug testing of its employees for cannabis. Reform advocates celebrated the policy, but it also raised questions about whether the company will move to dominate the industry as soon as cannabis is legal under federal law. (A representative for the company told the Washington Post early this year that selling cannabis is not the company’s goal, and that its interest in cannabis legalization is to help broaden its hiring pool.)

If the federal government legalizes cannabis, lawmakers should beware of monopolization by national corporations, says Shaleen Title, chief executive of the cannabis policy think tank Parabola Center. Title authored a paper on preventing monopolies in the marijuana market, outlining how domination by big business is a threat to the existing cannabis industry. She writes that “the recent wave of market consolidation and high barriers to entry for smaller actors foreshadow a future national market controlled by only a handful of companies.”

Title cautions that tobacco and alcohol companies are quietly laying the groundwork with the hope of controlling the legal cannabis market. Take, for example, the nonprofit Coalition for Cannabis Policy, Education, and Regulation (CPEAR), whose aim is to “advance a comprehensive federal regulatory framework for cannabis.” That group is funded by several tobacco and alcohol brands, including Altria, the parent company of Philip Morris USA; the Molson Coors Beverage Company; Constellation Brands, the conglomerate behind Corona and Modelo; and the National Association of Convenience Stores, among others. The coalition is led by respected experts from the cannabis industry, including executive director Andrew Freedman, Colorado’s former cannabis czar, and senior adviser Shanita Penny, a former president of the Minority Cannabis Business Association.

The combination of funding from tobacco and alcohol companies and the coalition’s roster of influential policy experts from the cannabis space has some industry watchdogs concerned about the effect the group could have in favor of big business. Studies show that the tobacco industry has a history of targeting young smokers and marginalized communities, especially Black communities. If Big Tobacco influences federal cannabis policy, it would be a doomsday scenario for marijuana reform advocates concerned with issues like harm reduction, Title says. Tobacco companies “lie to the public, manipulate research, and hide the harms of their products. We do not want them in charge of public health.”

Despite concerns that federal legalization could end up going badly if corporate interests prevail, Brown says he believes that reformers should feel encouraged to move full speed ahead while learning from failures to address social equity and criminal justice reforms at the state level. “As long as [we] have the proper vision for what legalization should be, it should be less difficult to create an equitable market,” he says. He points to Canada as a possible road map for federal regulation in the US. “They’ve run into every problem that we’re talking about,” Brown says. “But it seems like there’s no communication with Canadian legislators, and almost no communication from state to state.”

McFadden says that reform advocates will continue to press forward no matter what. “I don’t think any legislation that is seriously up for debate right now is a step in the wrong direction,” she says. “We don’t begrudge anyone who’s cautious about federal movement. It’s a matter of making sure that we’re taking steps on the right path. There are thousands of people locked up right now for small amounts of possession or distribution or paraphernalia. Those people need to be at home with their families, contributing to our economy, and living their lives without having to deal with the specter of a criminal record, the collateral consequences of which effectively make people live a life that they might not have envisioned and that they don’t deserve. We’re focusing on moving forward because we need to get these expungements through.”

“We’re taking steps every day to a better future,” McFadden continues. “It might not be tomorrow, it might not even be next year, but as long as we’re doing something about it now, we’ll reach it faster than we would if we stand here twiddling our thumbs, waiting for something to happen without doing anything about it.”

Brown argues that lawmakers can craft effective cannabis policies, particularly when they listen to activists rather than lobbyists and special interest groups. “We need to recognize the things that are working and stop catering to corporate wishes. This is a brand new industry. It will probably be corrupted in time — but we don’t have to start with corruption.”