This is the second piece in Cannabis Wire’s series, Cannabis Goes to Washington. You can read the Introduction here and Part I here.
Mike Correia has been lobbying on behalf of the National Cannabis Industry Association, known as NCIA, for the past half decade. The Association formed in 2010 and is the nation’s largest industry advocacy group, with just under 2,000 dues paying members. But the Association might no longer be the most influential industry voice in Congress.
Correia told Cannabis Wire that it wasn’t long ago when he could count on one hand the number of lobbyists working on cannabis.
“I’ll be honest with you, I can’t keep up with some of the lobbyists that are now showing up from individual companies,” Correia said. And with new faces and interests lobbying for cannabis, he said, it can feel like people working on islands. “They represent their clients and they don’t want to be part of the larger network of some of the advocacy groups, and some of the circles that we’re in.”
Correia noted that the industry is still in its “infancy.” Still, money spent on cannabis lobbying overall shows a sharp upswing: In 2011, NCIA and the Marijuana Policy Project (MPP), and the Colorado-focused Medical Marijuana Industry Group spent $43,000 on lobbying the House and Senate. Over the next few years, the amount spent on lobbying surged: In 2015, NCIA and MPP spent $540,000. In 2016, they spent $780,000. Over the years, those lobbying dollars went toward a wide range of cannabis-related issues, from veterans’ access to research expansion.
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Then, with the establishment of the New Federalism Fund (NFF) in 2017, came a new approach to cannabis in Congress. The powerhouse lobbying group—it could be considered more of a trio, considering the fund is backed primarily by LivWell, Privateer Holdings, & Scotts Miracle-Gro, according to federal disclosures—pumped an unprecedented amount of money primarily toward a single business concern: a repeal of 280E, the part of the tax code that prohibits cannabis businesses from deducting expenses from federal taxes. In 2017, NFF spent $987,000 on lobbying, dwarfing NCIA’s total by $426,000.
So far this year, MPP and NCIA have spent approximately $835,000 on federal lobbying and $114,500 on direct donations to candidates and their PACs, split almost evenly between Republicans and Democrats. (Total spend: $949,500.)
But they were far outspent by major industry players, who put nearly $2 million toward federal lobbying and campaign contributions this year. A majority of that total, $1,551,119, was spent on lobbying by some of the largest cannabis companies in the country, including Canndescent, Weedmaps, Palliatech Inc. (now known as Curaleaf), Surterra Holdings Inc., Trulieve, and, through NFF, Privateer Holdings, Scotts Miracle-Gro, and LivWell.
And at least $313,100 went to candidates and their PACs this election cycle from companies including LivWell, Privateer Holdings, Scotts Miracle-Gro, MedMen, and Wana Brands. Of that amount, Democrats were given $95,000 and $218,100 went to Republicans.
Neal Levine, a former executive at LivWell who headed the NFF effort, told Cannabis Wire that the timing of NFF’s formation wasn’t a coincidence. As the GOP and House Speaker Paul Ryan promised comprehensive tax reform last year, NFF wanted to quickly push the repeal of 280E and alleviate one of cannabis operators’ top concerns.
The Fund “was formed really as an organization that could speak to the right from the right in the right’s language in regards to our issues,” Levine said, “since, you know, the cannabis industry is essentially the modern day personification of new federalism.”
In June, a new group formed called the Cannabis Trade Federation, for which Levine has been named chief executive; fourteen cannabis companies are board members. It will also have an immediate singular lobbying goal, this time to push the STATES Act. Levine said that he hopes to provide funds for—and fold into the federation—non-profits such as MPP. “The advantage to us,” he said, “is that we get to work collaboratively with everybody, we get to coordinate the right messengers going to the right offices on Capitol Hill. And the advantage to these organizations is we help raise the money that they’re looking for.”
Rob Kampia, MPP founder and former executive director, said lessons learned at the state level also apply to Congress: The industry alone, he said, won’t pass meaningful cannabis reform with a targeted lobbying approach.
Kampia believes the key to building support for lasting change has four elements: a grassroots effort to mobilize voters and activists; “grasstops,” which are influential, visible spokespeople for the cause; direct lobbying; and positive media coverage.
“Businesses aren’t set up to do that,” Kampia said. “There’s something that these businesses always overlook because they’re not in the business of changing laws. They’ve never changed a state law. They have no expertise in this.”
What happens when cannabis groups or businesses give to politicians that might help the cannabis industry’s interests but who also support causes that could be viewed as abhorrent to some consumers?
The industry has already had to confront that scenario. In June, Cannabis Wire reported that What A Country! PAC (WACPAC), a committee founded by Florida Republican Representative Carlos Curbelo in 2015 to support immigration reform, was funded primarily by the cannabis industry. Major donors to the PAC included CEOs and executives of some of the biggest cannabis companies, including MedMen, Columbia Care, LivWell, and Palliatech Inc. (now known as Curaleaf).
While Curbelo, who lost his reelection bid last week, took a moderate approach to immigration — he supports DACA, for example—and the purpose of the PAC, according to its Facebook page, is to support “candidates for US congress who are committed to reforming America’s immigration laws,” the PAC donated thousands to politicians with staunchly conservative, and in some cases extreme, immigration views.
After Cannabis Wire revealed the PAC’s donors, Daniel Yi, a spokesperson for one of WACPAC’s top contributors, MedMen, said the company was unaware that the PAC was related to immigration, and that its intention was only to support Curbelo, a cannabis advocate. That explanation didn’t sit well with cannabis proponents. In light of MedMen’s donation to WACPAC, an activist group called the Massachusetts Recreational Consumer Council announced that it was going to boycott a local event sponsored by the company. (MedMen told both Cannabis Wire and the Massachusetts group that it had requested a refund from Curbelo and WACPAC. According to the most recent campaign filings, the donation has not been refunded.)
Yi told Cannabis Wire in June that the WACPAC donation and aftermath was a “learning experience,” adding “We’re not a political entity. We’re a business,” he said. “And we’re in the business of cannabis.”