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PART III: A Sea Change for Cannabis Politics

As legislative priorities shift, what is gained? And what is lost?

Nov 15, 2018 6:50AM EST Business

Co-founder of Cannabis Wire.

This is the final piece in Cannabis Wire’s series, Cannabis Goes to Washington. You can read the Introduction here, Part I here, and Part II here.

The growing cannabis industry is learning how to throw its weight around in Washington. Industry players are increasingly lobbying and handing out campaign contributions on both sides of the aisle. And perhaps most notably, the industry is making unprecedented alliances with Republicans.

For the politics of cannabis, all this amounts to a sea change. But what does it mean on Capitol Hill in 2019 and beyond? As legislative priorities shift, what might be gained? What could be lost?

First, some history: The cannabis legalization movement has roots in the National Organization for the Reform of Marijuana Laws (NORML), formed in the 70s when Congress was closer to decriminalizing cannabis than it’s ever come since. NORML built significant support in Jimmy Carter’s White House for ending arrests of cannabis consumers. Within months of his taking office, congressional hearings were held to discuss the possibilities, and at one of them, Carter’s drug czar, Peter Bourne, director of the Office of Drug Abuse Policy, said, “We believe that the mechanism for discouragement should not be more damaging to the individual than the drugs themselves.”

But Ronald Reagan ramped up the drug war when he took office, and any national movement in favor of cannabis was off the table. Along with NORML, the Drug Policy Alliance (DPA) and the Marijuana Policy Project (MPP)—both formed in the 90s—shifted strategies and focused their efforts at the state level. They got results. California legalized medical cannabis first, in 1996, followed by more than two dozen states in the decades since. Then, in 2012, adult-use ballot initiatives passed in Colorado and Washington. Those landmark achievements stunned a watching world, as these organizations continued to push other state ballot initiatives that flouted federal prohibition.

Today, thirty-three states and the District of Columbia have medical cannabis programs and ten states and D.C. allow adult use. (These numbers are inclusive of the midterms: Last week, through ballot initiatives, Michigan voters approved adult-use cannabis, and Utah and Missouri voters passed medical cannabis.)

Over the years, the groups pushing for changing cannabis laws built a steady argument rooted in a focus on patients with a medical need; on putting an end to the criminal justice-related harms of prohibition, from arrests that disproportionately affected people of color to the enrichment of violent cartels; on how cannabis is safer than alcohol; and on the proposition that legal sales could bring in tax dollars to be spent on public health, education, and research.

However, these are not the conversations toward the top of the agenda for the new, booming industry as it deploys lobbyists to Capitol Hill. The cannabis industry is trying to win in Washington the same way everyone else does: by using money to appeal to the power players in order to promote its business interests. Meanwhile, an increasing number of those power players happen to be in the GOP.

As a result of these factors, the legislation attracting the most resources and attention prioritizes exempting businesses, not consumers, from prosecution.

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A clear example of the new politics of cannabis is what is commonly called the STATES Act, for Strengthening the Tenth Amendment Through Entrusting States. The specific approach of STATES appeals both to the industry and to Republican support for states’ rights: It would essentially limit the Department of Justice’s right to infringe upon the legal industry at the state level.

For the industry, that means the same banking access and tax deductions granted to typical businesses. For GOP members with a philosophy of limiting federal power, it’s a comfortable fit, and thus has a measure of bipartisan support. The Act was introduced in June by Democratic Senator Elizabeth Warren of Massachusetts and Republican Senator Cory Gardner of Colorado.

The STATES Act is supported by many of the Democrats and organizations (like DPA, MPP, and NORML) that have historically thrown their support at federal legislation in favor of cannabis. The Act can arguably be seen as a step toward fuller reform, an interim goal at a time when Congress is not ready for full legalization.

But there may be tradeoffs, as criminal justice language in STATES is noticeably absent. If legislators take a states’ rights approach to cannabis, black and brown communities in states such as Alabama, in which legalization could take decades if it happens at all, will continue to face arrest and incarceration for cannabis-related crimes.

Legislation that addresses criminal justice does exist in Congress. New Jersey Senator Cory Booker, for example, introduced the Marijuana Justice Act of 2017, which would not only legalize cannabis nationally, but also expunge past cannabis convictions and establish a Community Reinvestment Fund for areas hard hit by the drug war, among other things. But the current reality is that only legislation with the muscle of Republicans and industry giants is likely to make it over the finish line.

Ethan Nadelmann, the founder and former executive director of DPA, foreshadowed this priorities shift in a 2015 interview with one of Cannabis Wire’s founders about a private group in Ohio that self-funded a statewide medical cannabis campaign that, had it been successful, would’ve given the group an oligopoly: “Now we’re entering a world where the principal people who see themselves benefiting are not the people who are not going to be arrested; the principal people who see themselves benefiting are basically the people who are going to make money from this.”

The Ohio campaign was the first time cannabis organizations like MPP and DPA had been bypassed by wealthy newcomers. Nadelmann added that he always knew “that we reformers would not be, over the long term, in such a strong position to shape what legalization would look like. Especially in the United States with its dynamic capitalist system.”

Alison Holcomb, the director of Washington’s legalization campaign in 2012 and then criminal justice director at the ACLU of Washington, worried back in 2015 about the same Ohio campaign, “Are we really just turning over all of the benefits of legalization to the privileged white class?”

The industry is all in on passage of the STATES Act, especially with the GOP maintaining control of the Senate in the midterm elections. The bill is the explicit priority of the Cannabis Trade Federation, a new cannabis industry group that includes the same cohort behind New Federalism Fund (NFF).

Neal Levine, the CEO of the Federation, told Cannabis Wire that criminal justice and other priorities are “tremendously important” to the group. But criminal justice could come later. “If some of the other proposals that potentially go further actually had a chance to start moving,” he said, “we would lend our resources to getting behind any proposal that could actually pass into law.”

Levine sees the STATES Act as something that is within reach and necessary. From the industry perspective, the three most concerning issues are the inability of the business to deduct expenses, the “lack of access to banking,” and “the threat that the DOJ can come and seize all your assets and kick in your door at any time,” he said.

“The STATES Act,” he continued, “addresses all three of those issues. And the STATES Act is a bipartisan bill that seems to have support in both houses, and the president said he’d sign it into law. So, if we’re able to fix those issues in the next Congress by actually passing legislation into law, we’re obviously going to pursue that with everything that we have.”

Kevin Sabet, the founder of the leading anti-cannabis organization, Smart Approaches to Marijuana, told Cannabis Wire that he believes the pioneering advocacy groups such as MPP, DPA, and NORML, are being pushed aside. He points out that cannabis companies are hiring some of the biggest lobbying firms in the country, such as Brownstein Hyatt Farber Schreck, to advance their cause. “What I find fascinating is that MPP might have brought these issues to the light,” said Sabet, “but they’re not leaving the dance with who they came with.”

Keith Stroup, the founder of NORML, told Cannabis Wire that while some of NORML’s donors have expressed concerns about new industry interests in the cannabis movement, the focus on business issues is, at least in part, a matter of practicality. “A lot of members of Congress who aren’t yet necessarily willing to embrace full legalization nonetheless recognize that if we’re going to allow individual states to legalize, then we do need to allow them to operate as other legal businesses operate,” said Stroup.

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What about the future for federal legalization? In many ways, the discussion could be considered premature because Congress fundamentally has done little on the issue (even the STATES Act only has ten cosponsors in the Senate and just twenty-nine in the House). Though, with Rep. Pete Sessions ousted from his role as chair of House Rules Committee where he blocked cannabis-related legislation, and Rep. James McGovern expected to be the Democrats’ replacement, that will likely change.

In fact, the cannabis issue is, at this point, up for grabs.

Democratic and Republican party platforms, both updated in 2016, show that, while the Democratic platform goes much further, neither party has embraced what is now a mainstream issue with majority American support.

The GOP platform takes no position on legal cannabis, noting only, for example, that “the progress made over the last three decades against drug abuse is eroding,” and pointing to the rise in heroin deaths. “In many jurisdictions, marijuana is virtually legalized despite its illegality under federal law,” the platform states. “All this highlights the continuing conflicts and contradictions in public attitudes and public policy toward illegal substances.”

The Democratic Party’s official platform lands somewhere between the priorities of STATES and, for example, the Marijuana Justice Act, introduced by New Jersey Senator Cory Booker. The platform says, “We believe that the states should be laboratories of democracy on the issue of marijuana,” but it also emphasizes the importance of criminal justice, saying, “we recognize our current marijuana laws have had an unacceptable disparate impact in terms of arrest rates for African Americans that far outstrip arrest rates for whites, despite similar usage rates.”

The midterms provide a good example of the Democrats’ reluctance to take the steering wheel on cannabis issues: While a rising number of candidates running for re-election said they are supportive of either medical or adult-use cannabis, it was not often an issue listed on campaign websites or used to rally supporters.

Celinda Lake, a Democratic pollster and strategist, believes her party’s candidates are “way way too intimidated about using the issue,” she told Cannabis Wire. “So we’re not going to see the maximum political impact that we could because candidates don’t realize how wildly popular it is, and frankly underutilize the issue. They’re pulling their punches and they shouldn’t be.”

As Lake sees it, the opportunity for Democrats to hit harder on cannabis reform is clear: “It has had such an energizing effect on two constituencies who really need to get out—millennials and African-American younger men.”

With the somewhat wishy-washy politics of both parties in mind, former Republican House Speaker John Boehner could serve as a harbinger of cannabis’ future. Boehner’s embrace of his role as the industry’s shiny new megaphone has generated intrigue and headlines.

Boehner recently spoke in a promotional video for something called the National Institute for Cannabis Investors, touting membership to the Institute as a way for regular people to profit off the “green gold rush” before cannabis goes fully mainstream. The group, co-founder Mike Ward said in the video, had spent millions pulling together the best research, and Boehner reminded aspiring cannabis investors of his Capitol Hill connections.

The former Speaker told viewers to get involved before Congress and regulators act, and everybody else wakes up to the opportunity. “There’s hundreds of billions of dollars sitting on the sidelines,” he said. “The boat hasn’t left the dock yet.”

He went further, arguing that Big Pharma and Big Tobacco wouldn’t stay out of the cannabis game forever. He promised, using vague language, that Congress would end prohibition. He didn’t say how or which bill would do the trick, and it didn’t seem to matter. The fact that Wall Street and its billions are knocking at the cannabis door seem to be reason enough, in his view, for Congress to act sooner rather than later.

If Big Pharma and Big Tobacco decide to double down, what will the eventual outcome be? Will the cannabis industry, like Big Tobacco, for example, prioritize profits over public health? At that point, will it be too late to remember why the legalization fight began in the first place? Will those who have suffered the consequences of prohibition silently watch as Wall Street traders reap the riches?

Boehner’s free-wheeling use of the phrase “Big Tobacco” was one of the most jarring moments of his infomercial. He meant the phrase to signal opportunity, never mind the industry’s sordid history of deceit. In fact, the comparison to “Big Tobacco” is a pull from the opposition’s playbook: The largest anti-cannabis group in the country, Smart Approaches to Marijuana (SAM), frequently draws the comparison to make its case. “Remember Big Tobacco?,” reads SAM’s homepage. “They’re back.”

Alcohol prohibition is the parallel preferred by most cannabis advocates: In the cases of both alcohol and cannabis, prohibition wasn’t an effective deterrent to consumption, and led to illicit markets and crime; and in both cases, taxpayer dollars went toward combating that crime that could’ve been spent mitigating the public health implications of legal use.

As with any significant national legislation, to see a cannabis bill through Congress, compromise—between players and priorities, between business and justice and politics—will be necessary. Senator Ron Wyden, Democrat of Oregon and a longtime cannabis proponent, acknowledged as much, telling Cannabis Wire that eventually, “Congress will have no choice but to act. It should, however, act now and ensure equal justice for those communities disproportionately hurt” by the status quo. “To get this done, we will need bipartisan support.”

And Wyden added this about the serious harms of ongoing prohibition: “No Republican claiming to support small government—or states’ rights—should be allowed off the hook for supporting the massive government infrastructure surrounding these failed policies.”

Jeremy Borden and Isaac Fornarola contributed reporting.