Is Marijuana Industry Money Warping the Legalization Movement?


A couple of recent developments have focused attention on the newly legal marijuana industry in several states and the potential for those new businesses to have an enormous impact on the shape of legal marijuana as it is rolled out in several new states. There is a lot of money involved in the industry, and money always plays a role in politics.

Money Has Always Been a Factor

The importance of money in the legalization movement is not new. A handful of rich donors, led by billionaire philanthropists George Soros and the late Peter Lewis, have provided the bulk of the funding needed to gather the required number of signatures to qualify an initiative for the ballot, and the funding to run a professional campaign, in most of the successful marijuana voter initiatives since California first adopted medical marijuana in 1996.

But those funders were motivated by their desire to end marijuana prohibition, and they were not trying to profit personally from those changes.

In a bizarre way, these traditional funders served as a (self-appointed) filter for weeding-out proposals that were not well drafted, or which attempted more significant reforms than the public was ready to support. If the polling numbers did not register support in the high-50% range, the funders would generally not provide money to help those efforts, and the proposals fizzled.

Industry Money

In California in 2010, for the first time a statewide marijuana-related voter initiative (Prop. 19, a proposal to fully legalize marijuana), was almost totally funded by one successful marijuana businessman, Richard Lee, the owner at the time of the Bulldog Coffee Shop in Oakland, modeled after the coffee shops that sell marijuana in Amsterdam; and the head of Oaksterdam University, founded in 2007 to train those who were interested in learning the skills needed to succeed in this new industry.

Lee personally donated the $1.4 million dollars required to gather the signatures to qualify Prop. 19 for the ballot, and, not surprisingly, he controlled the drafting of the language of the initiative as well. The proposal ended up losing, with 47% of the vote. Some felt the initiative could have won if it had included provisions offering the existing small growers and sellers a more significant role in the proposed new legal system.

And then, just a few weeks ago, we saw Issue 3 in Ohio, a legalization measure funded by a small group of investors who blatantly wrote an initiative that would have established themselves as an oligopoly who totally controlled the (initial) ten commercial cultivation centers in the state. Issue 3 crashed and burned on election day, receiving only 36% of the vote!

There were other factors that likely contributed to the defeat (the polling going into the vote only showed a bare 51% majority support), but the public outcry against the self-serving aspects of the initiative was clearly the reason the proposal did so poorly. Many of those voters who favored an end to marijuana prohibition apparently decided there were limits to price they were willing to pay to stop the arrests of smokers, and guaranteeing millions to these already rich investors was clearly not acceptable to them.

But that is not likely the last time we will have to deal with legalization initiatives that seek a financial advantage for those providing the money to run the initiatives. As more and more states legalize marijuana, and more and more marijuana business owners become rich and successful, these business leaders with cash to burn will seek to shape legalization in new states.

On one hand, this may be seen as a positive development because there are now more possible sources of funding available to help qualify a legalization initiative for the ballot, and to run a successful campaign; but on the other hand, we may well face more Ohio-style problems, where the language of the initiatives that qualify may be offensive to the very consumers legalization is intended to help.

Is The Industry Taking Over the Legalization Movement?

This fear of the industry influence over the legalization movement became a point of public debate recently when the chief federal lobbyist for the Marijuana Policy Project (MPP), Dan Riffle, quit his job, telling colleagues and the press that “the industry is taking over the legalization movement and I am not interested in (working for) the industry.” Riffle pointedly added, “ I felt for the last few months the industry was dominating the legalization movement’s work in general, and MPP’s specifically.”

To some degree Riffle was simply reflecting the reality that the group with which he had been working has largely become a voice for the industry. Most of their funding now comes from marijuana businesses, and the head of MPP, Rob Kampia, is one of the founders and a board member of the National Cannabis Industry Association (NCIA), the principal national marijuana business lobby. Once Kampia lost his principal funder, Peter Lewis, due to a scandal involving inappropriate sexual conduct, he turned to the industry for funding to survive.

But it was nonetheless a bit jolting to hear such a strong public statement of disapproval from an MPP insider. Riffle elected to leave his job, rather than work for the industry.

NORML Remains a Consumer Lobby

At NORML we have long argued that any organization must decide whether they wish to represent the interests of the consumer, or the interests of the industry, but they cannot have it both ways. When legalization was merely an idea, and prohibition was the law of the land, all of us who opposed prohibition were on the same side; we favored legalization. It was not then necessary to get down to the details of precisely what we meant when we said we supported legalization.

But today, with legalization becoming a real possibility in several more states each election cycle, the details matter. And most business interests are principally interested in minimizing regulations and maximizing profits. We live in a free enterprise system, so there is nothing inappropriate about seeking to build a successful marijuana business.

But consumers too must have a prominent place at the table when these decisions are made.

What Consumers Want

Marijuana consumers want what consumers in most other areas also want: we want a high quality product that is safe, convenient and affordable. We want to know that the marijuana we buy legally has been tested by a state-certified lab for molds and pesticides, and is accurately labeled as to the THC and CBD content. And we don’t expect to pay black market prices for legal pot, or to drive half-way across the state to find a legal retail outlet.

And, we need the option of growing our own marijuana. Most consumers will not likely exercise this option, just as most beer drinkers do not make beer in their basement, although they are legally permitted to do so. By keeping the option of growing our own marijuana, and boycotting those retailers who sell an inferior product or over-charge for their product, we can assure the industry largely remains responsive to our needs.

So let’s pay attention to the warnings of Riffle and others of the dangers of the legalization movement being taken-over by the industry. But let’s not assume that all industry involvement is bad for the consumer, or that everyone in the legalization movement has become an industry spokesperson.

NORML has always been a consumer lobby, but we are not anti-business. We also have some successful marijuana businesspeople on our board, and we sometimes receive financial contributions from those in the industry. But when we do, we are transparent with our relationship with these business interests, and we take great care to make it clear to them, and to the public, that we will never mold or shape our political goals to accommodate business. We speak for the consumer, and always will.

And I see no indication that other legalization groups, such as LEAP or SSDP or DPA, all of whom receive some marijuana industry funding, have changed their policies to accommodate those business interests.

Most of us working to legalize marijuana are motivated by the goal of expanding personal freedom, not profiting from the new industry. Let’s keep it the way.

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