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Joint ventures

It takes a village to legalize marijuana, and the community includes everyone from billionaires to politicians

Joint ventures

A U.S. flag redesigned with marijuana leaves flies in front of the U.S. Capitol as protesters call on Congress to reschedule the drug classification of marijuana. (Bill Clark/CQ Roll Call/AP)

Fourth in a series on the legalization of marijuana

For soda drinkers worldwide, Coca-Cola’s advertising slogan—“Taste the Feeling”—may soon take on a new meaning: In September, officials at the Atlanta-based beverage giant revealed they are closely watching the growth of the cannabis drinks industry.

The feeling the company’s customers may eventually taste wouldn’t be the same high that marijuana smokers experience. But Coca-Cola spokesman Kent Landers said the beverage-maker is interested in drinks infused with an ingredient in marijuana that can ease pain but doesn’t induce a high.

The move could offer a boost in a soda industry with sagging sales, and it would follow the lead of beer-makers already on the path to marijuana-infused drinks (see “Pot in the bottle,” Aug. 18). Landers called Coca-Cola’s potential foray an exploration into “functional wellness beverages.”

The promise of wellness—whether medical, societal, or financial—has become central to the push to legalize marijuana, not just for pain management but also for personal pleasure. How has a little plant changed so many laws? How did marijuana gain freedom for recreational use in some states and for medical use in others—with future federal legalization looking likely?

The answer: persistent lobbyists, eager billionaires, willing politicians, and a lot of money to grease the path. Marijuana’s political supporters argue legalizing the drug will cure social woes from budget crises to racial inequities, even as some stand to profit themselves.

Flashback to early pro-pot efforts in California: In 2009, the Drug Policy Alliance—with its billionaire backer George Soros—poured in $1.6 million to push Proposition 19, a ballot measure aimed at legalizing marijuana for recreational use. One pro-pot ad portrayed legalization as the solution for California’s $11 billion budget crisis. The spot featured a middle-aged white woman stewing that Sacramento was “ignoring millions of … marijuana consumers” who wanted to pay their “fair share” of taxes that could fund the salaries of 20,000 teachers—if only the ballot measure passed.

Francois Mori/AP

George Soros (Francois Mori/AP)

Despite the big bucks, the measure failed that year. But the state’s green tax base continued to grow. By 2015, California had 50,000 pot farms in the state and a legal medical marijuana industry worth $815 million. The next year, big pro-pot spenders including Soros and former Facebook President Sean Parker threw $16 million into support for Prop 64, another ballot initiative to legalize recreational marijuana. This time it won.

Meanwhile, a company called Weedmaps was also a prominent backer for both Props 19 and 64. The self-described medical marijuana company has created a database of over 3,000 dispensaries of medicinal pot. The app and website feature more than 950 cannabis strains and a proximity locator using Google Maps. It claims nearly 2 million monthly visitors and $1.5 million in monthly revenue.

Is all this pot really for medicinal use? Justin Hartfield, Weedmaps’ founder, raises doubts. He started Weedmaps in 2007 as a 23-year-old computer science graduate from the University of California, Irvine. Hartfield told The Wall Street Journal that the following summer he leveraged his real problem with insomnia to gain access to medical marijuana for recreational purposes. He called California’s medical marijuana system “a total farce.”

Brian L Frank/Redux

Weedmaps founder Justin Hartfield smokes marijuana in his backyard in Orange County, Calif. (Brian L Frank/Redux)

The company kicked in $292,000 for Prop 19 but donated up to $1 million for Prop 64 after partnering with the pro-marijuana lobbying group NORML in online advocacy efforts. In 2011 Weedmaps bought the domain Marijuana.com for $4.2 million. Two years later VentureBeat.com reported that Weedmaps claimed it would “sell more marijuana than anybody in the world,” once it was legal to do so for recreational purposes.

In 2015 Hartfield founded “Californians for Sensible Reform” (CSR) and contributed $750,000 to the group to push recreational legalization, calling it a “generational cause” and an “economic imperative.” CSR’s stated goals were to raise revenues for the state budget and also to regulate pot like alcohol to “keep it away from kids and criminals.” That’s far easier said than done.

Now that recreational pot is legal for adult use in California, retail sales are on a record-setting pace. Cannabis industry research firm BDS Analytics estimates the California market will hit $3.7 billion by the end of the year—increasing to $5.1 billion in 2019. At that rate, Californians are on pace to spend more money on marijuana than on beer (the state had $5 billion in beer sales in 2017). BDS Analytics predicts California’s pot levy of up to 15 percent could collect a $1.4 billion windfall by 2021.

Colorado—which legalized recreational marijuana in 2014—reported total pot sales for 2014 to 2017 at $5.2 billion. Just last year, Colorado raked in over $247 million in cannabis revenue from taxes, licenses, and fees. When lobbyists dangle these kinds of numbers in front of other cash-strapped states, it’s hard for some politicians to ignore the dollar signs.

In New Jersey, Democratic Gov. Phil Murphy is fast-tracking marijuana legislation he promised in his first 100 days of office. Legislators still haven’t given him a final version of a recreational marijuana bill projected to raise $1.3 billion in tax revenue, but Murphy is not waiting for the law to pass before he moves forward with plans for more pot sales.

The governor already is retooling the state’s supply-and-demand infrastructure. Murphy signed an executive order significantly expanding the list of qualifying medical conditions for medicinal pot. In July, Murphy’s office announced it had found 10,000 new “patients” and 1,000 “caregivers.” His office also solicited for applicants to run up to six new dispensaries, anticipating a mass of customers from New York—a state limited to eight medical marijuana dispensaries.

Julio Cortez/AP

New Jersey Gov. Phil Murphy (Julio Cortez/AP)

In a current version of the New Jersey legislation, the state will cash in on marijuana sales as soon as the bill becomes law by simply authorizing existing medical marijuana dispensaries to become adult recreational retail outlets. Unlike other states expanding from medical to recreational use, New Jersey won’t require the usual one-year regulatory delay.

But next door, the Empire State could strike back. In July 2018, New York state’s Department of Health issued a glowing report about the future of cannabis in New York. Analysts concluded legalizing recreational weed could create over 200,000 jobs and create $173 million to $542 million in state revenue. Democratic Gov. Andrew Cuomo launched a working group to write a legalization bill in August.

WHILE STATES ARE PASSING medical and recreational laws, pro-pot lobbyists and members of Congress have also been busy. A Marijuana Business Daily analysis reported 41 pro-cannabis bills introduced in Congress from 2017 to 2018. That’s more than the total of 39 pro-cannabis bills introduced from 1999 to 2015.

Last year four U.S. representatives—Jared Polis, D-Colo.; Dana Rohrabacher, R-Calif.; Don Young, R-Alaska; and Earl Blumenauer, D-Ore.—formed a Cannabis Caucus. The Rohrabacher-Blumenauer Amendment, which prohibits the Justice Department from spending funds to interfere with state medical cannabis programs, was part of the omnibus spending bill President Donald Trump signed into law in March.

Other bills aim to reduce penalties for marijuana offenses. (Billionaire George Soros has also cited decriminalization as a reason for his support of legalized pot.) House bill H.R. 4815 would remove marijuana and the chemical THC from the Schedule I list of drugs that are illegal because of their high potential for abuse, danger, and lack of accepted medical uses. The bill would also decriminalize low-level marijuana offenses and expunge convictions for marijuana use or possession.

That legislation likely will not pass this year, but bills like the VA Medicinal Cannabis Research Act of 2018 are likely to have more support. The act would authorize the federal Veterans Administration to explore the use of “certain forms of cannabis and cannabis delivery” to treat veterans dealing with chronic pain conditions or post-traumatic stress disorder.

Ryan Hermens/The Paducah Sun via AP

A farmer in Murray, Ky., harvests hemp. (Ryan Hermens/The Paducah Sun via AP)

Meanwhile, the Hemp Farming Act of 2018 would remove hemp—defined in the bill as a cannabis plant with less than 0.3 percent of the chemical THC—from Schedule I controlled substances and make it an ordinary agricultural commodity. (Manufacturers use hemp to make products ranging from rope to building materials.) Between 2013 and 2018 the bill’s co-sponsor, Senate Majority Leader Mitch McConnell, R-Ky., received $126,050 from Altria—a tobacco giant that just invested in a medical cannabis delivery system—making the company McConnell’s second top political donor in the last five years.

In June, Sen. Cory Gardner, R-Colo., and Sen. Elizabeth Warren, D-Mass., introduced the Strengthening the Tenth Amendment Through Entrusting States Act. That bill would seek to protect states that legalize marijuana from federal intervention, since recreational marijuana is still prohibited by federal law. President Donald Trump has signaled he would sign the bill—a change from his 2016 comments that he was unsure recreational marijuana use should be legal.

The shift came as Gardner used his position on the closely divided Senate Judiciary Committee to block 20 Department of Justice appointments. Gardner’s move was a response to Attorney General Jeff Sessions rescinding the Obama-era Cole Memo—a document that outlined how the marijuana industry could operate in states without triggering federal law enforcement actions.

In April, after months of nominee shutdowns, the Republican senator announced he and the president had brokered a deal to break the impasse. That deal would deepen the disconnect between Trump and his already-beleaguered attorney general. But it might connect the president with a pot legalization trend that now seems nearly unstoppable.


Risks of the trade

As medical research, state laws, and public opinion shift in favor of marijuana, so too have adjectives. Not long ago, it was lazy dropouts growing weed in the basement, hippies buying dope discreetly in an alley, Rastafarians painting happy clouds in their brains.

Now, in 2018, it’s medicinal, herbal, organic, and (gasp) recreational.

Perhaps lost in the smoky haze is a hard word about America’s most widely used illicit drug: abusive. Roughly 30 percent of users develop some sort of dependence on the drug, with 9 percent becoming addicted, according to the National Institute on Drug Abuse. In 2015, 138,000 Americans voluntarily sought treatment for marijuana abuse.

GW Pharma

(GW Pharma)

Teen abuse is perhaps the most worrisome—17 percent of adolescent users become addicts, and 76 percent of adolescent admissions to publicly funded addiction treatment centers in 2014 were marijuana-related. One study of a Colorado children’s hospital found that cannabis-related emergency room visits for youth ages 13-21 quadrupled there from 2005 to 2014.

Researchers are uncovering new uses for the cannabis plant, but uncertainty about medical marijuana’s long-term effects remains. This summer the FDA approved a cannabis-derived drug, Epidiolex, to be used medically to treat seizures, but online retailers currently selling the drug have not yet come under the strict federal guidance for ingredient labeling. That means drug labels may be wrong. In a 2017 study published in the Journal of the American Medical Association, researchers found drug labeling inconsistencies in a majority of the medical cannabis products they tested. —Juliana Chan Erikson

Jim Long

Jim Long

Jim is a graduate of the World Journalism Institute's mid-career course.