Mis-imagining Marijuana Inc.

I was recently on Nevada Public Radio with Allen St. Pierre, who is a leading marijuana legalization activist. We had similar views on the likely shape of a legal marijuana industry, namely that it would be corporate dominated, employ armies of lobbyists and fight to keep taxes and health and safety regulations as minimal as possible. Mr. St. Pierre said that the food industry would be the best place to look for a parallel: About 90% of food is produced by mega-corporations and a few small players cut up the remaining scraps of business. I tend to think that a legalized marijuana industry would look like Big Tobacco — indeed marijuana production companies may simply be divisions of tobacco companies — but St. Pierre may have the better analogy.

Our predictions aren’t particularly insightful. Indeed, they don’t rise much above common sense: The shape of corporate America isn’t hard to discern. I was therefore intrigued to hear Mr. St. Pierre say that as he travels around the country, he spends a great deal of time disabusing legalization advocates of the idea that a legalized marijuana industry wouldn’t be, well, an industry. The likely form of a legalized marijuana industry isn’t appreciated by many people who oppose marijuana legalization either. Mis-imaginings of legalized cannabis in both camps are likely a consequence of the cultural meaning cannabis has for a significant portion of the U.S. population.

For millions of Americans, the word “marijuana” is hard-wired to the part of their brain that divides the human population into those who went to Woodstock and those who went to Viet Nam. The peculiar result is a largely left-wing movement fighting hard (alongside some corporate billionaires) to create a multinational corporation and a largely conservative movement fighting to stop the advance of capitalism and the private sector. Some people on both sides mis-imagine a legalized marijuana industry made up of bucolic co-op farms run by hippies in tie dye t-shirts, selling pot at the lowest possible profit to friendly independent business folk in the towns who set aside 10% of their profits to save the whales. This image is pleasant to some and revolting to others, but that’s as may be because it’s not what would happen under legalization.

This will be tough for baby boomers to hear, but the current generation of Americans doesn’t know Woodstock from chicken stock and understands the Viet Nam War about as much as they do military action in the Crimea. If the U.S. legalized marijuana today, those now fading cultural meanings would not rule the day, capitalism would. Cannabis would be seen as a product to be marketed and sold just as is tobacco. People in the marijuana industry would wear suits, work in offices, donate to the Club for Growth and ally with the tobacco industry to lobby against clean air restrictions. The plant would be grown on big corporate farms, perhaps supported with unneeded federal subsidies and occasionally marred by scandals regarding exploitation of undocumented immigrant farm workers. The liberal grandchildren of legalization advocates will grumble about the soulless marijuana corporations and the conservative grandchildren of anti-legalization activists will play golf at the country club with marijuana inc. executives, toast George Soros at the 19th hole afterwards and discuss how they can get the damn liberals in Congress to stop blocking capital gains tax cuts.

Comments

  1. DCA says

    Thanks for making this point; the effects that lobbying already has had on legal addictive substances seems to me a very strong reason for plenty of caution in altering the legal status of any others.

  2. Brett Bellmore says

    And they would NOT be gunning down their competition, and having their customers locked away merely for being customers. Which is why it would still be vastly superior to the status quo, even if you happen to not like corporations.

  3. wmd says

    Allen is the executive director of the National Organization for the Reform of Marijuana Laws.

    NORML has been talking about “regulated like tomatoes” for years, so the food agribusiness model seems like something he’d say. I think much of NORML’s audience hears “sold at farmer’s markets” when that simile is used, but the reality of tomato production is agribusiness. What I’ve seen Mark write about reform of marijuana laws would not look like that at all, and in some ways fits the more bucolic and tie dyed woodstock scenario.

    Current medical supply in CA (and I believe CO as well) is profit driven with a strong commitment to quality.

  4. Henry says

    The word “marijuana” “divides the human population into those who went to Woodstock and those who went to Viet Nam.”

    No, I don’t think so. Although I did not serve in Vietnam, I believe that marijuana use was prevalent there among U.S. soldiers. It would probably be more accurate to say that the word “marijuana” “divides the population into those who went to Woodstock or Vietnam, and those who sent the latter to Vietnam, or otherwise supported the war.

  5. Benny Lava says

    “the current generation of Americans doesn’t know Woodstock from chicken stock”

    Oh no, they remember Woodstock. They went to Woodstock in fact, and remember seeing Metallica and the riots during Dave Matthews Band. They know their Woodstock franchise.

  6. says

    It seems like there are some more options available; for example, you could try and cripple Big Pot before it even gets going. You could ban advertising of any kind, or impose really strict limits on market share (no company holding more than 5% of the market, say), or even impose a government monopoly like they do with liquor in Utah. Personally, I don’t find that marijuana lobby that threatening, but I’d be a lot more sympathetic towards something like that with more dangerous drugs like morphine.

    On the other hand, it’s hard to imagine Congress resisting any sort of money, even the theoretical kind. If you set up a strict regulatory scheme, likely as not once sales got going Republicans would deregulate the industry, collect Big Pot contributions, then turn around and run against the pot-smoking hippie Democrats.

  7. Brett Bellmore says

    “think much of NORML’s audience hears “sold at farmer’s markets” when that simile is used, but the reality of tomato production is agribusiness.”

    I’m pretty sure the reality is both agribusiness AND farmer’s markets. Or else I was hallucinating the last time I was in a farmer’s market.

    Hopefully, the model for pot re-legalization will be alcohol, not tobacco. Alcohol is, after all, the one example we have of a substance the government tried prohibition of, and then, miracle of miracles, gave it up for a bad deal. Tobacco, by contrast, is a legal drug that’s in the process of gradually being transformed into contraband.

    In a sense, tobacco is pot’s past, while alcohol might be it’s future. Alcohol has a lot to tell us about how to manage restoring the legality of a substance. Tobacco? About the only thing it’s got in common with pot is that you can smoke it.

  8. says

    Big Pot? Really? If anything it would seem more like microbreweries – and many of those potential customers simply existing outside of the market because of the relative ease of growing your own, and the fact that such smaller quanties will ever be required by the average user. I think there might be a scenario in which regulation and health care might create a sort of small pharma marijuana industry. But even there, it would be less Pfizer and more fish-oil-type supplement.

  9. Matthew Meyer says

    I am sure that some of us already wax nostalgic over the pre-Prop 215 days when smoking pot still had real power as a political act. Of course the notion of big business taking over cannabis is as old as hippie rumors of Big Tobacco trademarks taken out on names like “Acapulco Gold” against the day legalization came.

    Ryan’s ideal model sounds a bit like things I’ve heard Mark Kleiman suggest.

    But anyway, what would be so bad about a pot industry that’s just like any other? Why do we have any reason to think we deserve any better? (And how on earth can we imagine that overall “social harms” are less under prohibition than regulation?)

  10. says

    Wouls the model forlegal marijuana be closer to tobacco or to alcohol? Big Tobacco has cleaned out Little Tobacco entirely. Big Bootze corporations like Ambev and Diageo dominate world markets, but there are hosts of microbrewereies and small vintners. It halps that wine at least is a very variable product, with a dozen or so major grape varieties and a good number of winemaking decisions bewtween vine and bottle, before factoring in the real or imaginary mysteries of terroir.
    Small Booze no doubt provides a useful cloak of invisibility to Big Booze. I suspect it also makes the industry’s lobbying somewhat less obnoxious, as it’s harder to form a united front. Chateau Lafite has nothing against a minimum price in supermarkets.

  11. Matthew Meyer says

    Eli’s right. Growing excellent pot is not easy, but growing pretty good pot is, and would be even easier under legalization.

    Even a heavy stoner could grow enough for a year’s personal use and then some. Imagine a regular beer drinking doing the same–not impossible, but more work and expense.

    Relative ease of self-production versus alcohol and tobacco, plus a very different potential for problem use, might mean significantly less susceptibility to some aspects of big business.

  12. Duncan20903 says

    I find the claims of inevitably going corporate and that widespread marketing would be the norm to be specious.

    C’mon Kieth, the form of a legalized retail distribution chain is tabula rasa, and we needn’t be captives to “big reefer” unless we choose to be. It’s simply disingenuous to posit the notion that in regard to cannabis (and other MADs) there are only 2 speeds, those choices being absolute prohibition or being forced to allow the sales reps from the dope factory to set up promotional displays in the lobbies of elementary schools for the purpose of handing out free samples to 3rd grade students.

    You know, it’s been a long time since I recall seeing an ad on TV for tobacco cigarettes. Do you think that the tobacco companies stopped advertising on TV because they decided it would be better for the overall health of society?

    One of the major differences in the markets for legal drinking alcohol and for smoking tobacco is both of those markets came into existence when people had no clue about the long term deleterious effects of those substances. By the time enough information was available there were a significant number of legitimate business concerns with a vested financial interest in both markets. There are no legitimate, vested financial interests in the cannabis market.

    It’s simply a false dilemma fallacy to create a hypothetical set of rules and then label them inevitable.

    You know Kieth, it’s widely accepted that the day that Bob Dylan got the Beatles stoned when they came to New York in 1964 as the beginning of the modern era of enjoying cannabis. Ironically the Surgeon Generals report on the health hazards of smoking tobacco was published. In 1964 sentences of more than a decade for petty possession were the norm, not the exception. Yet cannabis use proceeded to skyrocket, and tobacco smoking entered a long term down trend which sees the per capita consumption of smoking tobacco decline by just a little more than 62%. There’s no difficulty whatever figuring out why 1963 was “peak” tobacco in the US.

    http://www.cdc.gov/tobacco/data_statistics/index.htm

    In 1963 cigarettes consumed per capita was 4,345 cigarettes.
    In 2006 cigarettes consumed per capita was 1,619 cigarettes.

    That’s a decline of 62.74%, and without making tobacco illegal for adults.

    Total number of cigarettes peaked in 1981 at 640 billion cigarettes.
    Total number of cigarettes declined to 380 billion cigarettes. You have to go back to 1951 to find a number lower.

    That’s a decline of 42.63%, also without making tobacco illegal for adults.

    So can you say with a straight face that cannabis consumption of any stripe has seen a comparable decrease?
    ——————————————————————————–
    It is my assertion that by and large people will reject anything that is proven to be deleterious to health, and that 62.74%/42.63% reduction is evidence that supports that assertion. The SG didn’t need to use bald faced lies, half truths, and hysterical rhetoric to make so many people decide to quit using smoking tobacco. The health hazards of smoking tobacco are real enough. The propaganda against enjoying cannabis is disregarded because it takes about 5 minutes inside my world to plainly see that the propaganda is simply untrue.

    Have you heard about the green tongue canard? This one is going directly into the same file as the assertion that cannabis use causes men to grow teats. The really sad thing about this one is that the so called “drug recognition experts” (DRE) think that this a sign of long term cannabis use and a sign of impaired driving. That nonsense may well have something to do with why they catch so few cannabis addled drivers. When does your side of the table acknowledge that unsupported claims and fictional hazards are only helping your credibility to vanish? Like I said, 5 minutes and anyone with an IQ of better than the average room temperature can figure this out quickly.

  13. Betsy says

    Only two things that money can’t buy, and that’s
    True love, and homegrown tomatoes.

  14. Duncan20903 says

    Matthew Meyer, what in the world makes you think that growing tobacco is difficult?

    http://www.growtobacco.net/

    quoted from link above:

    “Tobacco can easily be grown inside your garden. If you would like to try growing tobacco for your own personal use, follow the simple steps below”
    ———————————————
    I certainly don’t have to imagine people who are capable of brewing all of their own beer. I can find them online. Not very many do but that’s because there’s so many different flavors of home and micro brewing to sample.
    http://www.beersmith.com/
    ———————————————
    The California Bureau of Equalization said that in 2010 California pocketed more than a $100 million in sales tax collected by their authorized medicinal cannabis vendors. Every Californian authorized to purchase their medicine from a retail vendor are entitled to grow their own, and also entitled to purchase from black market cannabis vendors who don’t collect sales tax for the State. California’s sales tax rate is 8.25% so that $100 million in sales tax represents well over a $billion in gross sales.

    http://www.eastbayexpress.com/LegalizationNation/archives/2010/09/09/california-marijuana-tax-stamps-readied

  15. says

    Duncan, your post had me thinking about tobacco growers in states with high taxes. I simply cannot believe people willing to shell out $10 bucks for a pack of cigarettes. Yet they do!

    So, what is it about that neat little package? Addiction is likely a prominent factor in there being people for whom home-production would just be really weird, for whatever reason. Yet as addicts, they get their fix the way they’re comfortable with.

    Then I started thinking about these poor nicotine fiends out in their gardens, who would otherwise never bother, watering their crop, a cigarette hanging out of the mouth. !!!

  16. Betsy says

    First, you never smoke in a tobacco field, because the tobacco in the cigarette can carry tobacco mosaic viruses that will destroy your own crop.

    Second, growing tobacco is relatively easy, (if you don’t mind picking tremendous hornworms off by hand, and dropping them into a pail of kerosene (in lieu of the alternative, which is to spray pesticides on the leaves that you will be smoking), and you don’t mind getting the resinous sap, which never comes off, all over your skin and clothes every time you pass through the field, which is almost daily if you are going to take care of it right; and you like tending a persnickety crop through several critical stages of development, and you live in the right climate and have the right soils) … I say, it’s relatively easy to GROW, but the HARD part is curing the leaves properly for a decent smoke.

    THAT takes round-the-clock care for several days, even weeks, tending a bed of coals in a rather tightly closed building in August and September, or, in the alternative, owning your own bulk gas-fired bulk curing unit.

    Of course, there will always be those devoted hobbyists who make these sacrifices, which are seen to be consid’ably more than the tradeoffs of, say, home-brewing –

    – Nevertheless, I point out that even home-brewers of a promising stout or pale ale are not allowed to *sell* their product at the farmer’s market, or indeed even to a small circle of friends, without running afoul of some rather forbidding state and federal mechanisms.

  17. Keith Humphreys says

    Many smart comments above — thank you.

    Some people apparently thought it necessary to argue that one could recognize the corporate angle and still support legalization…well, yes, obviously, that’s why I mentioned Mr. St. Pierre as an example.

    One gloss on “small booze”: Many of the “small producers” are owned by big producers if you scratch hard enough, but the big companies work hard to hide this. Gallo took its brand indicator off of “Night Train” but they still produce it, as well as a bunch of allegedly new, independent labels such as Dancing Bull, Turning Leaf and Zabaco. And big brewers own a growing slice of the microbrew world, we are not going to stop this trend any more than we can prevent most independent bookstores and record stores and coffee shops and regional food brands from being eaten alive by big corporations over time, they aren’t competitive except for narrow market slices.

    And as for advertising bans on corporate products, forget it. We are the only country in the world that gives corporations as much right to advertise as we do — Europeans are surprised to see all the pharma ads on American television, and the SCOTUS would strike down bans on marijuana industry products in a heartbeat.

  18. says

    Mr Humphreys,

    Your post is on point and it’s true, most of us in the legalization camp spend an insufficient amount of time considering what the actual contours of the legal regime would look like.

    Still – do you believe that “Big Cannabusiness” would be worse for human welfare overall than the black market? We’re talking about drug-related violence, human misery related to incarceration from the Drug War, and the millions of tax dollars expended regularly by the government on enforcement. I think we can put up with more lobbyists in exchange for the end of a system that causes so much suffering.

  19. jamie says

    One thing that is being missed is that Big Tobacco and Big Booze are the way they are, in substantial part, because the government made them so. One of the major complaints about the huge tobacco settlement was that it was a collusive effort that made it substantially harder for small firms to compete. There are constant complaints by microbreweries about distribution cartels that effectively write legislation that favors the big guys. Until recently, it was extremely difficult for foreign alcohol producers to compete due to various import regulations. Etc.

    This is not to say that the landscape wouldn’t be dominated in the absense of revolving-door regulatory capture, or that the same won’t happen with pot. But it is to say that we are far from a free market in either of those categories.

    And I just can’t let this go:

    I am sure that some of us already wax nostalgic over the pre-Prop 215 days when smoking pot still had real power as a political act.

    Come on. Getting high hasn’t been transgressive since well before I first smoked it in the 80′s. By some counts, majority of the country has smoked it, which seems low to me – I don’t anymore, and haven’t for some time, and I only know a couple of people who are strongly anti-pot, and they admit to having tried it. (I am aware of selection bias, thanks.)

    It is less political than refusing to recycle.

  20. Anonymous says

    I except that there will, in fact, be some bucolic-hippee businesses producing marijuana. They’d be small, though, and their product would only be available in certain areas. The vast majority of legal pot would come from mega corporations as you say, available everywhere it’s legal to sell, sold by the kind of people you describe.

    As noted in the comment above, though, corporations, for all their faults, are still preferable to criminal gangs. It would also behoove us to remember that having lobbyists doesn’t guarantee that they’ll get what they want all the time. Lobbying and campaign money are factors in policy, but public opinion also does matter.

  21. Rob in CT says

    It will still be better than the status quo, even if you are 100% correct. I think the comments about craft and micro brewing are on-point, though. The market will likely become dominated by “big pot” (as the beer market is dominated by A-B, Coors, Miller…), but I see no reason there can’t be plenty of grow-it-yourself and small craft growers (imagine the DogFishHead of pot). They’ll account for a small % of total sales, no doubt, just like it is w/beer. But the presence of those little brewers have had a dramatic positive impact on American brewing.

    We are in a golden age of American brewing right now. I can go to the store and chose between tons of great beers. I don’t particularly care, btw, if some of those good options are made by the big buys under different labels. I care about being able to find and buy tasty beer.

  22. Keith Humphreys says

    Sean Lai: Wise question. I would like to see substantially fewer people in prison both for their sakes and for the public costs involved. Drugs were every bit as illegal 30 years ago as they are today, and the incarcerated population was about 25% its current size. That tells me there are lots of ways to achieve that worthy public policy goal other than legalization.

  23. Ralph says

    Regarding: Tobacco can easily be grown inside your garden.

    Yeah, but can it be easily grown inside your closet?

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