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Bernie’s Pot Legalization Plan Bars Big Tobacco — But Would It Work?

Inside Bernie’s Ban on Big Tobacco
PHOTO Lindsay Fox

Politics

Bernie’s Pot Legalization Plan Bars Big Tobacco — But Would It Work?

Bernie Sanders has released his plan for cannabis legalization, which features provisions to keep Big Tobacco from colonizing the new industry. But large tobacco companies are already getting a jump on the cannabis sector, and other industries could just as effectively squeeze out small cannabis businesses.

On Thursday, Oct. 24, Democratic presidential candidate Bernie Sanders, the self-professed democratic socialist and longtime independent senator from Vermont, released his ambitious cannabis legalization plan.

The plan includes the now-standard buffet of progressive cannabis policy ideas: removing the plant from the Controlled Substances Act, creating a robust equity program to address the racist War on Drugs, and expunging criminal records. But Sanders’s plan also includes one unorthodox idea: It calls for banning tobacco and cigarette corporations from “participating in the marijuana industry.”

Outlined on the “Legalizing Marijuana” page on his campaign website, Sanders says that one of his goals is to “ensure legalized marijuana does not turn into Big Tobacco.”

“Big Tobacco is already targeting the marijuana industry for its profits,” the platform states. “As president, Bernie will not allow marijuana to turn into Big Tobacco.” Instead, he calls for programs to “incentivize marijuana businesses to be structured like nonprofits,” with an emphasis on cooperatives that will “create jobs and economic growth in local communities.” 

He would also “ban companies that have created cancer-causing products or [are] guilty of deceptive marketing” and “institute market share and franchise caps to prevent consolidation and profiteering.”

Sanders’s plan to keep large tobacco corporations out of the cannabis industry makes sense: those companies have already started making moves in Canada’s cannabis industry, and the senator is notoriously opposed to elite consolidation at the expense of the average citizen. However, it’s not clear if the plan would work — and why it doesn’t also address the threat of the pharmaceutical and alcohol industries.

Why the Threat of Big Tobacco Is Real

There is no doubt that Big Tobacco has designs on the cannabis biz. That threat is, in fact, already upon us.

Last December, tobacco giant Altria — Virginia-based owner of Philip Morris and Marlboro cigarettes — invested $1.8 billion in Canadian cannabis giant Cronos Group, the Toronto-area licensed producer that last year became the first canna-business to be listed on the NASDAQ. The investment gave Altria a 45% stake in the company, with an option to increase its stake to 55% over the next five years.

Of course, both companies waxed optimistic and enthusiastic about the deal. “Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” said Cronos CEO Mike Gorenstein in a statement.  

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” echoed Howard Willard, Altria’s CEO, in his own statement.

The Altira website now states: “Altria Group holds diversified positions across tobacco, alcohol and cannabis.”

And we can expect more such news. This July, the Financial Times reported that Imperial Brands, UK-based producer of Davidoff and Gauloises cigarettes, made a big investment in the cannabis sector with a £75 million deal to take a stake in Vancouver’s Auxly Cannabis Group.

“Diversifying our next generation products portfolio with this investment provides Imperial with further options for future growth,” said Imperial’s chief development officer Matthew Phillips, in the predictable corporate-speak.

And this was not the company’s first such investment. Last year, Imperial took a small minority stake in British biotech company Oxford Cannabinoid Technologies. The name leaves little doubt what plant its research is focused on.

But What About Big Pharma & Big Booze?

But Big Tobacco isn’t the only corporate interest poised to descend on the cannabis sector and establish dominance — nor the principal one. 

Certainly, when it comes to patenting cannabis products, it is Big Pharma that has the big lead. Last year, a study jointly undertaken by Washington, D.C.-based cannabis industry analyst New Frontier Data and London-based cannabis biotechnology firm Grow Biotech named the top applicants for cannabis patents in Canada (where such patents are more available than elsewhere). Seven of Canada’s top 10 cannabis patent holders were found to be major multinational pharmaceutical companies, including Ciba-Geigy (a subsidiary of Swiss giant Novartis), New York-based Pfizer Products and the United Kingdom’s GW Pharma

In March 2013, it was announced that one of Canada’s leading licensed producers had entered a partnership with the national subsidiary of Sandoz (also a wing of Novartis). The deal, hailed as a milestone for the arrival of cannabis in the corporate economy, called for joint research and co-branding by British Columbia’s Tilray and Sandoz Canada

Big Booze is also pursuing synergy with Big Bud. 

CNBC reported in August 2018 that the Canadian subsidiary of Molson Coors had entered into a joint venture with the Hydropothecary Corporation, a Quebec licensed producer, to produce cannabis-infused drinks for the Canadian market. Lagunitas, a California beer brewer owned by the Dutch giant Heineken, is already marketing a cannabis-infused sparkling water brand called Hi-Fi Hops. Yes, it contains hops like beer, but contains no alcohol — just THC. It’s being marketed in California, where beer now has to compete with legal pot. It seems the booze biz may be adopting an attitude of “If you can’t beat ’em, join ’em.”

Nearly simultaneously, one of North America’s top brewers sank $4 billion into the continent’s top legal cannabis cultivator. Shares of Ontario-based licensed producer Canopy Growth Corp jumped nearly 30% after beer giant Constellation Brands announced its investment in the Canadian company.

After years of lobbying against cannabis legalization, both Big Pharma and the alcohol industry have recently turned around on the question. Last year, the Wine & Spirits Wholesalers of America (WSWA) issued a policy position in support of states’ rights “to establish a legal, well-regulated, adult-use cannabis marketplace,” taking many observers by surprise.

The Case for a Tobacco-Cannabis Firewall

Among the various reasons for a legal firewall keeping Big Tobacco out of the cannabis industry is the danger of the addictive and carcinogenic products of the former being conflated with the decidedly safer and friendlier products of the latter in the public mind.

This was well illustrated in comments this week by the Republican Sen. John Cornyn from Texas. In a speech on the Senate floor ahead of hearings on the health impacts of cannabis, Cornyn questioned the push to end federal cannabis prohibition — and drew a dubious analogy to the tobacco industry. 

“There’s no shortage of people who claim that marijuana has endless health benefits and can help patients struggling from everything from epilepsy to anxiety to cancer treatments,” Cornyn said. “This reminds me of some of the advertising we saw from the tobacco industry years ago where they actually claimed public health benefits from smoking tobacco, which we know as a matter of fact were false and that tobacco contains nicotine, an addictive drug, and is implicated with cancers of different kinds.”

This despite the fact that studies have demonstrated that moderate cannabis use holds no risk of lung damage — in vivid contrast to tobacco. And there is mounting evidence of the medical efficacy of cannabis for various ailments.

So, much of the progress that has been made in eroding the cannabis stigma in recent years could be reversed through its association with tobacco.

But more importantly, in the struggle between small producers and home cultivators on one hand and corporate cannabis on the other, the threat doesn’t just come from the tobacco industry. Maybe there’s a case for Sanders’ proposed firewall to be extended to the pharmaceutical and alcohol industries as well.

Of course, many of the giants of today’s cannabis landscape have arrived at their dominant position without infusions of capital from these other industries — pointing to a more intractable long-term dilemma.

TELL US, do you think cannabis should be sold by large corporations?

1 Comment

1 Comment

  1. YearofAction

    October 28, 2019 at 3:16 am

    Corporations have no right to control cannabis, which includes growing and selling it. They should be limited to purchasing cannabis, so that they can develop quality products derived from cannabis. Our government of the people, by the people, for the people should respect the Constitution’s Amendments that originally intended for cannabis to also be of the people, by the people, and for the people.

    Cannabis was widely grown and used when the states ratified the U.S. Constitution in 1787. The Commerce Clause anticipated cannabis commerce between states, with foreign nations and Indian tribes. The Necessary and Proper Clause intended for laws to be correctly composed.

    The plant Cannabis sativa L. was such a versatile, valuable, renewable natural resource that the Bill of Rights was ratified by the states in 1791, with the intent to keep its legal use locally controlled.

    The 9th Amendment intended for the right to use cannabis to not be federally denied or disparaged, even though the right to bear arms was established by the 2nd Amendment. The prohibition of gun ownership by cannabis users violates that amendment, however, there is a way to respect both Amendments by reinforcing the Well Regulated Militia Clause.

    The 10th Amendment removed the power to control cannabis from the federal government, and reserved it to the states and the people. The 20th century’s federal misconstruction that marijuana prohibition also meant cannabis prohibition, and the 21st century’s misleading federal definition of hemp as a variety of cannabis for the purpose of excluding it from marijuana prohibition, both violate that Amendment.

    After the Civil War, the states ratified the 14th Amendment in 1868 to establish privileges and immunities for both freeborn and newly emancipated citizens, to continue to grow and use cannabis, which states could not abridge. Allocation of “marijuana businesses licenses” to oligopolistic corporations, violates Section 1 of that Amendment.

    In the context of those Amendments, the powers, rights, privileges, and immunities to control cannabis were purposely established for states, people, and citizens, not the federal government, nor corporations. Yet somehow, when the malformed federal definition of marijuana was created, cannabis became prohibited at the federal level. A body of federal laws was then created that favored corporations over people. It is time to end that nonsense by reconstructing the definition to reflect that contextual framework.

    The original malformed federal definition of marijuana was introduced by the Marihuana Tax Act of 1937, then it was subtly modified and placed in Schedule 1 by the Controlled Substances Act of 1970, and then it was severely modified to exclude hemp by the Farm Bill of 2018.

    Each of those definitions contained these same three unacknowledged deceptions to covertly revoke the rights of citizens to grow and use cannabis: 1. The Imbued Racism, 2. The Adumbrating Riddle, and 3. The Subsumed Cannabis-use Prohibitions.

    1. Disparaging racism is imbued into that federal law because the definition uses the Mexican slang term “marihuana”.

    2. The adumbrating riddle disguises how marijuana is actually derived from cannabis. The riddle itself is disguised, but it looks like this: Marijuana is what substance that is “all parts of the plant Cannabis sativa L.”, and simultaneously “does not include the mature stalks of such plant”?

    3. The subsumed cannabis-use prohibitions are the legitimate prohibitions that are derived from the 2nd, 9th, 10th, and 14th Amendments. They are subsumed by unjustly aggrandizing the prohibition of marijuana to include the prohibition of cannabis.

    Those three deceptions can be altogether eliminated by: 1. using the anglicized homonym “marijuana”, 2. clearly describing how marijuana is actually derived from cannabis, and 3. explicitly including the cannabis-use prohibitions from the 2nd, 9th, 10th, and 14th Amendments. This will rectify the definition in the necessary and proper way to uphold our U.S. Constitution, and carefully deschedule cannabis.

    Eliminating those deceptions will create a perimeter of limited federal prohibitions that restore, protect, and encompass the powers of states to regulate control of cannabis by citizens, and countenance the careful use of cannabis by people, while also limiting corporate uses of cannabis. These limited prohibitions will preclude corporations from enticing children to “smoke marijuana”, but enable corporations to outsource cannabis for their development of quality products from cannabis.

    After the federal definition of marijuana is reconstructed to eliminate its deceptions, then that “other substance” can be also descheduled, or merely rescheduled, based on the adulterated medical value of marijuana itself. In either case, the reconstructed definition will inform local controls over the undesired proliferation of marijuana.

    “The people — are the rightful masters of both congresses, and courts — not to overthrow the Constitution, but to overthrow the men who pervert it.” (Abraham Lincoln)

    We the People are obliged to contact our members of Congress, and our favored congressional candidates, about reforming federal marijuana law. We can also insist that they legislate this reconstructed definition of marijuana that actually upholds our U.S. Constitution:

    Sec. 802.
    (16) The term “marijuana” means all parts of the smoke produced by the combustion of the plant Cannabis sativa L., which is, as are the viable seeds of such plant, prohibited to be grown by or sold by any publicly traded corporation or subsidiary company, and such smoke is prohibited to be inhaled by any child or by any person bearing any firearm, as is their intake of any part or any product of such plant containing more than 0.3% THC by weight unless prescribed to such child by an authorized medical practitioner.

    This definition will refresh the civil rights expressed in the legal documents of the Founding Fathers, by providing the foundation to help prevent misconstruction or abuse of the Constitution’s powers, extend the ground of public confidence in the Government, and best ensure the beneficent ends of its institution, as well as establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, by adhering to the self-evident truths that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, and that among these are Life, Liberty and the pursuit of Happiness.

    The Relevant Definitions.

    1. The Original Malformed Definition of Marijuana, from the Marihuana Tax Act of 1937.

    Sec. 1.
    (b) The term “marihuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds, or resin- but shall not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

    2. The Scheduled Malformed Definition of Marijuana, from the Controlled Substances Act of 1970.

    Sec. 802.
    (16) The term “marihuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

    3. The Severely Malformed Definition of Marijuana, from the Farm Bill of 2018.

    Sec. 802.
    (16)(A) Subject to subparagraph (B), the term “marihuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.
    (B) The term “marihuana” does not include (i) hemp, as defined in section 297A of the Agricultural Marketing Act of 1946; or (ii) the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

    4. The Misleading Definition of Hemp, created by the Farm Bill of 2018.

    Sec. 297A.
    (1) HEMP. The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

    The inaccurate federal definitions of marijuana and hemp mislead people into believing that those terms refer to separate types of cannabis when they actually refer to the separate uses of cannabis plants (cannabis smoke and cannabis fibers, respectively). We need to stop tolerating such deceptive federal definitions that burden our rights in favor of the wealthy elite.

    Question from Mrs. Powel of Philadelphia in 1787: “Well, Doctor, what have we got, a republic or a monarchy?”

    Dr. Benjamin Franklin: “A republic, if you can keep it.”

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