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Global Cannabis Partnership Unveils ‘Social Responsibility’ Standards

Cannabis Caves to ‘Corporate Responsibility’
Photo by Gracie Malley for Cannabis Now

Economics

Global Cannabis Partnership Unveils ‘Social Responsibility’ Standards

A group of cannabis companies have announced certification standards to promote corporate responsibility, a move seemingly prompted by some embarrassing scandals in the young industry.

At an industry conference in Canada, some of North America’s leading cannabis companies announced the formation of a new body to establish “social responsibility” standards and mechanisms for the burgeoning economic sector.  

The Global Cannabis Partnership, prominently including Ontario licensed producer Canopy Growth, was formally unveiled at the second annual World Cannabis Congress last week in Saint John, New Brunswick.

“We’re building an industry for the future,” said the GCP’s executive director Kim Wilson in a press release. “It’s one thing to have a legal license to operate; earning and keeping a social license is another story. We have a long road ahead of us, but today’s announcement is an important step in the right direction.”

The GCP’s goal is to promote a Responsible Cannabis Framework to positively influence the industry’s social and environmental impacts.  

“The RCF was developed through extensive research and consultation with a variety of stakeholders,” said Rick Petersen of Blu Advisory, an expert in corporate responsibility and author of the Framework. “We knew that we could rely on the experience of other industries, while at the same time coming up with the right steps to meet the challenges in our specific sector.”

The Four Principles Behind the Social Responsibility Standards

All members of the GCP will be required to sign the RCF, thus committing to four principles outlined in the document. They will then have up to one year to complete any work necessary to bring their operations into compliance and apply for certification by the Partnership’s Independent Evaluation Panel. 

First among these four principles is responsibility — the “responsible development, production, distribution and consumption of cannabis where it is legally sanctioned.”

Second is collaboration, emphasizing “the value of collaborating with the full range of stakeholders who have an interest in, and are impacted by, the legal cannabis industry.”

Next comes transparency, with performance subject “to a review by our stakeholders (limited only by competitive considerations).” 

Continuous improvement is the final principle: “Recognizing the challenges inherent in implementing a world-class standard for responsibility in a nascent industry, Members will seek out and apply best practices appropriate to their business developed by organizations both inside and outside the cannabis sector.”

Prompted by Scandal — Probably

Some have detected a whiff of damage-control in the formation of the partnership. Al Jazeera, in its account of the announcement, noted several recent scandals that have been an awkward reality for the legal cannabis industry. 

The most high-profile of these concerned Ontario’s Aphria Inc., which was accused by short-sellers of paying inflated prices for “largely worthless” assets owned by insiders. A special committee established by private auditors found the company paid an “acceptable” amount for the assets, but also found that certain directors had conflicting interests in the deals that were not fully disclosed to the board. Aphria is currently reconstituting its board and management team under interim CEO Irwin Simon. A report on Barron’s notes that the assets included small or undeveloped properties in Jamaica, Colombia and Argentina that had been “trumpeted as its entries into those national markets.”

Also named by Al Jazeera is Beleave Inc, which recently settled with regulators in British Columbia after admitting to having paid $7.5 million to consultants who didn’t actually do any work for the company. Then there’s the BC-based Ascent Industries, which filed for bankruptcy in May after a rash of irregularities resulted in its license being suspended by the Canadian government for “unauthorized activities with cannabis.”

Finally, Toronto’s Namaste Technologies fired its CEO in February for “breaches of fiduciary duty” and “evidence of self-dealing.” Namaste also found “irregular online advertising” on its Brazilian website, leading it to suspend sales of all products in the South American country.

Al Jazeera finds all this predictable for an industry that just recently emerged from the shadows of illegality. Quoted is Dan Daviau, CEO of Canada’s top cannabis investment firm, Canaccord Genuity Group.  “The industry is maturing incredibly quickly,” Daviau said, on an optimistic note. “I’m not saying you still won’t see the odd company step on a rake and hit their nose, but the propensity for that to happen has slowed down a lot.”

A Place for Equity in the ‘Social Responsibility’ Standards?

Some activists at the grassroots level are putting forth a more fundamental critique of the industry and advancing one principle not named by the Partnership. In a piece for progressive website TruthOut last month, journalist Laura Flanders interviewed a group of legalization advocates who are asserting that the cannabis industry owes “reparations” to those who have been criminalized by the War on Drugs.

Prominently quoted was Kassandra Frederique, New York state director of the Drug Policy Alliance, who was then pushing for this principle to be enshrined in the legalization bill that has since failed to pass in the statehouse in Albany. In her view, it is not only the behavior but the very constitution of the cannabis industry that must be addressed.

“I think what you are seeing right now is that it’s actually been advocates in communities of color telling their legislators this is what we need for this to move forward,” Frederique said. “We can’t go to a place where we legalize recreational or adult use of marijuana, and then get to a place where communities that have been the most impacted don’t have access to being a part of the business. We have to get to a place where, if everyone’s acknowledging that marijuana criminalization was bad for communities, then they need to reinvest in those same communities.”

Frederique stressed that legalization should be but the first demand in crafting a more just cannabis order.

“I think the conversation is a big one,” Frederique summed up. “How do we want to create an economy? The thing is, it’s really important to say that legalizing cannabis is not going to cure the ills of capitalism. Legalizing cannabis is not going to end racism. This is one way to reduce the harms of structures that are harming communities. But we can’t put on huge ideas on this substance and think that it will save all societal ills. It means that we have more space to be innovative to do different things.”

TELL US, what standards should the cannabis industry follow?

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