Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Saturday, November 22, 2014

"Vice Wars: Tobacco, Alcohol and the Rise of Big Marijuana"

The title of this post is the headline of this interesting and lengthy NBC News article.  Here are excerpts:

The specter of corporate cannabis loomed large on Tuesday, when the family of Bob Marley appeared on NBC’s Today Show, announcing the creation of Marley Natural. The world’s first global brand of marijuana launched with the support of $50 million dollars in private equity and the same marketing machine that took Starbucks to the masses.

“We see the inevitability of large, well-run companies to sell cannabis,” said Brendan Kennedy, the CEO of Privateer Holding, the Seattle-based company that’s behind the Marley brand. “That train left the station a long time ago.”

Less than a year after Colorado and Washington state opened the first commercial pot markets, and less than a month after two more states voted to follow suit, such frank capitalism has shocked the smiling wise-men of weed and their crusading friends in the legalization movement. Most hoped the market would remain a cottage industry of small-scale growers, collectives and dispensaries. Few expect it will....

Alcohol and tobacco interests are also keeping an eye on the burgeoning market.  The alcohol industry in particular has been communicating with representatives of NORML, DPA, and the Marijuana Policy Project, according to sources on both sides of the table.

They want to know whether pot will be a friend or a foe — a complement to their products, or, as some marijuana reformers have argued, an alternative that could sap America’s love of drinking.  The marijuana lobby accepts these overtures out of a combination of curiosity, realism, and smart strategy.  If a takeover is inevitable, they figure, it’s better to be prepared.

“Beer, wine and tobacco people — I’ve met with them all,” said Allen St. Pierre, the executive director of NORML, which is above all a consumer rights organization.  He doesn’t love the idea of Big Pot, but he believes it will help guarantee that users get a quality product at a fair price....

St. Pierre hopes to create a “Dionysus lobby,” built on the shared interests of alcohol, tobacco and pot.  All three industries want low taxes, the right to advertise freely, and the ability to make convenient sales, he said.  But so far the legal marijuana markets in Colorado and Washington are plainly over-regulated, he added, prejudiced against pot consumers, who should be allowed to buy marijuana as easily and safely as they do beer or wine or a pack of smokes.

“I’ve tried to say, ‘look, none of us should be hiding,’” he said.  “All of us are involved in a problematic adult consumer product and all of us enjoy using one or more of these products,” he continued.  “What do we want?  We can get it down to four words, almost a Wal-Mart bumper sticker: ‘Best product, lowest cost.’”

He said that one of his warmest receptions came from the Distilled Spirits Council, or Discus, which represents the leading producers and marketers of liquor in the United States.  One day last July a senior member of Discus called St. Pierre, according to an account of the conversation that St. Pierre emailed to a colleague.

That account along with a follow-up interview with St. Pierre illustrates how marijuana has sent a twinned-bolt of fear and excitement through the spines of alcohol executives.  The Discus executive congratulated the industry on its wins at the ballot box, St. Pierre recalled.  The executive also assured the marijuana lobby that the nation’s largest liquor makers would not fight legalization as long as the public supported it.

He estimated that a third of Discus board want to get into the marijuana business, a third oppose legalization, and a third believe that the industry should take a neutral position, according to St. Pierre’s recollections.  But Discus conveyed a threat as well, a complaint against the way marijuana advocates were demonizing alcohol in their campaigns.  “Marijuana is safer than alcohol,” is perhaps MPP’s most used slogan in fact, and the group relentlessly argues that America would be a healthier place if we put down our tumblers and decided to toke.

If such talk continued, the Discus rep said, according to St. Pierre’s recollection, the liquor industry would have no choice but to launch a counter-attack. That, St. Pierre agreed, wouldn’t be good for anyone....

The Beer Institute, which represents the nation’s 2,800 breweries, and the Wine & Spirit Wholesalers of America also confirmed meetings and calls with the marijuana lobby but denied wanting to get into the business.

All three show signs of the same double vision of marijuana as both opportunity and threat.  Earlier this year, Brown-Forman Corp., which owns Jack Daniel's, told investors that the spread of legalization could hurt its sales.  The Beer Institute is officially neutral on the question of marijuana legalization.  But Chris Thorne, the vice president of communications, seemed to take a shot at the new industry and its claim as a safe alternative to booze.

“We believe that it’s misleading to compare marijuana to beer,” he said in a phone interview.  “We are committed to responsible advertising, working with public officials and law enforcement, and supporting communities in the countries where we operate. I don’t think any of that is true for marijuana.  There are a lot of unanswered questions about marijuana — questions about its effect on the brain, and on young people — and we think legislators would be wise to look at these questions as they consider the legalization of marijuana.”

But at the same time, the Wine & Spirit Wholesalers of America may be ready to make marijuana work for it.  Earlier this year, in a letter sent to all fifty U.S. attorneys general and governors, the president of the WSWA argued that if a state decides to legalize marijuana, it should regulate it with the same three-tiered distribution system set up for alcohol after prohibition — a move some analysts interpreted as a sign that alcohol companies would be open to moving pot as well....

Tobacco executives, meanwhile, have been studying the marijuana industry for years, according to Stanton Glantz, a professor of medicine at the University of California, San Francisco.  His research has drawn an 80-million page archive of tobacco industry documents, spanning the 1960s to the late 1990s.  Many of the documents reference softening pot laws, rising use, and the dual threat/opportunity of a third major vice industry.

https://lawprofessors.typepad.com/marijuana_law/2014/11/vice-wars-tobacco-alcohol-and-the-rise-of-big-marijuana.html

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