Will new cannabis laws create giant marijuana companies, like a Philip Morris or Anheuser-Busch of weed?
SIGNS POINT to yes.
The pot industry is in a curious place. On one hand, it is still a cottage industry. On the other, there are lots and lots of cottages, with legal sales projected to hit $6.7 billion this year. Somehow this is happening despite recreational weed being legal in just four states and despite the strictures of federal law. Since we have no idea how pot will be regulated going forward, it's actually kind of fun to theorize about it.
Today, adults in Oregon and a few other states can buy weed like we can buy beer. I do not know if that will be true when federal prohibition ends, or if weed will become a prescription-only item. Whether pot is sold at Plaid Pantry or cloistered away at Central Drugs, though, it seems likely that very large enterprises will emerge just like they have in the greater commodity and pharma sectors. That's just the way our system seems to work.
Rather than keeping weed friendly, small, and local, one smart lawyer in my firm argues that federal prohibition is actually creating Big Marijuana, or Big Canna. The idea is that state lawmakers are naturally attracted to the campaign support and ease of dealing with sophisticated businesses, and especially to the tax revenues that Big Canna could provide. Oregon recently took a remarkable step toward scaling the industry, abolishing residency requirements on canna-business ownership and investment. Today, lots of money is streaming into Oregon, with the goal of bringing mom and pop to the next level. Someone will make a movie about all of this one day and it will be about how smart this was, or about how we stepped in it.
Today, people argue that we need to keep the big money out, and the industry on the small side. Others argue that without sturdy financial backing, our pot businesses won't succeed. A corollary debate is whether legislators should treat pot like a common agricultural product, or adopt strict controls to ensure that giant weed firms don't crowd out the masses. Very smart and well-intentioned people disagree about all of this.
However you feel about these issues, the fact that Big Canna makes people nervous is understandable. Companies like Philip Morris and Anheuser-Busch profit in part off dependency and are generally oblivious to local communities. The business model of these companies has always been somewhat insidious: They promote consumption and aim to frustrate research and laws that trim profits. There are obvious lessons in all of that for the marijuana industry.
For now, it seems that we are on an indirect path to Big Canna, and it seems more likely that weed will be a commodity than a prescription drug. If that happens, here's hoping there is also room for other, nimbler brands of all shapes and sizes, like with craft beer and wine. For now, it's up to the states.