Photo Credit: Shutterstock.com/Fotokon
February 18, 2014
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Three fifths of Americans are okay with legalized weed, a high point
reached after a precipitous rise in public approval over the last year.
If pot sales continue without a hitch in Colorado, and later in
Washington, that figure is likely to rise and lend more momentum to the
seemingly inexorable march toward a regulated market for the plant:
currently, 20 states plus DC permit either recreational or medical
marijuana use, and cannabis industry experts predict that 14 more states
will be added to that roster in the next five years.
Marijuana
prohibition has roots in neither healthcare consensus nor scientific
consideration; rather, it was sparked by white Americans' xenophobic
resentment of Mexicans living in the Southwest, who had grown the plant
in the region since before the United States forcibly seized it from
Mexico. Locking up the Mexicans (whom the nation’s first drug czar,
Harry Anslinger, called "ginger-colored niggers") was a convenient way
to bar them from taking white jobs in Depression-era America, and the US
government made marijuana possession and sale illegal in 1937. Over
time, the justification for pot prohibition morphed into a moral
argument tied up in the cultural wars of the 1960s, and then successive
Republican presidents sold the public on the idea that marijuana was
anathema to the industrious American way. By the end of the 1980s, 80
percent of Americans opposed its legalization.
There has never
been a legitimate reason for outlawing cannabis. The shift in favor of
legalization owes some of its momentum to generational change and
expanded access to information. But if the sudden support for
legalization still confuses our understanding of America as a nation
steeped in Puritanical conservatism—a tradition that, at one point,
helped elevate the criminality of marijuana possession higher than child
sex abuse—then we can reconcile the apparent contradiction by
identifying another tradition that even more profoundly captures the
essence of America's ethos: big business capitalism. The United States
has incubated more multinational corporations and enriched more moguls
than any country in the history of the world, and a burgeoning class of
weed elite is hoping to turn marijuana into the next great American
industry.
The ArcView Group, a network of cannabis businesses and
investors, estimates the current national legal marijuana market
(including medicinal and recreational) at $1.44 billion, a figure that
is projected to rise to $2.14 billion next year and soar to $10.2
billion over the next five years. Separate attempts at estimating the
total market value of the combined lawful and underground business have
clocked numbers as high as $100 billion (by comparison, Facebook's
market capitalization reached the same value in August 2013).
Entrepreneurs have rushed into the increasingly legitimate business of
cannabis, some with steeled lucidity wrought from years spent working
with medicinal marijuana, others more bumbling and fresh-faced. All are
united not only by stratospheric expectations of success, but also by an
idea of what it will take to get there.
Troy Dayton, CEO of the
ArcView Group, believes that large-scale corporate ventures will be
"absolutely" necessary to legitimize cannabis in the eyes of the law and
sophisticate the consumer economics of pot.
"The
market represents people's desire; the market is what leads to
products," he told Truthout over the phone, and in the market for
marijuana, "bigger companies with more mass appealed products will
certainly get a big piece." In a May 2013 feature from Vice, Dayton was
quoted as saying, it is "so much better to have large investors and
corporations involved in this industry, because when you have big
business behind something that creates jobs and tax dollars, it becomes
completely untenable to keep putting people in prison for it."
Dayton
is an overseer of a huge hyper-capitalist experiment in which investors
and entrepreneurs are aggressively courting (and sometimes hustling)
each other to claim their piece. As a recent article in the New Yorker
pointed out, Colorado and Washington are the only places in the world to
create legal cannabis markets overseen by the state. Uruguay passed a
law in August that would legalize the purchase of marijuana at
government-run dispensaries, but the American institutes have much less
public regulation, and the entrepreneurs leading the charge are near
delirious with opportunism.
"We are in the process of building the
number one global brand of cannabis," proclaimed Jamen Shively,
spokesperson for the recreational marijuana retailer Diego Pellicer, in
an interview with Truthout. The company, whose founders have labeled it
"Big Marijuana" and "the Starbucks of pot," was launched in the hopes of
becoming an enterprise worth tens of billions of dollars, and its
founders held a hyped-up media conference this past summer, with special
guest Vincente Fox Quesada, 55th president of Mexico, to drive home the
point. If any company captures the sky-high hopes of those at the helm
of the recreational revolution, it is Diego Pellicer. Although the
business stumbled considerably after its boisterous debut in Washington
State, it has nevertheless become a point of revulsion for marijuana
enthusiasts who believe companies like Diego Pellicer want to tie up
their precious plant with some of the worst features of capitalism.
"I
understand why people are afraid of 'corporatization,' but really, it's
the thing that's finally going to bring down the wall," John Davis, CEO
of Northwest Patient Resource Center, a business partner of Diego,
assured Truthout in a recent conversation. He spoke positively of
"business" as the only force that has been able to successfully
challenge draconian pot laws: "If [positive] things happen through the
corporate vehicle, that's not a bad thing at all."
The short
history of Diego Pellicer raises the question of how much public good
can be rendered through the corporate vehicle. From its initiation until
very recently, the company was led by two senior traders named Doug
Anderson and Alan Valdes of the investment firm Wall Street Capital
Partners. An October article in the Seattle Weekly exposed how Anderson,
Diego cofounder, was once accused by an Illinois judge of defrauding
investors through a Ponzi scheme; Valdes, the former board chairman of
Diego, openly suggested selling the firm to undisclosed tobacco
companies in three to five years. Both men are now nominally uninvolved
with the company.
"Most people in the pot movement want a
progressive pot industry that supports people in communities and that
creates a lot of good-paying jobs," longtime marijuana journalist David
Bienenstock told Truthout, "but there's the concern that's not how
corporate America tends to view free enterprise."
While he
believes that the proliferation of corporate cannabis would be a
"massive improvement" over current oppressive prohibition laws, he
believes it is fallacious to say that corporate America is the solution
for which pot activists have been waiting: "The most dangerous thing is
accepting this framing that big business will make marijuana legitimate
and to rewrite history in a way that it was big business and capitalism
that came in and created this wonderful industry."
Advertising is
the primary means through which any big company expands its consumer
base and grows. Though the novelty of legal weed
hasn’t necessitated
that new pot shops in Colorado spend much on ad sales yet, mass pot
advertisement will intuitively become more common in the future, and
will reflect a bottom-line ideology that sustains itself on hedonic
excess. This will be a break from centuries in which marijuana was
revered for centuries as an enhancer of physical and psychological
well-being. The mainstream commodification of the plant will do to it
what it has done to everything else: gut it of social meaning outside
the confines of economic relationships. Anheuser-Busch
reportedly
has plans to join the pot-advertising blitz. Maybe it’s a little
disingenuous to enshrine the distant past as a moral high point for
marijuana use, but it’s also true that few people crack open a can of
watery beer without the intent to incubate drunken numbness.
Existing
experiments with highly capitalized, publicly traded medical marijuana
corporations have proven to be such fraudulent ventures that they've
done anything but legitimize the industry. The first publicly traded
marijuana company, Medical Marijuana Inc., is a "penny stock company run
by criminals and alleged fraudsters," rails a report on Seeking Alpha, a
stock market analysis web site. Among many damning allegations against
the company, the report accuses MMJ of cooking its books by inflating
its market value (peaking at $355.6 mm) and somehow ducking out of
filing quarterly reports to the Securities and Exchanges Commission that
would reveal the scam. Furthermore, as the report highlights, MMJ's
now-former president and CEO Michael Llamas had a long history of
blatant financial mischief that resulted in an indictment by the federal
government for participating in a "multistate Ponzi scheme and related
mortgage fraud scams."
The corporation has also been outed by
whistleblowers for enabling its subsidiary companies to lie about the
content of their products. A recent analysis published by Martin Lee of
Project CBD found that the company Dixie X Elixirs & Edibles, MMJ's
first foray into the $5 billion "cannabinoid and wellness industry," has
routinely mislabeled its products as containing more medicinal value
than they actually have. As Martin Lee put it to Truthout, "Medical
marijuana is proof that corporate capitalism is not necessary [for
legitimacy]."
Aaron
Cantú is an investigator for the Marijuana Arrest Research Project and
an independent journalist based in Brooklyn. Follow him on Twitter @aaronmiguel_
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