The Business of Cannabis: New Policies for the New Marijuana Industry

193 Pages·2018·6.265 MB·English

by  D.J. Summers

The Business of Cannabis
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The Business of Cannabis
New Policies for the
New Marijuana Industry
D. J. Summers
Copyright © 2018 by D. J. Summers
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or other wise, except for the inclusion of brief quotations in
a review, without prior permission in writing from the publisher.
Library of Congress Cataloging- in- Publication Data
Names: Summers, D. J., author.
Title: The business of cannabis : new policies for the new marijuana industry /
D. J. Summers.
Description: 1 Edition. | Santa Barbara, California : Praeger, An Imprint of
ABC- CLIO, LLC, [2018] | Includes bibliographical references and index.
Identifiers: LCCN 2017054055 (print) | LCCN 2018005548 (ebook) |
ISBN 9781440857867 (hard copy : alk. paper) | ISBN 9781440857874 (ebook)
Subjects: LCSH: Marijuana industry— United States— Government policy.
Classification: LCC HD9019.M382 (ebook) | LCC HD9019.M382 U378 2018 (print) |
DDC 338.1/73790973— dc23
LC rec ord available at https:// lccn . loc . gov / 2017054055
ISBN: 978-1-4408-5786-7 (print)
978-1-4408-5787-4 (ebook)
22 21 20 19 18 1 2 3 4 5
This book is also available as an eBook.
Praeger
An Imprint of ABC- CLIO, LLC
ABC-C LIO, LLC
130 Cremona Drive, P.O. Box 1911
Santa Barbara, California 93116 - 1911
www. a bc- c lio. c om
This book is printed on acid- free paper
Manufactured in the United States of Amer i ca
Contents
Preface vii
Introduction xi
Chapter 1 Supply and Demand 1
Chapter 2 Federal Laws vs. State vs. Local Control 17
Chapter 3 Lobbyists and L awyers 29
Chapter 4 Going to Market: Cultivation, Testing, Manufacturing,
Production, and Retail 55
Chapter 5 Banking and Financial Implications 71
Chapter 6 State by State, Nation by Nation 83
Chapter 7 Taxation and Ramifications 95
Chapter 8 Picks and Shovels— Ancillary and Support Industry 105
Chapter 9 The Future of Cannabis 127
Notes 143
Index 165
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Preface
I wanted this book to be a lens and a warning. Maybe I hit the mark, maybe
I didn’t.
I started covering the cannabis industry in Alaska in the summer of 2015.
I did not decide to—in fact, I w asn’t even in the state when it was deci ded I
should cover it. When my co- worker picked me up from a short vacation to
California, he told me he and the other editorial staff of my newspaper sim-
ply deci ded I would do it. He offered to flip me for the beat. I’m glad I didn’t
take him up on it.
I got to work building sources and attending regulatory board meetings
and industry association meetings and nighttime parties at Anchorage’s now-
defunct smokeasy, Pot Luck Events, the de facto war room/night club of the
advocates and business hopefuls flocking to the scene. Only weeks into cov-
ering the beat, I started noticing some faces falling. Many of those faces
belonged to the advocates and vote- rustlers who jumped for joy when Alas-
ka’s cannabis legalizing Ballot Mea sure 2 passed. As they sat through board
meetings and drained their energy trying to wade through the licensing
process— trying to rectify what they wanted with what was— I couldn’t help
thinking, “Maybe they didn’t know exactly what they w ere getting into.”
Legalization advocates often come from the counterculture. I’m not the first
journalist with a “careful what you wish for” message.
The political- industrial complex in the United States is just that— complex.
When voters give the thumbs up to recreational weed, they vote for an out-
come only, a l egal gram in hand to roll and smoke. If they want something to
do with the process— growing the gram or selling the Zig Zags to roll it— they
are in for a rude awakening about the realities of commerce in this upstart
industry.
We as a nation o ught to talk about t hose realities, though, and ask w hether
they resemble what we really want. We should talk about how the system we
have works in practice and whether it makes us not just better citizens, but
viii Preface
better p eople. We have a big, grinding machine— what happens to a nug of
White Widow when we throw it in, and do we like it?
If cannabis can ignite some interest in formerly uninterested people in the
question, then this book is a win.
I wrote this book with the journalist’s tool kit of reports, studies, and inter-
views, which is mostly to provide context and look for trends. Fortunately,
two makes a pattern, and in the cannabis industry, there is always a pattern
emerging to pore over.
The fact that all eyes are on cannabis helped the research. Even though
there are plenty of studies on cannabis’s medical impacts, the studies on mar-
ket trends and economics are scarcer than for most other industries. T here
are many on policy and safety and tax impacts, however, and I made good
use of them, as I did with the market trend and profitability reports many of
the cannabis data firms produce in order to get policymakers’ support.
What I couldn’t get from studies, I got from news. I relied heavi ly on the
excellent reporting being done around the country on the trou bles the indus-
try f aces and what the Band- Aids are, in par tic u lar, the reporting of Debra
Borchardt, Jacob Sullum, David Miyoga, and John Schroyer. Fortunately, pot
is so existentially impor tant to digital readers that no single national cannabis-
centric event goes without dozens of reporters dog piling on it, like a Minor
Threat mosh pit. In a way, cannabis testifies to the power of the press— when
the press pays enough attention and the public enough attention. If only it
were so with city council corruption— which is happening to night, in your
city council—or local charity, or any other issue citizens could pay attention
to but can’t smoke.
To fill in blanks and get context, I did as many interviews with industry
leaders, po liti cal strategists, and officials as time allowed for. Time was indeed
a factor, with Canada’s recreational system set to start in the summer of 2018
and California to start licensing its recreational businesses in early 2018.
I have too many p eople to thank for getting me to book writing point, but
a few in par tic u lar deserve a shout- out— I could not have done this without
any of you.
First, thanks to my editor, Hilary Claggett, for working with a first- time
author and especially for working with me on the deadline. To Stephanie Pro-
kop for believing I could write a book and knowing I should at least try and
then making me try, foot dragging and heel digging be damned. Her husband,
Darren, for setting up an introduction with a publisher. My editor at the Alaska
Journal of Commerce, Andrew Jensen, for teaching me to dig, to break num-
bers into narrative, and to look for the narrative people hide behind the
numbers.
I owe untold gratitude to the friends who encouraged me along the way—
three of Alaska’s very finest reporters in par tic u lar: Elwood Brehmer, for not
claiming the pot beat, because he could have and prob ably would have done
Preface ix
a better job with it; Rashah McChesney, who told me to “just tell the story”—
sorry, girl, I know it’s heavy reading; and Elizabeth Earl, who made it a point
to let me know when my motivations seemed less than journalistic. Thanks
to the other friends who cheered me up with beer and let me crash their
couches and barbecues for a chance to get away from the screen and mooch
free food— Danielle Downs and her crew; the Robison family; Ben Jones and
his new bride, Tara, for giving me a place to stay and to focus.
My brother Nate and his wife Allie, who told me to come stay with them,
who gave me room and board and a truck, for no other reason than want-
ing to help. It did, and more than you can ever know. My sister Amber and
her husband Jared, who are such a rock of cheer and vitality that visiting
is like a re orientation to humanity. My b rother Matt, who gave me the anti-
authoritarian prism any journalist worth his salt needs.
For Mom, who never wanted me to s ettle for a job I only wanted to do for
the money. Last but most impor tant, for my Dad, who taught me to read, and
to love to read, so well that it ended up spilling over into writing.
Check it out, Dad. I wrote a book.