Politics
A Cannabis Monopoly Asteroid is Coming (Op-Ed)
“As the power grab for control of the multibillion-dollar cannabis industry heats up, consumers and patients need antitrust protection.”
By Shaleen Title
If you think two or three powerful companies owning and controlling the sales of all regulated marijuana sounds like a good thing, you can click away from this article and go on with your day in peace. But if the thought of a market controlled by Marijuamazon, Canna-uber, or Weedbook (excuse me, Weedaverse) is unsettling to you, I want to introduce you to a valuable concept: antitrust laws.
What are antitrust laws, and why should you care? In short, when we lived in a different but similar “Gilded Age”—when oil tycoon John D. Rockefeller rocked a top hat as opposed to Jeff Bezos wearing a space helmet on his rocket joy rides—our government was pressured to address rising inequality by creating laws to prevent monopolies. Corporate influence has led to these laws being scaled back in practice, but the basic objective of antitrust laws remains: to protect the process of competition for the benefit of consumers.
As the power grab for control of the multibillion-dollar industry heats up, consumers and patients need antitrust protection. By applying the concepts of antitrust law to all federal cannabis reform now, we can avoid the creation of national monopolies before it’s too late and create a diverse and fair marijuana market instead.
Big tobacco and alcohol companies are making significant investments into cannabis and creating their own front groups, and even larger conglomerates are openly expressing their interest in getting into the industry once the product is federally legal. If you listen to them, you might think it’s a foregone conclusion that cannabis has to end up like so many other industries, from cigarettes to peanut butter, where the largest three or four firms control over 90 percent of the market.
And yet, nothing is a foregone conclusion. The future of federal legalization is up for grabs. To the frustration of all of us rooting for federal marijuana law reform, no piece of legislation has even made it to a vote in both chambers of Congress. As Politico observed recently, so-called “Big Weed” hasn’t been particularly effective, despite spending hundreds of thousands of dollars a year on lobbying efforts and hiring big names like John Boehner and other former members of Congress who never supported legalization while in office.
Instead of relying on profiteers, we can stick with the roots of our movement: the people. This moment calls for a united effort to preemptively crack down on national cannabis monopolies. Instead of further entrenching oligopoly-like markets, where consumers complain of high prices, we can put consumers, patients, workers and small businesses first.
We don’t need to start from scratch. Marijuana regulation may be relatively new, but regulation itself isn’t. Neither are antitrust laws that lead to more competition, better wages and innovation. When regulators have actively enforced these laws—as in the case of oil and railroad monopolies—they’ve been able to rein in corporate excesses and encourage a more diverse marketplace. But when enforcement is lax, as with Big Tech, concentrations of wealth and power can accumulate rapidly.
Prohibiting vertical integration (preventing one business from controlling all stages of production of the supply chain, from seed to sale) is a historically tested method of avoiding anti-competitive market dominance, for example. This rule is often cited as the reason the alcohol industry is not as concentrated as others—in the beer industry, the largest three firms control 75 percent of the market and craft brands have a chance to be successful.
To promote broader market access, many states, including Washington, West Virginia, Maryland, Pennsylvania, Massachusetts and Michigan have sensibly set some type of limitation on the number and type of marijuana business licenses that one entity may hold. But federal limits should reinforce them. The proposed Cannabis Administration and Opportunity (CAO) Act takes a significant step in the right direction with anti-monopoly provisions prohibiting commercial bribery and uncompetitive trade practices in the cannabis industry, modeled after similar rules for alcohol. But that alone is not enough.
Congress must also authorize states to continue their existing policies that offer state-level advantages to local and social equity businesses, which are becoming increasingly robust and starting to show results. Many of these programs would otherwise likely become invalid when marijuana is legalized due to the dormant commerce clause. Invalidating state benefits could make it impossible for small businesses to survive federal legalization.
But there’s an easy fix. By authorizing states to ban or delay interstate commerce, Congress can allow the states with expertise to continue their social justice efforts, instead of voiding their policies overnight, and use the data and information gathered from those states to better regulate the industry. To avoid protectionism, Congress could choose to only allow states to restrict interstate commerce as part of a plan for racial and social justice.
In a new paper, “Bigger is Not Better: Preventing Monopolies in the National Cannabis Market,” I argue for these and several other detailed policy recommendations for any federal cannabis bill, including the legalization of home cultivation and the creation of a multi-agency task force to enforce laws against anticompetitive conduct and predatory behavior.
One might reasonably wonder if this is all necessary. As a consumer in the Northeast, for example, I would love to enjoy craft cannabis from Oregon—wouldn’t simple federal legalization toss the status quo and create an open and free market to fix that? Unfortunately, no. The legal cannabis market is neither open nor free, and federal legalization does not automatically solve that. Even after cannabis is descheduled, under the current proposals, businesses would still need to navigate the state and local processes which have been marked by limited licenses and exorbitant applications that stifle a fair market and create bidding wars that reward larger, better resourced businesses.
How much more difficult will it become for small businesses once multinational conglomerates get involved? We cannot leave that question up to chance. If our goal is to protect consumers and support small businesses, then we need to enact proactive policies that prevent concentrated market power from squeezing them out.
Lawmakers must consider that without intentional protections, federal legalization could reverse the progress many states have made when it comes to public health and racial and economic justice. With most social equity programs only recently implemented, it’s difficult to imagine how the programs’ participants could possibly compete against would-be cannabis robber barons. The playing field will be dramatically changed for all cannabis businesses when they are competing with companies that can, for example, ship in their own supply from another state with their own existing infrastructure. None of the proposed federal legalization bills address that problem yet—perhaps relatedly, Amazon has endorsed all three of them.
We don’t have to stay on our current path and assume that every cannabis company will get gobbled up by bigger ones until we all work for the same employer producing the same three overpriced, low-quality strains. Instead of following the lead of aspirational Big Marijuana, we can choose to use national legalization to usher in a new golden age of the market that puts people first. Time-tested antitrust concepts developed for the economic freedom of all Americans are the key to do it.
Shaleen Title is a former top cannabis regulator for the state of Massachusetts who currently serves as CEO of Parabola Center and Distinguished Cannabis Policy Practitioner in Residence at The Ohio State University Moritz College of Law’s Drug Enforcement and Policy Center. (Disclosure: Title supports Marijuana Moment’s work through a monthly pledge on Patreon.)
Schumer Gives Update On Federal Marijuana Legalization And Banking In Meeting With Equity Advocates
Politics
Key Pennsylvania Senate Committee Completes Final Marijuana Legalization Hearing To Inform Reform Legislation
A key Pennsylvania Senate committee on Monday held the last of three scheduled hearings on marijuana legalization, taking testimony that’s designed to help inform a forthcoming reform bill that the panel’s chairman is actively drafting.
The Senate Law and Justice Committee meeting involved testimony from cannabis reform advocates, former regulators from other states and industry stakeholders.
Sen. Mike Regan (R), who chairs the panel, circulated a cosponsorship memo last year along with Rep. Amen Brown (D) to build support for the reform, and these meetings are designed to give lawmakers added context into the best approach to legalization for the state.
“Legalization of adult-use marijuana is a complex and obviously controversial issue,” Regan said at the end of Monday’s discussion. “We are grateful for the many perspectives, personal experiences and opinions we have received. To all my colleagues on the committee, thank you for your continued participation. I look forward to working together on this important issue for Pennsylvania.”
At an initial hearing last month, much of the discussion focused on whether creating a regulated market would be sufficient to eliminate illicit sales, how police would be affected and the impact on impaired driving.
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The second hearing held late last month centered on varying tax structures and other regulatory approaches that have been created in states like Illinois and California.
While reform bills have been introduced in past sessions and the policy change has the support of Gov. Tom Wolf (D), this latest hearing marks only the third time a legislative panel has debated recreational legalization in the Republican-controlled Pennsylvania General Assembly.
JM Pedini, development director of NORML and executive director of Virginia NORML, spoke about regulatory models and said that in their capacity as a member of the Virginia Governor’s Marijuana Task Force, “one of our principle tasks was recommending the form and function of the new regulatory structure.”
“I can tell you, having examined this issue in many jurisdictions, the best model is one that utilizes a single, cannabis dedicated regulator,” they said, responding to the idea that the existing medical marijuana program and a new adult-use one could instead be controlled by differing regulatory bodies. “This was the recommendation we made in Virginia based on an examination of best practices in several jurisdictions. And based on that experience, I can confirm that Pennsylvania’s program exhibits the challenges presented when a cannabis regulator is cast into an existing department.”
These Pennsylvania hearings have provided a broad overview of the experiences in out-of-state markets, rather than specific legislative proposals like a bipartisan measure introduced last year by Sens. Dan Laughlin (R) and Sharif Street (D).
Those senators also recently filed introduced a bill that would allow medical marijuana patients to cultivate their own plants for personal use. Street had attempted to get the reform enacted as an amendment to an omnibus bill this summer, but it did not advance.
Meanwhile, Street is behind another recent cannabis measure to provide state-level protections to banks and insurers that work with cannabis businesses.
In the interim, Lt. Gov. John Fetterman (D), who is running for U.S. Senate this year, said one of his key goals in his final year in office is to ensure that as many eligible people as possible submit applications to have the courts remove their cannabis records and restore opportunities to things like housing, student financial aid and employment through an expedited petition program.
Pennsylvania lawmakers could also take up more modest marijuana reform proposals like a bill filed late last year to expand the number of medical marijuana cultivators in the state, prioritizing small farms to break up what she characterized as a monopoly or large corporations that’s created supply problems.
Additionally, another pair of state lawmakers—Reps. Jake Wheatley (D) and Dan Frankel (D)—formally unveiled a legalization bill they’re proposing last year.
Philadelphia voters also approved a referendum on marijuana legalization in November that adds a section to the city charter saying that “the citizens of Philadelphia call upon the Pennsylvania General Assembly and the Governor to pass legislation that will decriminalize, regulate, and tax the use, and sale to adults aged 21 years or older, of cannabis for non-medical purposes.”
Wolf, the governor, said last year that marijuana legalization was a priority as he negotiated the annual budget with lawmakers. However, his formal spending request didn’t contain legislative language to actually accomplish the cannabis policy change.
The governor, who signed a medical cannabis expansion bill in June, has repeatedly called for legalization and pressured the Republican-controlled legislature to pursue the reform since coming out in favor of the policy in 2019. Shortly after he did that, a lawmaker filed a separate bill to legalize marijuana through a state-run model.
A survey from Franklin & Marshall College released last year found that 60 percent of Pennsylvania voters back adult-use legalization. That’s the highest level of support for the issue since the firm started polling people about it in 2006.
An attempt to provide protections for Pennsylvania medical marijuana patients from being charged with driving under the influence was derailed in the legislature last year, apparently due to pushback by the state police association.
Connecticut Lawmakers Discuss Bill To Fund Psilocybin And MDMA Therapy
Photo courtesy of Martin Alonso.
A Connecticut legislative committee on Monday discussed a bill that would set the state up to provide certain patients with access to psychedelic-assisted treatment with substances like MDMA and psilocybin. Former top military officials, advocates and scientists testified in favor of the proposal.
The joint Public Health Committee took oral and written testimony on HB 5396, which would create a psychedelic treatment centers in the state, pending approval of the substances by the federal Food and Drug Administration (FDA) under its expanded access program for investigational new drugs.
The bill would not legalize the psychedelics; rather, it would set up regulatory infrastructure to enable Connecticut to play a leading role in providing access to this alternative treatment option as federal agencies continue to fund and facilitate clinical trials.
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Psychedelic therapy would be specifically provided and funded for military veterans, retired first responders, health care workers and any person from a “historically underserved community, and who has a serious or life-threatening mental or behavioral health disorder and without access to effective mental or behavioral health medication.”
“I firmly believe that we have a duty, responsibility and, more than ever, an urgency to help…all those suffering from trauma to heal and move forward as productive members of our society,” retired Marine Lt. Gen Martin Steele said at the hearing. “I also believe we have failed to do so for a very long time. Reversing these trends require bold but thoughtful and strategic action.”
Meanwhile, Gov. Ned Lamont (D) signed a bill last year that includes language requiring the state to carry out a study into the therapeutic potential of psilocybin mushrooms. A workgroup has since been meeting to investigate the issue.
The new legislation would require the state Department of Mental Health and Addiction Services to launch a “psychedelic-assisted therapy pilot program to provide qualified patients with the funding” to receive MDMA- or psilocybin-assisted therapy as part of FDA’s expanded access program, the text of the bill states.
The pilot program would cease “when MDMA and psilocybin have been approved to have a medical use by the Drug Enforcement Administration (DEA), or any successor agency.” At that point, state statute on the substances would be aligned with the federal government’s.
In the interim, the bill would further establish a Qualified Patients for Approved Treatment Sites Fund (PAT Fund) to provide “grants to qualified applicants to provide MDMA-assisted or psilocybin assisted therapy to qualified patients under the pilot program.”
“Approved treatment sites shall collect and submit data to the Department of Mental Health and Addiction Services, including, but not limited to, its protocols for the provision of MDMA-assisted and psilocybin-assisted treatment, training on the facilitation of such treatment, implementation of facility standards, strategies for patient protection and mitigation of drug diversion.”
The bill would further create a Connecticut Psychedelic Treatment Advisory Board under the department. Legislative leaders and the governor would be empowered to appoint members of the board.
“The guiding rule here is: Let’s get the right treatment for the right patient at the right time,” Stephen Xenakis, a retired U.S. Army brigadier general, said at the hearing. “We need to have a broad array of services available—and now we have the capability to do that with the developments that have come in understanding the benefits that comes from MDMA and psilocybin and other such agents.”
The board would be tasked with making recommendation on the “design and development of the regulations and infrastructure necessary to safely allow for therapeutic access to psychedelic-assisted therapy upon the legalization of MDMA, psilocybin and any other psychedelic compounds.”
There would be seven key areas that the board would be responsible for advising the department on:
- Reviewing and considering the data from the psychedelic-assisted therapy pilot program…to inform the development of such regulations
- Advising the department on the necessary education, training, licensing and credentialing of therapists and facilitators, patient safety, harm reduction, the establishment of equity measures in both clinical and therapeutic settings, cost and insurance reimbursement considerations and standards of treatment facilities
- Advising the department on the use of group therapy and other therapy options to reduce cost and maximize public health benefits from psychedelic treatments
- Monitoring updated federal regulations and guidelines for referral and consideration by the state agencies of cognizance for implementation of such regulations and guidelines.
- Developing a long-term strategic plan to improve mental health care through the use of psychedelic treatment.
- Recommending equity measures for clinical subject recruitment and facilitator training recruitment
- Assisting with the development of public awareness and education campaigns.
Former state Rep. Jesse MacLachlan (R), who now works at the advocacy group Reason For Hope, testified in favor of the legislation. He emphasized the need to “build a bridge of information, of infrastructure, and of more real world application of what this treatment looks like outside of the clinical trial.”
He said Connecticut needs “to be ready for when the FDA does approve MDMA in 2023 and psilocybin in 2024 because, when that happens and these therapies begin to enter the mainstream, there will be a there will be a deluge of patient intake.”
“Yes, we need more federal testing. Yes, we need a lot more information before it becomes something that is widely used,” Public Health Committee Co-chairman Jonathan Steinberg (D) said at the hearing. “But even then, we’re talking about a very narrow context. When I say ‘widely,’ it’s still a very small group of individuals for whom this would be an appropriate therapy, but only by our willingness to push the bounds are we going to find these kinds of options for people.”
Thomas Burr of the National Alliance on Mental Illness Connecticut said in written testimony that, “for too long Connecticut has seemingly been stuck with the standard treatment methods around mental health conditions, with correspondingly lackluster results.”
“We feel that it is far past time to study different, perhaps even unorthodox treatments, that show great promise,” Burr said.
Lynnette Averill of Baylor College of Medicine said in written testimony that the bill would allow Connecticut to “jump start their infrastructure building as MDMA and psilocybin both have a breakthrough therapy indication from the FDA and are expected to obtain approval within the next 2 years.”
It also “allows for [Connecticut] residents to perhaps receive urgently needed care who would otherwise be excluded. For example, many clinical trials exclude ‘complex’ patients as the psychiatric and medical co-morbidities, the medications, the chaotic lifestyles, etc. can ‘muddy’ the data some,” she said. “However, these people are in desperate need of effective interventions and this program would support these individuals in receiving care (of course, when screened and determined to be safe and appropriate to engage in the treatment).”
Also in Connecticut, regulators announced in January that they would start accepting certain marijuana business license applications at the beginning of February.
The news follows a meeting of the state’s Social Equity Council (SEC), where members approved a technical assistance plan for the cannabis industry that will involve outreach and providing resources to people interested in participating in the market. That plan’s finalization was a necessary condition to trigger the start of the licensing process under the legalization law signed by Gov. Ned Lamont (D) last year.
SEC met for the first time in March, just weeks after Lamont signed a marijuana legalization bill into law.
Among other agenda items, the 15-person group approved a list of geographic areas disproportionately impacted by the drug war, which will be used to determine eligibility for social equity business licenses. Under the state’s new cannabis law, half of all licenses must go to equity applicants, who may also qualify for lower licensing fees, technical assistance, workforce training and funding to cover startup costs.
Over the summer, Lamont also announced the launch of a new website to provide residents with up-to-date information on the state’s new marijuana legalization law.
As it stands, adults 21 and older are already able to possess up to 1.5 ounces of cannabis for personal use.
In the psychedelics space, reform is advancing in states across the country.
For example, the Washington State legislature last week sent a budget bill to the governor’s desk that includes a proposal to direct $200,000 in funding to support a new workgroup to study the possibility of legalizing psilocybin services in the state, including the idea of using current marijuana regulatory systems to track psychedelic mushrooms.
A bipartisan coalition of Georgia lawmakers recently filed a resolution that calls for the formation of a House study committee to investigate the therapeutic potential of psychedelics like psilocybin and make recommendations for reforms.
Last week, the Hawaii Senate approved a bill to set up a state working group to study the therapeutic benefits of psilocybin mushrooms and develop a “long-term” plan to ensure that the psychedelic is accessible for medical use for adults 21 and older.
Also last week, the Oklahoma House of Representatives passed a bill this week to decriminalize low-level possession of psilocybin and promote research into the therapeutic potential of the psychedelic.
Rhode Island lawmakers introduced a pair of drug decriminalization bills this month—including one focused on psilocybin and buprenorphine that would authorize doctors to prescribe the psychedelic mushroom.
Also this month, a Missouri Republican lawmaker filed a bill that would legalize a wide range of psychedelics for therapeutic use at designated care facilities while further decriminalizing low-level possession in general.
Last month, Utah lawmakers sent a bill to the governor that would create a task force to study and make recommendations on the therapeutic potential of psychedelic drugs and possible regulations for their lawful use.
An Oregon Senate committee also recently advanced a bill to ensure that equity is built into the state’s historic therapeutic psilocybin program that’s actively being implemented following voter approval in 2020.
A group of Maryland senators recently filed a bill that would create a state fund that could be used to provide free access to psychedelics like psilocybin, MDMA and ketamine for military veterans suffering from post-traumatic stress disorder (PTSD), while also supporting research into their therapeutic potential.
A bill to decriminalize a wide array of psychedelics in Virginia was taken up by a House of Delegates panel in January, only to be pushed off until 2023. A separate Senate proposal to decriminalize psilocybin alone was later defeated in a key committee.
California Sen. Scott Wiener (D) told Marijuana Moment in a recent interview that his bill to legalize psychedelics possession stands a 50/50 chance of reaching the governor’s desk this year. It already cleared the full Senate and two Assembly committees during the first half of the two-year session.
Washington State lawmakers also introduced legislation in January that would legalize what the bill calls “supported psilocybin experiences” by adults 21 and older.
New Hampshire lawmakers filed measures to decriminalize psilocybin and all drugs.
Legislation was also enacted by the Texas legislature last year requiring the state to study the medical risks and benefits of psilocybin, MDMA and ketamine for military veterans in partnership with Baylor College of Medicine and a military-focused medical center.
Colorado officials last week approved the language of two more psychedelics reform initiatives from the same campaign that already passed that procedural step for two separate measures it submitted late last year. A competing campaign filed a different psychedelics legalization last month.
Michigan activists filed a statewide ballot initiative last month that would legalize possessing, cultivating and sharing psychedelics and set up a system for their therapeutic and spiritual use.
A pair of Michigan senators also introduced a bill in September to legalize the possession, cultivation and delivery of an array of plant- and fungi-derived psychedelics like psilocybin and mescaline.
At the congressional level, bipartisan lawmakers sent a letter to the Drug Enforcement Administration (DEA) last month, urging that the agency allow terminally ill patients to use psilocybin as an investigational treatment without the fear of federal prosecution.
Photo courtesy of Wikimedia/Workman.
Politics
VA Won’t Provide Grants For Marijuana Treatment As Part Of Proposed Veteran Suicide Prevention Initiative
The U.S. Department of Veterans Affairs (VA) is making clear it won’t provide support for treatment involving marijuana as part of a new grants program aimed at preventing veteran suicide
In a notice on a proposed interim final rule for the new Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program published in the Federal Register on Thursday, VA said the three-year, community-based effort will “provide or coordinate the provision of suicide prevention services to eligible individuals and their families for the purpose of reducing veteran suicide.”
But while many veterans and service organizations representing the community have repeatedly testified to Congress and federal agencies that cannabis represents a potential treatment option for medical conditions that commonly afflict military veterans returning from service, VA, perhaps not surprisingly, is drawing a line in the sand when it comes to supporting treatment regimens involving marijuana.
It’s “important for VA to note that any approaches and treatment practices approved will need to be consistent with applicable Federal law,” the department said in the notice. “For example, the use of grant funds to provide or coordinate the provision of marijuana to eligible individuals and their families will be prohibited, as marijuana is currently illegal under Federal law.”
That’s despite the fact that there is a carve out for prospective grantees providing or coordinating “nontraditional and innovative approaches…including but not limited to complementary or alternative interventions with some evidence for effectiveness of improving mental health or mitigating a risk factor for suicidal thoughts and behavior.”
The interim final rule is set to take effect on April 11, and public comments will continue to be accepted until May 9.
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Marijuana Moment is already tracking more than 1,000 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
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VA’s position on marijuana has been a source of consistent frustration for advocates and veteran service organizations who have been pushing for expanded research into the therapeutic potential of cannabis.
House and Senate committees held joint hearings this month to hear from veterans service organizations (VSOs) about how Congress and the federal government can better serve their constituents, and several of the groups brought up the need to ease restrictions on marijuana.
The testimony echoes what the VSOs have repeatedly raised with lawmakers. The specifics ranged in scope between the various groups, but the overall message was made clear: military veterans uniquely stand to benefit from marijuana treatment and it’s time for Congress to do something about it.
Separately, military veterans would be “encouraged” to discuss medical marijuana treatment without the fear of losing federal benefits under a new bill being sponsored by Rep. Seth Moulton (D-MA).
The main thrust of the legislation is to codify existing policies that allow VA doctors to talk about medical cannabis with patients as well as protections for veterans who are candid about their history with marijuana treatment. By doing so, it would enshrine these polices into law so that they could not later be changed administratively by future VA leaders.
Congressional Democrats Elevate Marijuana Equity Issues At Retreat Panel Focused On Legalization
