Big cannabis has cozied up to the GOP

Major cannabis companies have donated millions to PACs aligned with President Donald Trump, according to the most recent Federal Election Commission filings. But the donations are not just a symptom of an increasingly pro-marijuana administration; they’re also indicative of an ongoing lobbying war between the marijuana, hemp and alcohol industries.

Over the past couple of months, four major marijuana companies — Verano, Curaleaf, Trulieve and Vision Management Services, a subsidiary of Green Thumb Industries — each gave $2.5 million to America First Agriculture Action Inc., a Trump-friendly super PAC. They weren’t alone in their donations. Ascend Wellness and Arboretum Bidco, two additional major cannabis companies, also gave $500,000 and $1 million to the PAC. Trulieve gave another $250,000 to the Republican Jewish Coalition Victory Fund, a pro-Israel super PAC. 

Taken together, these donations account for the vast majority of the $13 million that America First Agricultural Action Inc. has raised so far this cycle. 

Charles Gantt, who serves as the treasurer for Trump’s major super PAC, MAGA Inc., also serves as the America First Agriculture Action Inc.’s treasurer. Though the industry’s PAC is relatively new, filing its statement of organization in March, it’s already released ads praising Trump’s marijuana policy.

The pro-Trump (and pro-Republican) turn of major marijuana companies marks an odd twist of fate as some of the industry’s biggest players are embracing a party that has been historically hostile to liberalized drug policies like marijuana legalization. Notably, it’s also coming at a time when support for legalizing marijuana is sharply declining among Republican voters.

The main divide in cannabis in the United States comes down to the legal distinction between hemp and marijuana. Though both products are cannabis and are scientifically considered the same plant, they are distinguished legally. Hemp refers to cannabis containing less than 0.3% THC — the plant’s main active compound — by volume, whereas marijuana refers to cannabis with a higher THC concentration.

This minor biological difference has major regulatory implications as marijuana remains federally illegal and hemp has become de facto legal thanks to a provision in the 2018 Farm Bill. Despite the similarity of the products,  marijuana companies operating in states that have legalized the sale of marijuana face significantly higher regulatory and tax burdens than hemp companies. 

The situation is further complicated because the Trump administration has moved to reclassify marijuana as a Schedule III drug, which would keep it illegal, but remove some red tape around research and taxes. Similarly, the psychoactive hemp market is facing an existential threat following a provision slipped into a bill to reopen the government following last year’s government shutdown. 

The modification would close what was essentially a loophole created by the 2018 farm bill, which has allowed for the sale of psychoactive hemp products. This provision, however, won’t take effect until November, which has set off a flurry of activity in the recreational hemp industry to try and save their businesses, as well as proposed legislation that would keep hemp legal. 

The alcohol industry also has a stake in both the legal status of hemp and marijuana. Many in the alcohol industry see their cannabis counterparts as competitors, even as other alcohol companies have themselves entered the cannabinoid seltzer market. 

Joe Gerrity, the CEO of Crescent Canna, which sells hemp-infused seltzers, told Salon that from the hemp side of things, there’s the perception that “Republicans are a lot stronger.” This in part owes to the fact that hemp farmers often live in more GOP-leaning areas, but also because fewer red states have legalized marijuana. 

“The reality right now is [that] Congress isn’t getting anything done and the Trump administration has shown a willingness to move otherwise stagnant issues forward,” Gerrity said. “There’s no doubt it’s politically popular to embrace the cannabis industry from a party perspective, and frankly, it shocks me that we still haven’t seen a Democrat come out of the fold in a leadership position wholly embracing marijuana and pro-cannabis legalization.”

Ryan Hunter, the chief revenue officer at Spherex, a company that sells cannabis infused vape cartridges and other products, said that the current political landscape is shaped not only by the regulatory tangle, but by two individuals: Teulieve CEO Kim Rivers, advocating for the marijuana industry, and Howard Kessler, who champions the hemp industry.

“This is how Trump operates,” Hunter said. “You’ve got to grease the palms — whatever metaphor you want to use — and um so here we are. It’s not surprising to see these large amounts of money flowing into PACs that he’s in favor of. It’s just, unfortunately, how the game is played in this current era.”

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Hunter also called the lobbying a “sign of maturity” for the industry, which is a sentiment shared by other hemp and cannabis businesspeople interviewed by Salon. At the same time, he said, the fact that the same plant is treated legally differently in cases of recreational marijuana, marijuana grown at home, medical marijuana and hemp is a mess that needs to be cleaned up.

“We need to rationalize this,” Hunter said. “There’s no valid reason for the hemp industry to exist. You know, the amount of business that’s being done there, primarily around the beverages. I saw the other day that there were about 1.6  million cases of intoxicating hemp beverages sold last year. When you compare it to the number of cases of beer, which is around 2.5 billion, it’s de minimis.”

How regulatory changes happen, however, is a delicate issue. Josh Kesselman, Founder of RAW Rolling Papers, told Salon that “if Washington gets this wrong, reform could end up favoring the players who spend the most on lobbying while leaving small farmers, independent operators and the people who built this movement behind.”

“This plant should not be handed over to cannabis oligarchs who profit at the expense of everyone beneath them,” he said. “Any real reform has to protect access, protect small businesses, support research and move us closer to full normalization, not create a system where the culture gets pushed aside and the benefits flow only to insiders, lobbyists and billionaires.” 

Morgan Fox, the political director at the National Organization for the Reform of Marijuana Laws, said he doesn’t see comprehensive reform that would bring all cannabis products under a single national regulatory framework in the immediate future.

Fox noted that this sort of legislation already exists, it just doesn’t have the support to pass. He attributed this in part to powerful prohibitionists, like gambling billionaire Miriam Adelson and the Sembler family, whose donations to conservative political causes dwarf those of either hemp or marijuana companies. 

“There’s certainly opposition from very, very powerful people within the Republican Party and within Congress that would make it very difficult to get any sort of legislation to the floor without severe pressure from the president,” Fox said. “I think that that’s relatively unlikely, at least in the near term, unless there’s a chance that it could potentially help him in the midterm.”