On January 16, 2025, the National Cannabis Roundtable (NCR) and U.S. Cannabis Council (USCC) announced their merger to form the U.S. Cannabis Roundtable. This newly combined entity positions itself as the primary voice for the cannabis industry in Washington, D.C., advocating for rescheduling cannabis, passing banking reforms, and implementing state-led regulatory frameworks.
While this might sound like a win for cannabis reform, a deeper look reveals a concerning reality: the consolidation of lobbying power in the hands of a few massive cannabis corporations. This dynamic threatens to entrench regulatory capture, stifle competition, and harm small and medium-sized cannabis businesses (SMBs).
Regulatory Capture: The Real Danger of Centralized Lobbying
Regulatory capture occurs when a regulatory body—ostensibly created to act in the public interest—is co-opted to advance the interests of the very entities it is meant to regulate. The U.S. Cannabis Roundtable’s formation is a textbook example of how such capture can manifest. By consolidating the lobbying power of multistate operators (MSOs) and large ancillary businesses, the group has the ability to shape policy in a way that disproportionately benefits its members.
This is especially troubling in an industry as nascent and dynamic as cannabis. Small growers, independent retailers, and craft cannabis brands—the backbone of local economies and cultural authenticity—are at risk of being squeezed out. When federal policy is tailored by and for large corporations, it’s not designed to address the unique challenges faced by smaller businesses. Instead, it creates barriers to entry and reinforces monopolistic practices.
The False Promise of “Commonsense Cannabis Reform”
The U.S. Cannabis Roundtable’s stated priorities include rescheduling cannabis to Schedule III, passing the SAFE Banking Act, and allowing states to determine their own cannabis policies. These initiatives, while presented as commonsense reforms, come with caveats that benefit larger corporations:
- Rescheduling to Schedule III: Moving cannabis to Schedule III may reduce tax burdens under Section 280E of the tax code and expand research opportunities, but it does little to address the root problem: cannabis’s status as a controlled substance. Moreover, the pharmaceutical-style regulations associated with Schedule III classification could disproportionately favor corporations with the resources to meet stringent compliance requirements. Smaller players, already stretched thin by state-level regulations, could struggle to keep up.
- SAFE Banking Act: While access to banking services is a critical issue for all cannabis businesses, MSOs stand to gain the most. With easier access to capital and lower costs of financial transactions, these companies can expand operations, acquire competitors, and consolidate market share. Meanwhile, smaller operators, often unable to secure competitive rates, are left fighting for survival in an uneven playing field.
- State’s Rights Approach: Delegating cannabis policy to states might sound equitable, but it’s a double-edged sword. Large corporations can more easily navigate and exploit patchwork regulations by deploying their extensive legal and lobbying teams, leaving smaller businesses to grapple with inconsistent compliance standards.
Impact on Small and Medium Cannabis Businesses
The centralization of lobbying power threatens to accelerate the demise of SMBs, which have already been struggling under the weight of high taxes, excessive compliance costs, and limited access to capital. By prioritizing policies that cater to large corporations, the U.S. Cannabis Roundtable risks marginalizing the very businesses that have driven innovation and culture in the industry.
Barriers to Entry
Federal policies shaped by MSOs are likely to include high regulatory fees, complex licensing requirements, and stringent compliance mandates that only well-funded corporations can afford. For example, many small growers and manufacturers lack the resources to navigate federal Good Manufacturing Practice (GMP) standards or the capital to invest in expensive equipment mandated by new regulations.
Erosion of Market Diversity
Craft cannabis businesses contribute to the industry’s rich diversity, offering unique strains, sustainable practices, and community-focused operations. Consolidated lobbying efforts, however, often push for standardized products and practices that favor economies of scale. This homogenization erodes consumer choice and stifles innovation, as small businesses are unable to compete with the cost-cutting measures employed by MSOs.
Uneven Access to Capital
Even with banking reform, small businesses may find themselves excluded from equitable access to financial services. Banks, wary of risk, are more likely to lend to established corporations with proven track records and robust balance sheets. This dynamic further consolidates market power in the hands of a few.
The Role of Advocacy Organizations
By merging, NCR and USCC have positioned themselves as the gatekeepers of cannabis policy. While they claim to represent the industry’s interests, their leadership and membership—dominated by MSOs like Cresco Labs, Verano and Trulieve—suggest otherwise. Advocacy organizations that prioritize the voices of SMBs, equity applicants, and craft operators are increasingly sidelined in favor of corporate interests.
This consolidation underscores the need for alternative advocacy groups to step up and ensure that federal policies do not leave smaller players behind. Grassroot organizations must amplify their efforts to counterbalance the lobbying power of the U.S. Cannabis Roundtable.
Lessons from Other Industries
The cannabis industry’s trajectory bears striking similarities to other sectors where regulatory capture has stifled competition:
- Big Pharma: The pharmaceutical industry’s influence over drug policy has led to skyrocketing prices and limited access to affordable medications. Small and innovative drug developers often struggle to bring products to market due to high regulatory barriers.
- Big Ag: In agriculture, a handful of corporations dominate global markets, dictating prices and practices that disadvantage independent farmers. The push for monoculture crops has eroded biodiversity and left small farms vulnerable.
- Big Tech: In the technology sector, major players have leveraged their lobbying power to influence antitrust regulations, allowing them to maintain monopolistic control while stifling startups.
If the cannabis industry follows these examples, the consequences for small businesses and consumers could be dire.
Additional Challenges: Overregulation and Over-Taxation
The cannabis industry as a whole is already burdened by excessive regulations and taxation, which stifle its ability to lobby effectively. State-licensed operators must navigate a labyrinth of compliance requirements, pay exorbitant taxes, and deal with limited access to traditional financial services. These challenges disproportionately affect small and medium-sized businesses, leaving them with little bandwidth to participate in meaningful policy advocacy.
Allowing only the largest MSOs to dominate federal lobbying exacerbates this imbalance. These companies have the resources to absorb the high costs of overregulation and taxation, giving them a competitive edge over smaller players. By controlling the narrative and pushing for policies that favor their bottom line, they risk creating an environment where only the largest, most well-capitalized entities can survive, further marginalizing the rest of the industry.
The merger of NCR and USCC to form the U.S. Cannabis Roundtable is a wake-up call for the cannabis industry. While the combined organization promises to advance federal cannabis reform, its consolidation of lobbying power raises significant concerns about regulatory capture and its impact on SMBs. Without proactive measures to counterbalance this influence, the industry risks becoming another example of monopolistic control, where innovation and diversity are sacrificed for corporate profits.
The cannabis industry’s success depends on its ability to remain inclusive, equitable, and representative of all stakeholders. Policymakers, advocacy organizations, and consumers must work together to ensure that federal cannabis policy benefits the many, not just the few.
This renewed interest in cannabis industry lobbying is in stark contrast to just a few years ago.
