How Corporate Cannabis Uses the Dirtiest Plays in Politics to Shut Out Legacy Operators and Home Growers
The principles of a free market economy are those of equal inclusion and potential. Competitive edges are gained through hard work, insight, and strategy—not leg-ups and backdoor deals. Wherever there is widespread leveraging of Federal or State Regulations that benefit only prominent players, an Oligopoly is never far behind.
An oligopoly is a system of big players who can collaborate to increase barriers that new players must pass before entering an industry. They stifle creativity, drive prices up, and grow exponentially in power as their market share does—think of the two or three companies who can afford to run TV spots for beer; you begin to see a picture of where the once-hopeful cannabis industry is headed.
Through the poor implementation of cannabis legislation across the United States, the conditions were regrettably perfect for such a situation to arise. The problem is that in newly leaked documents from the Washington, DC-based lobbying organization “USCC,” we see significant players in pharmaceutical and recreational cannabis seeking to enshrine these advantageous market conditions as future law.
There are two major regions of federal legislation that big cannabis players are angling lawmakers towards—license caps and keeping the status quo in highly profitable “stable markets.”
License caps are a backward approach to allowing cannabis in the market—they designate only a few license holders statewide to produce and sell cannabis. Procuring a license early on meant these lucky businesses could secure millions in funding (or resell opportunities for their licenses upwards of $49 million), near-total market control, and lobbying power that could overwhelm any more minor company.
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Through license caps, those who get in early can flourish. If you’re lucky enough (ie. incredibly well-funded), you might be able to join these big corporate players and compete or join in on the oligopoly as a mutually beneficial enterprise. But if you are a small player trying to run an honest business, you will be laughed out of the door. Corruption takes many forms—from preventive market pressures in the case of early license cap laws to oppressive ones like those this leaked document promotes.
As for enshrining state laws, this makes sense for businesses that are cashing their cheques. Why lobby to fix a system that unfairly benefits you and promotes economic exclusion? In the words of Shad Ewart—an Anne Arundel professor from Maryland with expertise in cannabis entrepreneurship— the USCC “represent clients/members that hold these licenses and therefore it’s their duty…to represent their members’ best interests,” he added. “I just think they don’t ever consider a world without licenses and caps, and therefore everything is written with that in mind and from that perspective.”
Keeping things the way they are in “stable markets” means no danger in upstarts entering the industry and driving competition (or innovation). Stable in this sense means only that income is stable—not growth. Prices can be kept high, taxes punishing anyone but the most significant players, and pockets lined at all the right levels to keep the system behaving as intended! As a cash grab for the ultra-rich.
Beard Bros Pharms believes that an approach that puts Americans first and promotes competition is the only way to secure an equitable future for customers and businesses nationwide. We wholly hope that these forward-thinking documents are left in the past where they belong. Control should belong in the hands of the people, not the corporate lobbying dollars of Washington, DC.
