No description of the American marijuana industry is complete without billions. Many, many billions: Billions and billions of revenue, and billions more in projected growth, once more states allow private enterprise to capture what’s still mostly an illicit economy through widespread legalization.
But for all that money, American cannabis has rarely acted like an industry that was supposed to be bigger than the NFL by now, and actually used some of those awesome resources to shape policy.
In 2020, with legalization appearing on the ballot in four states on Election Day today, this appears to be at last changing.
For many election cycles, billionaire philanthropists and social-justice organizations did all the heavy political lifting, plunking down the necessary millions of dollars required to run and win legalization campaigns.
Meanwhile, cannabis companies and industry organizations have spent millions on lobbyists in Washington, D.C., who haven’t been able to accomplish all that much. And without expanded markets, none of those multi-billion-dollar projections splashed across news headlines and in impatient investors’ pitch decks will come true.
Cannabis companies grasp they need larger markets to make more money—and this is the year that they’re finally willing to pay for it.
Some of the country’s biggest cannabis companies are bankrolling the legalization measure in Arizona, public records show.
And while social-justice organizations like the American Civil Liberties Union are still doing most of the lifting in New Jersey, out-of-state capital from the industry—and from ancillary companies betting heavily on making money off of the industry—is also flowing into that state’s legalization campaign.
In Arizona, which already has an established medical-marijuana industry, Proposition 207 would legalize recreational cannabis for adults 21 and over and allow those adults to grow up to six plants at home. It would also allow existing medical-marijuana dispensaries to be first in line to start selling cannabis to all adults—and, therefore, start making many more sales.
According to nearly all polling, Prop. 207 seems a near-lock to pass. That’s good news for the cannabis companies who have paid most of the more than $5.46 million to fund Smart and Safe Arizona, the committee behind the ballot initiative.
Top funders are almost all retail dispensary outfits. These include Harvest Enterprises ($1.2 million), one of the state’s biggest dispensary chains that’s also in the process of expanding to other states; Curaleaf ($400,000), which claims 93 dispensaries in 23 states; Copperstate Farms ($400,000), which runs enormous greenhouses to grow cannabis; Cresco ($300,000), the powerhouse in recently legalized Illinois; and onetime darling MedMen ($200,000), which still has licenses in multiple states even as its investors figure out how to carve up the failing brand’s remains.
Other six-figure checks have come from Colorado-based Cima Group, Maryland-based AMMA Investment Group, and other Arizona dispensaries, most of whom stand to make that money back and then some if they can start selling recreationally—and even more if they can start shipping cannabis legally across state lines.
In New Jersey, Public Question 1 legalizes cannabis for adults on January 1, but not much else. The constitutional amendment does not say who can grow it or sell it. All such details are kicked to the state Legislature, which failed to come to an agreement on legalizing cannabis despite Gov. Phil Murphy’s promises. That failure prompted the need for a ballot measure.
And so while polling suggests Question 1 will also pass, that regulatory uncertainty makes the state a much riskier bet for the marijuana industry—which is letting social-justice organizations do the work.
Most of the funding is coming from the ACLU. Only modest checks are coming from existing state operators like Acreage Holdings, which wrote a $20,000 contribution. Much more is coming from Scotts Miracle Gro, the agricultural supply company, which contributed $800,000 to two separate committees behind the New Jersey measure, NJ Can 2020 and the Building Stronger Communities Action fund, records show.
That makes Scotts Miracle Gro the biggest industry funder in New Jersey—and, it would seem, the second biggest in the country.
Other funders include WeedMaps, the California-based “Yelp of Weed” that makes money advertising dispensary locations and menus, and Compassionate Care Research Institute, which operates a dispensary in Newark, New Jersey.
In the two other states where cannabis may be legalized, Montana and South Dakota, most of the money appears to be coming from political philanthropists and not the cannabis industry.
This is in some ways a sign the industry is maturing—but not quite fully adult yet. Right now, most cannabis companies have common cause. They all want legalization. Only later, when that basic foundation is set, will cannabis firms start working against each other, lobbying for favorable regulation that ices out competitors. That will come later. For now, there are billions of promises to be kept. Compared to that, six-figure investments are cheap money.