The Great Divide

Different visions of medical and recreational cannabis legalization are materializing in numerous states, which could stifle the MJ movement and limit business opportunities

by John Schroyer

Patrick Moran’s biggest concern for the future of the cannabis industry doesn’t involve federal intervention, the difficult banking situation or the patchwork regulatory structure that has emerged across the country. What really keeps him up at night is the infighting between pro-cannabis groups in various states pushing for medical and recreational marijuana legalization, which he thinks could stifle the movement’s growth.

“We’re all coming in from different angles, but we all need to be working together for that purpose,” said Moran, the chief executive officer of Acquiflow – a distributor of industrial agriculture products, some of which are used to grow marijuana – and the head of the Texas Cannabis Industry Association. “Otherwise we will short-circuit what is a good product and a good project.”

Moran’s concerns are shared by a growing number of professionals in the industry and some leading advocates. A fragmented approach to legalization could slow the cannabis movement’s recent momentum and create bad blood between various stakeholders. Campaigns also could turn on each other, which might dissuade on-the-fence voters from backing legalization.

The biggest fear: Competing efforts could torpedo medical and recreational marijuana legalization in several states – especially if more than one measure makes the ballot. That could mean the loss of billions of dollars in potential revenue for the industry, tens of thousands of jobs, and future business opportunities for companies and entrepreneurs.

“The general sense is that having two or more initiatives on the ballot depresses support for all of them,” said Ethan Nadelmann, head of the Drug Policy Alliance, which works in part to change cannabis laws at the federal and state levels. “We don’t know that for a fact, but the expert view is that would not be advantageous.”

The key, observers say, is to focus on finding common ground and coming together as a movement and industry to find a way forward – which in some cases is easier said than done.

Same, But Different

As of June, there were competing groups in at least six states that have their sights set on legalizing cannabis for adult use either this year or next: two in Arizona, at least five in California, two in Maine, two in Massachusetts, three in Michigan, and three in Ohio that would also legalize medical cannabis.

This isn’t exactly a new phenomenon.

Rob Kampia – executive director of the Marijuana Policy Project, which has been a leading force behind many successful efforts to legalize medical and recreational cannabis at the state level – said it’s common to see multiple efforts early on.

The real question is how many measures will actually qualify for the ballot in a given state.

“In any two-year election cycle, there’s numerous initiatives that are attempted to be placed on the ballot, and almost none of them make it,” Kampia said.

In Colorado in 2012, for instance, there were three initiative committees exploring the legalization of recreational marijuana, Kampia pointed out, yet only one measure – Amendment 64 – qualified for the ballot.

But the dynamics are changing, and some observers say the differences between legalization campaigns in various states are becoming more pronounced and garnering more media attention. The arguments over the best structure for legalization also have the potential to be more divisive than they used to be, and in some states observers say there’s a real shot that more than one measure could potentially make the ballot.

Additionally, new players are getting involved in shaping potential legislation. In the past, long-time cannabis supporters, advocates and idealists led the discussion. Now, existing cannabis companies in other states, mainstream businesses and investors with a profit motive are helping to spearhead campaigns, and they’re not always pushing for the same structure as advocates.

Business, Activist Split

In most cases, it’s a matter of differing viewpoints from dedicated activists who share the goal of legalization but disagree on some of the finer points of law that they’d like to see implemented. In other cases, though, it comes down to business interests vs. activism ideology – or even newbies who have no personal or professional affiliation with cannabis but want to get involved in the industry vs. long-time marijuana advocates.

“Generally, the activists and businesspeople agree on 95% of things,” said Christian Sederberg, a Denver-based attorney who deals with both sides on a regular basis and was a driving force behind legalization in Colorado three years ago. “It’s a question of threading the needle. The industry side needs to understand where people are coming from on the activist side. Because those people are going to be the leaders. They’re not going anywhere.”

Ohio and Michigan represent perhaps the most visceral split on the marijuana legalization front.

Of the three campaigns in Ohio, the one by a group called ResponsibleOhio would essentially create a legal oligopoly on the cultivation front, allowing just 10 licenses. What’s more, individuals and companies who donate the most money to the campaign would control those licenses, putting cultivation firmly in the hands of those with deep pockets.

A fourth proposal would have allowed 40 cultivators, but backers failed to gain enough traction to make the ballot this year, and the campaign was suspended in early June. Two other campaigns have a vision of legalization that’s more akin to Colorado, with no caps on cultivation or retail licenses allowable under law. Such a structure would allow smaller players, including mom-and-pop operations, to get involved.

ResponsibleOhio’s proposal is easily the most controversial, but it’s well on its way to making the 2015 ballot. By early June, the organization had already collected well above the roughly 306,000 signatures needed to qualify for the ballot, and the campaign had at least $36 million in resources.

The proposal has created bad blood among those pushing for legalization in Ohio. Many view it as an end-run around legal protections created to ensure an open market and a sign of big business trying to take over the legalization movement. On top of that, there’s been talk of a lawsuit against the measure on state constitutional grounds if it does pass this November.

There’s a similar scenario playing out in Michigan, though it’s not nearly as advanced because the campaigns are all focused on 2016, which means they have more time to refine their language and gather signatures. As of press time, one ballot measure had actually been filed with the state to legalize recreational cannabis, and two others were in the works.

One of the measures in the works will keep business concerns front and center, with almost the exact same approach as ResponsibleOhio.

“Our investors are business people. We want to tax it, regulate it, and create an industry,” said Suzie Mitchell, a co-founder of the Michigan Responsibility Council, the main group behind the proposal. “Some of these people have been in regulated businesses before, and they see it as a good investment.”

Mitchell estimated her campaign needs between $15 million and $18 million to get the measure passed, and the group already has several million dollars in unsigned commitments from investors.

None of that sits very well with the other two organizations pushing for legalization. Matt Marsden – spokesman for the Michigan Cannabis Coalition – called Mitchell’s plan a “big-box approach.”

Matt Abel, a Detroit attorney and a leader of the other organization crafting a legalization measure, doesn’t trust either of the other two groups. He’s also a longtime activist and the executive director of Michigan NORML.

“People resent the Johnny-come-latelies who have done nothing to assist us in bringing this issue to the public forefront, but are reaping the rewards of changing public opinion,” Abel said. “These people don’t even smoke pot. They wouldn’t know a good joint if it hit them over the head.”

Some fear that all three measures could be on the ballot next year. In that scenario, the measure with the most support at the ballot box wins, assuming they all get at least 50% of the vote. But it’s possible none of them would actually pass, as they could split up the vote.

Lack of Unity

In Arizona, California, Maine and Massachusetts, it’s a matter of activist groups that either can’t or haven’t unified behind a single measure yet.

On the West Coast, many observers don’t expect more than a single initiative to be up for a vote next year, simply because of the high cost of qualifying. Those familiar with California’s initiative system estimate that it can cost $1 million or more just to make it onto the ballot. Such a high hurdle typically culls the herd of would-be initiatives.

Still, there’s no guarantee that there will be only one.

The Drug Policy Alliance has aligned with the Coalition for Cannabis Policy Reform (CCPR), which is trying build consensus around a legalization measure. The CCPR is in direct competition with the organization behind the Marijuana Control, Legalization and Revenue Act, which is also working to build a coalition of its own. Both these campaigns stand a real shot at getting a measure on the ballot in 2016, some observers say.

In Maine, a grassroots local group is already collecting signatures for a measure, but it will go up against the behemoth Marijuana Policy Project, which is waiting for the final OK from the secretary of state’s office to begin circulating petitions for its own measure. And it doesn’t look like there will be any reconciliation between the two sides, which are split on several issues, including possession limits and business licensing fees.

The same is true with Massachusetts and Arizona: MPP is forging ahead with a ballot measure, in contrast to grassroots groups in both states.

The intra-movement competition won’t end anytime soon, either. Take Ohio again. One of the grassroots groups, Ohioans to End Prohibition, is already planning on running a different ballot measure in 2016, regardless of whether ResponsibleOhio succeeds this year or not.

“If we get on the ballot next year and pass, it wipes ResponsibleOhio off the books,” said Michael Revercomb, the grassroots group’s political and field director.

That could work, the Ohio Secretary of State’s office confirmed, because both measures are amendments to the state constitution. In the eventuality that ResponsibleOhio fails this year and funds another campaign in 2016 – and if it winds up as a face-off between two or more conflicting legalization ballot measures – then the initiative that gets the most votes would become law (again assuming that both initiatives get at least 50% of the vote).

Bridging the Gap

The competition between all these rival groups is arguably a natural progression for an emerging industry, and along with big profits come big players and big disagreements. The question is how to reconcile the situation for the best possible outcome.

The way to do that, said attorney Sederberg, is through communication and compromise.

Arizona is a prime example. In late March this year, it looked as though a tenuous coalition was about to fracture because MPP, a group of medical cannabis dispensary owners, and a patients’ rights organization couldn’t come to terms. Kampia, the head of MPP, even threatened to spend thousands of dollars to harm one dispensary executive’s business because she took steps to form a separate campaign to legalize recreational cannabis next year.

But all three sides came to an understanding and unified behind a single initiative.

“Everybody kind of reached their tentacles out to everybody they were possibly able to get ahold of, and that was how we were able to re-broker a deal and sit back down at the table,” said Gina Berman, the medical director at the Giving Tree Wellness Center, which runs two dispensaries in Arizona. Berman was the executive Kampia threatened.

“It’s almost a miracle,” Berman said.

Kris Krane, a consultant who played a central role in brokering the talks between the three sides, said there were only a few real points of contention that needed to be ironed out. And simultaneously, he added, “People realized that if there were two competing initiatives, neither was going to pass.”

Though there still may be a second ballot initiative in Arizona, most of the major players in the state have already coalesced behind MPP and its ballot measure.

The type of collaboration that worked in Arizona is also being attempted in California, with many of the various stakeholders involved in ongoing talks.

To the same end, the Council on Responsible Cannabis Regulation was founded last year by Sederberg, Steve Fox and Josh Kappel, all three of whom are concerned about how business and activism in the marijuana movement will be intersecting as reforms continue across the nation. The council acts as a facilitator between interested parties in the marijuana movement, including those in the industry and those on the activist side.

“Our concern going into this in terms of California is that all of these groups obviously passionately want to end marijuana prohibition, but there needs to be an understanding that these ballot initiatives aren’t just ending prohibition,” Fox said. “They’re setting the framework for a regulated system moving forward, so you want to do your best to make it as effective as possible.”

Still, Fox and Sederberg agreed that campaigns like the ones in Ohio and Michigan focusing on major investors and big-money politics were probably inevitable.

“I think it will just become more commonplace over time, for better or worse. This is an industry that’s forming, and there are folks who want to try to make money from it,” Fox said.

That’s not necessarily a bad thing, several industry experts say. Even if some players aren’t happy with how campaigns choose to structure various laws, Fox argued, it’s better than straight-out prohibition.

Regardless, 2016 is likely going to be a pivotal election year for the marijuana movement, for good or ill.

“A victory in California, or a defeat, will have national and even international repercussions,” said Nadelmann of the Drug Policy Alliance.

And that should give all stakeholders even more reason to work together.