Cannabis industry prepares multi-million dollar war chests for Washington

Mar 15, 2019

Two major trade groups representing the cannabis industry, the Cannabis Trade Federation and the National Cannabis Industry Association, have a combined total of more than $3 million in their war chests. The money is set aside for the purpose of pressuring Washington D.C. lawmakers to end the federal prohibition of marijuana.

CTF is said to have more than $2 million, while NCIA has $1.3 million set aside for lobbying and "public affairs". Interestingly, although both groups have expressed their support for a variety of federal cannabis legislation, each has been talking up a different bill. Both are expected to push for Senate committee hearings and a potential Fall 2019 vote on the Senate floor for their team’s bill. That is according to the producer of Denver-based CBOutlook trade seminars Dr. Lloyd Covens.

Dr. Covens, who is also the editor of West420 Newsweekly, asked in his recent industry intelligence report, “Is this D.C. positioning spilling out into a full-blown industry division . . . potentially setting up two competing messages to Congress on how best to arrive at national legalization?” According to Covens, both claim they are “the most representative of best outcomes for leading legalization efforts.”

Neil Levine, CTF organizer and former NCIA board member, has said, "We want to bring as many allies together as possible to pool the resources necessary to pass the STATES [Gardner/Warren] Act." A CTF white paper covering the STATES Act can be found here.

Levine has recruited 24 cannabis mega-companies—each paying $100,000 for a seat at the table. $2 million of that is being used to hire D.C. heavy hitters like Brownstein Hyatt Farber, The Raben Group, Navigators Global, and Jochum Shore & Trossevin. Levine has also recruited an internal team, which includes cannabis politico Heather Azzi, recently-defeated Republican Florida Congressman Carlos Curbelo, and Joe Brezny who led state trade group efforts to bring Nevada's cannabis system into reality.

According to NCIA spokesman Morgan Fox, that trade association has now surpassed 2000 members with a total annual budget of $3.4 million. Memberships average $1000 per year. The organization also produces several regional trade shows, which contribute another $1.3 million to the war chest.

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“NCIA called the Booker Bill ‘the most far-reaching and comprehensive cannabis policy reform legislation being considered in Congress,’” Dr. Covens told PotNetwork. “But CTF thinks the STATES Act has a much stronger chance of support among conservative-leaning U.S. Senators.”

Last month Oregon Rep. Earl Blumenauer laid out his plan for national decriminalization in bill HR-420. Companion SB-420, introduced in the Senate is sponsored by Oregon Sen. Ron Wyden.   

On Feb. 27th, New Jersey Sen. Cory Booker re-introduced his signature Marijuana Justice Act which focuses heavily on social justice, including the automatic expungement of prior cannabis convictions across the country.

The social justice provisions do not exist within the STATES Act proposed by Colorado Sen. Cory Gardner. Gardner has repeatedly hinted his bill has the support of President Trump—assuming it survives long enough for a Senate floor vote.

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All federal cannabis bills face opposition from Republican Senate Majority Leader Mitch McConnell of Kentucky. McConnell holds the key to allowing any votes in his chamber. If the bill gets by McConnell, more than 12 Republicans are expected to vote in favor of passage.

The outstanding difference between Booker’s Marijuana Justice Act and the other bills is it’s big brother approach. While HR-420 and the STATES Act layout measures designed to simply take cannabis regulation out of the hands of the feds and put it into the hands of the states, Booker’s bill enlists the Federal government to play a role in the oversight of state cannabis programs and the doling out of funds to states depending on their social justice records. This federal oversight approach is expected to be unpopular among Republicans, greatly reducing its chances of passing through the Senate.

California's Rep. Barbara Lee, the lead House sponsor of the Booker Bill, told fellow congressional members, "For those communities that have been economically and socially disenfranchised by over-criminalization and cyclical incarceration, this legislation provides funding to programs focused on youth development, citizen re-entry, job training, health education, and funding for community resources such as public libraries and community centers."

On separate tracks, House-originated bills for veterans' access to MMJ, clinical research funding, and cannabis banking reform may all be heading to the Senate in the second half of 2019. The SAFE Banking Act was the focus of a recent House hearing and seems to have bipartisan support.

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“It remains difficult to say if the two trade groups—which both express support for the Booker, Wyden, and Gardner bills—will join forces to back a combined federal act, or to fight between themselves for lobbying pre-eminence,” says Covens.

According to Covens, early in 2017, the formation of a predecessor organization to CTF “exposed a deep rift between Levine and NCIA director/co-founder Aaron Smith.” Covens continues, “In 2016, Smith orchestrated Levine's ouster from the NCIA board, and Levine subsequently gathered support for the competing trade group from founders who included Scotts' Miracle-Gro, Privateer (who has withdrawn from both groups), Dixie, LiveWell, Native Roots, Tryke Industries, Keef Cola, and Medicine Man. New CTF members include Cresco Labs, Pax, FlowHub, IAnthus, Green Thumb Industries, and Vicente Sederberg.”

At NCIA, board members include executives from Harborside Health, EdenLabs, MJ Freeway, SPARC, Berkeley Patients Group, FlowKana, and several legacy law firms.

Although NCIA activities are mostly centered on California, both the CTF and NCIA see value in working to bolster efforts to legalize cannabis at the state level, as well, and have mentioned plans to become more active in lobbying to push state marijuana legislation over the goal line.

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