Trade groups tied to cannabis industry sprouting up rapidly

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By John Schroyer

It wasn’t too many years ago that groups such as the Marijuana Policy Project, the Drug Policy Alliance and a few others were the only formally organized pro-cannabis associations in the United States.

But as the cannabis industry has spread, a variety of marijuana organizations – particularly dozens of trade groups – have cropped up.

Many are reputable but some have more of a self-interest at stake, meaning that cannabis entrepreneurs will want to perform some due diligence before joining.

Some trade groups are more specialized, such as Los Angeles growers, while others are statewide or national, like the National Cannabis Industry Association (NCIA). The growth of trade groups has reached a point where even industry insiders don’t have a good idea how many there are.

“You’ve got to assume 50-100,” said Evan Nison, a longtime East Coast cannabis activist who also runs his own marijuana-centric public relations firm. “Every medical (MJ) state probably has one, on average, and a few have a bunch, like California. And there are a few national groups. It’s not hard to make an industry group. Just think of a name.”

The emergence of more and more trade groups is a logical evolution, given the amazing growth the cannabis industry has experienced in recent years, with states such as Ohio, Pennsylvania and Maryland coming online and markets in Illinois and New York slowly maturing.

Precision Extraction Solutions“As this industry grows up and expands, you’re going to continue to see industry groups and trade groups pop up in different locales,” said Christian Sederberg, a Colorado cannabis attorney who also sits on the NCIA board. “It makes sense to have state groups, but you have differing interests even within the state of Colorado.”

Not all altruistic

As the marijuana industry continues to boom, trade groups will continue to flourish alongside it, and those groups may not all be altruistic.

“There’s a huge land grab in the trade association space,” said Jeremy Unruh, general counsel for PharmaCann, which operates dispensaries in Illinois and New York. “Every lawyer or potential licensee tries to form some sort of trade association or bloc that develops into a trade association. The trick is to figure out which one of those is genuinely going to be influential.”

Nison added that many of the startup groups – as opposed to more longstanding organizations that have established solid industry reputations – are backed by snake oil salespeople.

“A lot of times, like in New York, when medical marijuana passed, we saw a few quote-unquote ‘industry groups’ that were really just opportunistic lobbyists looking for clients,” Nison said.

That shouldn’t prevent those in the marijuana industry from joining trade associations, however, because many of them serve necessary functions, including advocating for reasonable industry regulations when such matters are on the table, either at the federal, state or local level.

“The fact is that this is an industry that needs everything any other industry needs, including representation with the government,” Nison said.

Niche groups

Many such organizations will likely develop more niche specialties, in order to better serve their dues-paying members, said several longstanding industry insiders. That’s especially true in larger markets that have more cannabis businesses and people who work in the industry, said Avis Bulbulyan, the CEO of Los Angeles-based Siva Enterprises.

“What you’re also seeing is little pockets (of trade groups) being set up,” Bulbulyan said. “L.A. alone has four different groups that are set up. You’ve got the UCBA, the L.A. Cultivators Alliance, the L.A. Cannabis Task Force and the Greater Los Angeles Collective Association.”

But there’s a flip side to that level of specialization among trade groups, Bulbulyan said, which is that it’s too easy for industry opponents to divide and conquer.

“Because they’re spread out so thin, no one organization is really able to raise enough capital to further their agenda,” Bulbulyan said. “So it’s actually in the best interests of all these organizations to combine forces and consolidate into one organization, where they can take all the dues and whatever lobbying they do – it’ll be a lot more impactful.”

Do your homework

Sederberg said that in researching trade groups and deciding whether to join, marijuana businesses need to watch for a few obvious red flags.

“What is the experience in the industry of the people at the top level, and how is the organization structured in terms of the board?” Sederberg said. “Is it an open board? Are people open about their membership? Or is it more exclusive and secretive?”

Another thing to keep in mind is that different organizations serve different purposes. While some are simply for networking and sharing ideas, others are focused on different agendas (such as criminal justice reform), or exist only to turn a profit off of trade shows, or are niche-specific – such as the California Growers Association or the National Cannabis Bar Association.

There’s also the question of which trade groups will stand the test of time. Those that do will likely see their proverbial stock rise over the years, alongside organizations such as Marijuana Policy Project and Drug Policy Alliance.

Bulbulyan pointed to Women Grow as one group that will probably be around for a long time.

“Because they’re very focused on furthering women in the industry, and not doing it for a quick return, they’re able to pick up a lot of members across the country,” Bulbulyan said. “The ones that set up with just a 12-month agenda … they won’t. Because once their agenda is irrelevant, they just don’t have the natural evolution into the next stage.”

John Schroyer can be reached at [email protected]

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 6 Comments

  1. Jaime November 23, 2016
  2. Mike November 23, 2016
    • Michael Davis November 23, 2016
    • John Schroyer November 23, 2016
  3. Scott Giannotti November 23, 2016
  4. Oleg MaryAces November 24, 2016

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