Trade groups tied to cannabis industry sprouting up rapidly

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.

“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]

6 comments on “Trade groups tied to cannabis industry sprouting up rapidly
  1. Jaime on

    Thanks, John for bringing this issue up. I’m afraid that there exists too much of an opportunistic and/or criminal element that gravitate toward forming these kinds of associations as it relates the MMJ industry. They form these associations under the color of a “grassroots”, “transparent”, “community oriented themes” as the main drivers of their association, when it turns out, they’re anything but. What they do instead, is seriously do harm to the cause/movement for that particular region ( Ca. in my case ). All because the nucleus of that group had it in for themselves first and foremost. In my case, not only did they misrepresent what they were truly about; they were inconsistent with the tenants of a local ordinance they had drafted, that was supposed to align with Ca.’s new state law around the reg. of MMJ ( MRSA ). In addition, this core group of people omitted ( during association meetings ) what would have been major downsides to many of the members, had they known about it. If someone brought up an issue that got close to something the core didn’t want to discuss, that person was not given a straight answer or just simply ignored. Had most of the membership been made aware of the profound negative implications to their farming and other ancillary businesses, they probably would have not supported it in the first place ( the final ordinance as drafted ). Interestingly, a lot of the negative parts of this ordinance were special interest generated. Within a grassroots purported framework! A smokescreen. And these days, when a special interest(s) steps in quietly, with no real discussion among members of that association….even if those members are relegated as “inner circle” members ( by the amount of dues they have paid ); it usu doesn’t mean anything good for the vast majority of that membership, let alone that particular community at large.

    In this case, the ( really ) flawed ordinance thankfully failed by a significant margin on Nov. 8. What did this accomplish?

    1 ) It wasted a lot of people’s time and money.

    2 ) It dashed the hopes of those ( likely misinformed/misled ) that thought that this was really a good thing for them and the community.

    3 ) It informs either directly and/or indirectly the local govt and other like power brokers what this association is “really about.” It makes fools out of/disheartens those in the MMJ camp that desire a reasonable and clear local regs. As opposed to those that are opportunistic and self-serving, at the expense of the majority.

    4 ) It makes it that much more difficult to attempt to regulate by association driven agendas, esp. when the leadership continues to emanate from the same lot for years on end. To the point that it may have permanently shut the door on itself to be taken seriously ( by the community/local govt. ) for anything that is ever drafted by any like association, ever again.

    5 ) It diminishes that association’s bargaining power, ( as it relates a chronic loss of credibility ) if opportunities were to present themselves to negotiate with local govt. ( as opposed to repeated failed referendums/initiatives ) to come up with reasonable/equitable regs.

    All because of a few self-serving bad apples that pretended to be something that they were not. Wolves in sheep’s clothing. And these kind of people really don’t give a damn. But the rest of us should.

    Reply
  2. Mike on

    John,

    I appreciate you writing this story, BUT how can you right a story about trade groups in the cannabis industry and not even mention NCIA, THE National Cannabis Industry Association?? They have been around for YEARS, have over 1000 members that represent ALL aspects of the industry, AND have a democratically elected board made up of respected cannabis reformers??? They are an important part of this national discussion going forward.

    I agree there will be an explosion of trade groups out there, especially at the state level, but you are doing your readers a disservice by not even mentioning NCIA in passing.

    Reply
    • Michael Davis on

      Yes, I agree that the NCIA is the standard for representing cannabis to both the federal and state governments. The basic purpose of any group should be discerned before joining a group as to their intentions.

      Reply
    • John Schroyer on

      Mike,
      You’re absolutely right that NCIA deserves to be noted in this story. The feature has been updated to reflect that. Thank you for the feedback, and thanks for reading.

      Reply
  3. Scott Giannotti on

    Cannabis and Hemp Association, NYC, Albany, Maine, Massachusetts, Puerto Rico, and a Michigan chapter coming soon. We’re sponsored by the Hoban Law Group, The Incredibles Colorado, CannaKorp, and more.

    Reply
  4. Oleg MaryAces on

    Cannabis and Hemp Association has been monumental in uniting Superstars and future Superstars of the Cannabis Industry. The level of education about The Plant and The Business provided by this Association is UNMATCHED. I recommend that you to catch up with it.
    Best regards! 🙂

    Reply

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