With many U.S. cannabis executives arguing that federal legalization is only a matter of time, industry insiders and politicians are increasingly focused on how to structure a national marijuana marketplace that is both vibrant and diverse.
To that end, former Massachusetts cannabis regulator Shaleen Title published a white paper last month laying out proposals for how Congress can help ensure the marijuana industry won’t be dominated by multistate operators and national brands.
The paper is titled, “Bigger is not better: Preventing monopolies in the national cannabis market.”
Its publication dovetails with the release of a study from the Minority Cannabis Business Association that found states with limited-licensing programs hamper efforts to promote diversity and inclusion within their marijuana industries.
From 2017 to 2020, Title served as an inaugural commissioner of the Massachusetts Cannabis Control Commission. She currently is CEO of the Parabola Center, a drug policy think tank.
Title also is a distinguished fellow in cannabis policy at the Ohio State University College of Law’s Drug Enforcement and Policy Center and serves as vice chair of the Cannabis Regulators of Color Coalition.
In her white paper, Titled proposed several steps to boost competition in a national industry:
- Permit home grows.
- Prohibit vertical integration by businesses.
- Avoid capping business licenses and prevent individual companies from controlling more than a certain percentage of any market.
- Incentivize states to award business licenses to small or disadvantaged companies.
- Create enforcement mechanisms to control antitrust laws and review mergers for evidence of “anticompetitive” tactics.
- Prohibit any company with a documented history of corporate crimes – such as defrauding the public – from entering the industry.
- Create a federal task force to ensure monopolies aren’t created.
- Authorize states to ban or delay interstate commerce in order to protect existing companies during a transition to a national market.
Title singled out two MSOs in the white paper: Massachusetts-based Curaleaf Holdings and Illinois-headquartered Green Thumb Industries.
She wrote that both had “touted their success” in limited-license states and were happy with such market structures, which prohibit many would-be marijuana businesses from participating in the industry.
A GTI spokesperson did not respond to an MJBizDaily request for comment.
A Curaleaf spokesperson wrote in an email to MJBizDaily that the language identified by Title in its securities filings does not reflect current company values or its approach to the industry.
The spokesperson also pointed to Curaleaf’s “Rooted in Good” corporate program, which is designed to support social equity and giving back to communities.
“We are a very different organization now than we were when we started with one dispensary,” the company said in a statement.
But Title argues that the rise of MSOs is a sign that antitrust issues are timely and must be considered by regulators sooner rather than later.
MJBizDaily spoke with Title about some of her proposals and where she sees the cannabis industry heading.
What was the impetus for this paper?
Marijuana policy and legalization is something that most people agree on.
Regardless of your political ideas, or if you’re a consumer or an activist or business owner, you understand that having a few companies control more than 90% of the market would be a bad thing.
And, yet, even though I think most people agree on that, I don’t think that it’s really been explored.
And I don’t think that the federal legalization proposals on the table right now are very intentional about that.
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Do you feel that monopolization and oligopolies have already begun to take root in the modern cannabis industry in the U.S.?
Yes. I think there are states that have oligopoly-like markets.
And one point I really wanted to make with this paper is I think there’s a misconception out there that federal legalization would fix that problem.
In other words, sometimes people see federal legalization as automatically opening up the market and making it fair. But as proposed, it wouldn’t do that.
Federal legalization won’t solve inequity at the state level any more than state legalization solved inequity at the local level.
You have all these states – Massachusetts was one, California and New Jersey are other examples – where local policy has somewhat undermined state goals.
Similarly, by legalizing marijuana at the federal level, we’re not going to make those inequities disappear.
Where do you see the current industry heading right now?
I see us headed toward a pretty dystopian future.
If policy decisions are led by aspirational monopolists, we’re going to end up with so many mergers, and so much concentration of corporate power, that we’ll lose marijuana culture as we know it.
If we wait until there already is a monopoly that’s acting like Big Tobacco, it’ll be too late. What we have to do is be intentional about preventing it in the first place.
One of your suggestions is a ban on vertical integration. How do you see such a ban playing out nationally?
I don’t know how it would play out. The key point is there are a lot of different ways that you could put sensible limits on how many of each type of license, or how many types of licenses one company can control.
And most states actually have some type of limit like that. So we need federal limits that make sense.
I didn’t set out to call for specific companies to be broken up.
You called out Curaleaf and GTI in your paper. Do you feel that, generally speaking, MSOs and bigger companies are the “Big Industry” enemy to be fought off?
You can’t have social and economic justice without having an industry that is fair in the first place.
And that means that currently, there are companies that fight equitable access for small businesses. Of course, that’s a problem and of course that needs to be called out.
This interview has been edited for length and clarity.
John Schroyer can be reached at email@example.com.