Legal Weed Is Being Ruined By Corporate Greed Weed isn't even federally legal yet, but giant corporations are already ruining it—for consumers, for workers, and everyone, really. JAN 31 https://open.substack.com/pub/moreperfectus/p/legal-weed-is-being-ruined-by-corporate?r=1izlr0&utm_campaign=post&utm_medium=email

 

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Legal Weed Is Being Ruined By Corporate Greed

Weed isn't even federally legal yet, but giant corporations are already ruining it—for consumers, for workers, and everyone, really.

JAN 30, 2024

By Sean Morrow, More Perfect Union

Trulieve, the largest cannabis company in America, controls more than 50 percent of the legal cannabis market in some states.

Along with their two biggest competitors in Florida, they sold enough weed in 2022 to give every Floridian seven joints. You could be using their products without knowing it: they market under a variety of names that evoke small brands or feature celebrity partners like Wiz Khalifa.

Trulieve built an empire by exploiting policy mistakes in legalization, using their power to create more of those mistakes, and taking advantage of well-meaning programs. The giant publicly traded corporation somehow got the only “minority–owned” license for a dispensary in Alabama.

And they’re working on using the same tricks they did in states at the national level, spending big on lobbying in Washington to shape federal cannabis policy.

The Trulieve story shows us what we can learn about how a weed economy shouldn’t be run, and how a good one could be run.

Keep reading below, or watch our new video about this story (part of our Class Room series) here:

In 2014 the Florida state legislature was building out a bill to legalize certain low-THC strains of cannabis for medical uses. The legislation was sponsored by none other than then-state Rep. Matt Gaetz, and backed by Rep. Halsey Beshears (remember that name).

This bill was complicated because it was basically creating the state’s entire legal cannabis industry and how it runs from scratch. It covered regulations on everything from product labels to who can get licenses.

During debates on the bill, an amendment was added by Rep. Matt Caldwell saying that the only nurseries allowed to obtain a license must already have approval to grow “400,000 plants” and have “operated as a registered nursery in this state for at least 30 continuous years.”

The amendment also added requirements for pre-existing real estate ownership and capital, requiring prospective licensees to give the government $5 million in cash as assurance that they could run the business. 

Who could possibly meet all of those qualifications? Well: there was Simpson Nurseries, the oldest nursery in Florida, opened in 1902—and owned by the family of Rep. Halsey Beshears, one of the bill’s major boosters. To meet the qualifications, Simpson entered a partnership with Hackney Nurseries, also run by the Beshears family.

That partnership received one of the just five licenses that Florida gave out after that bill. The merged company would be called Trulieve.

How did the jackpot for the Beshears family make it into law? We have a pretty good idea, because like so many great scandals, there was a total idiot involved. In 2016, a Florida businessman, JT Burnette, was under FBI surveillance while being investigated for a number of possible crimes.

In a call with undercover agents, Burnette bragged that he had “worked through” the bill with Beshears, a childhood friend of his, and convinced him to push “little tweaks” to the bill. Those “little tweaks” were the amendment that broke Florida’s cannabis industry. And Trulieve’s CEO today is Kim Rivers—who is married to JT Burnette.

Florida’s first cannabis law and its largest cannabis business, Trulieve, were built on corrupt, pro-business, anti-worker, anti-consumer, anti-competitive practices by people with only their own interests in mind. And this example is by no means limited to Florida or Trulieve.

“The lobbying for federal legalization currently is dominated by large cannabis companies and large alcohol and tobacco companies,” noted Shaleen Title of the Parabola Center, a nonprofit working to build a more equitable cannabis economy.

And that’s scary because, while Americans overwhelmingly support cannabis legalization, these corporations aren’t actually lobbying for what Americans want. Instead of a diversified weed industry with lots of competition, job creation, and consumer options, the major players are capturing the regulatory process to lock up markets for themselves.

As a commissioner on the Massachusetts cannabis board, Title saw this lobbying firsthand. “You can definitely see these corporations trying to do what, say, alcohol and tobacco corporations have done in the past—where they have front groups, like patients or consumers or workers, claiming to represent their own interests, but in fact, they are representing the corporations.”

Back to Trulieve. In states outside Florida, the licensing structure had also been perverted by people like them, meaning it was very hard for new businesses to move in. This was a problem. But Trulieve had something those other businesses did not: capital and power. So they just started buying existing businesses—and their licenses—in other states.

By 2021, Truelieve was operating in five states through a series of acquisitions and then made their biggest purchase yet, Harvest Health, which gave them 6 more states.

This strategy has been deadly for small businesses because licenses are in such short supply. It has also allowed Trulieve to move toward vertical integration, where companies own or control every part of the process from production to retail—the very same practice that regulators in the 1930s knew would monopolize the alcohol industry.

Trulieve’s size also puts them in a position of power over their workers, who have filed multiple illegal union-busting charges against the company with the National Labor Relations Board. Meanwhile, Trulieve employees are dying from their work. 27-year-old Trulieve worker Lorna McMurrey suffered a fatal asthma attack on the job due to poor ventilation at her cannabis processing plant, an OSHA investigation found. Truleive denied all responsibility, then racked up even more union-busting charges.

In reaction to examples like Florida and Trulieve, some states are getting it right, Title said. New York’s cannabis laws have prioritized social equity, “which means that they gave the first licenses to nonprofits and to people who have been harmed by the drug war.”

The state is also enforcing anti-monopoly provisions against single companies controlling an entire supply chain, and pro-worker provisions that require companies to stay neutral in union drives to get a license. “New York has been a great example of a state that has learned lessons from every other state,” Title said.

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