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We have nothing to worry about from the corporatization of marijuana, and the big-money takeover that represents, according to a major new report funded by — get this — the billionaire Koch Brothers.

While it isn’t surprising that these wealthy advocates of corporatocracy would advocate that their business model be used in marijuana the same as it has been pretty much everywhere else in the American economy — and equally unsurprising that their conclusions would be credulously accepted as the Final Word by the corporate-controlled press, i.e., “demolished a huge fear about legal pot” (very disappointing, Chris Ingraham) — it is quite disappointing to see their sham report covered, straight-faced, with no background as to its funding and motives, in the cannabis press, of all places.

Worry about bad marijuana — not Big Marijuana,” reads the headline of a Brookings Institution report released last week. The report was written by two senior fellows in governance at Brookings, John Hudak and Jonathan Rauch.

The Koch-funded report takes the stance that the well-founded concern expressed by many artisanal cannabis cultivators, medical marijuana advocates and patients, and mom-and-pop dispensaries and ancillary businesses associated with the culture — that is, that big money means the price of entry to the cannabis industry rises beyond the means of everyone but the wealthy — is unfounded.

Big money running the show is just fine, according to the authors of this report. Corportization, according to Hudak and Rauch, often leads to more responsible practices among businesses.

Are you ready for some rich, rich irony? “The best regulation is the one that doesn’t need to be imposed, because reputational accountability or market pressures solved the problem first,” Hudak and Rauch write, apparently completely unaware that they just described Washington’s medical marijuana industry, which has happily existed with almost no governmental oversight since 1998.

“Of course, for many decades, the marijuana industry has been in the hands of profit-driven business enterprises — criminal ones,” we are darkly informed by the report. One must assume the authors of the report felt that all the corporate malfeasance which has been unearthed since the unseemly crash of the American economy a few years ago is considered acceptable and “business as usual” since they seem OK with defining years of marijuana distribution, which fills a real and human need, as “criminal,” whilst accepting predatory corporate practices as “licit.”

“Corporatization, though not without its hazards, has considerable upsides,” we are helpfully instructed by Hudak and Rauch. “It brings advantages in terms of public accountability and regulatory compliance, product safety and reliabaility, market stability, and business professionalism.”

Who should control medical care: individuals or profit-focused corporations? []
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Who should control medical care: individuals or profit-focused corporations?

They must be speaking of the kind of “public accountability” that means corporate Washington state marijuana growers are allowed to use more than 200 pesticides under the stage’s regulations — and that weed routinely hits the shelves of recreational cannabis stores without ever having been tested for a single one of them. Mighty convenient when the corporations have input on the regulatory structure, don’t you think? How very “responsible” of them.

“Opponents of market consolidation [emphasis added] worry that the cannabis industry could fall under the control of a few macro-corporations that create substantial social costs while hiding critical information from the public and manipulating and deceiving regulators,” the authors tell us, unwittingly coming close to providing a playbook for the implementation of recreational legalization in Washington state as it has actually unfolded.

If anyone who reads the Koch-funded report is remotely tempted to believe that “public accountability and regulatory compliance” are improved by big money running the marijuana business — the same big money, mind you, that funded “campaign contributions” to the politicians who wrote the rules for the nascent industry — you need only talk to medical marijuana patients in Washington state, who were thoroughly and vigorously screwed by the “folding in” of medical into the recreational market. (Said “folding in” was accomplished by obliterating the competition, i.e., I-502 merchants got exactly the law for which they paid.)

Just to illustrate how avidly these merchants go after every single penny they see on the table, something called the “Washington Cannabusiness Association” (WACA) actively lobbied and killed a bill which would have allowed Washington adults to grow their own marijuana — because that might mean they buy less of the overpriced, underpowered, pesticide-laden weed at the I-502 stores. (Side note: When I called — on Facebook, not in the magazine — for a boycott of the member businesses of WACA for opposing home grow , WACA had me fired as a writer for DOPE Magazine, for my impertinence.)

Some things are so obvious that they can’t be glossed over, even by partisan, paid-for propaganda such as this report. And one of those oh-so-obvious facts is that the corporatization of marijuana raises the price of entry to the industry to such an absurdly expensive level, only corporate entities and the very wealthy can afford to participate.

Indeed, regulation imposes compliance costs and procedures—legal representation, paperwork, inspections, testimony, lobbying—that tend to drive industry toward consolidation, not away from it.

Using Big Tobacco as an example, “The barriers to entry are immense and stacked in favor of existing tobacco companies that have extensive records detailing their earlier products,” according to Reason‘s Jacob Grier. “If someone wanted to encourage the emergence of Big Marijuana, tobacco-style regulation would be a good way to do it,” Hudak and Rauch admit.

“When a market consolidates, there is greater opportunity for a few firms to withhold key information and systematically manipulate the information regulators receive,” the authors grant. “In addition, elected officials may be swayed by industry donations to political campaigns, and bureaucracies may become dependent on industry revenues.  Through those and other avenues, powerful corporate interests can wield disproportionate and potentially insidious influence on regulation.” The authors grudgingly conclude such regulatory capture “remains a risk, and is to some extent inevitable in any regulated industry.”

Among patient advocates, “concerns abound that consolidation of the marijuana industry will reduce the availability or quality of specific products and strains, increase the price of medicinal cannabis, or degrade the overall experience patients have in the medical marijuana system,” the authors admit. “Many also worry that the distinct recreational and medical systems will be merged, to the detriment of the minority of users who rely on cannabis for therapeutic benefit.” (Before recreational marijuana, there were close to 200 dispensaries in Seattle; now there are only about 20 I-502 rec shops. The deadline for closure of all medical dispensaries without I-502 licenses is July 1, 2016.)

“One way large marijuana businesses might reduce competition is through the support of specific regulation, as has happened in the tobacco industry, among many others,” the authors admit. (Ya think?) 

“[I]t seems plausible that commercialization will have a homogenizing influence on the industry’s distinctively countercultural ethic and will squeeze out individualistic but inefficient operators,” the report states, displaying a keen grasp of the painfully obvious. “We leave it to the reader to determine how troubled to be by those prospects, but neither, in our view, should be a preoccupation of public policy,” they loftily sniff from their ivory tower.

It’s almost as they’ve been watching Washington.

But this isn’t rarefied theoretical shit, here, folks; it is already happening, in a major way, in Washington state. If you want to see what happens to patient access and affordability when the system is tilted in favor of recreational profits — even to the extent of outlawing the alternative, a compassionate medical marijuana community based on sharing both knowledge and medicine — you have a real-world human tragedy playing out in Washington, right before your eyes.



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