Where the Legal Marijuana Trade Can Set New Industry Precedents

Where the Legal Marijuana Trade Can Set New Industry Precedents

Andrew Lowe

Fair Trade

I used to always see the ‘Fair Trade’ labels on food at the grocery store, but I never really paid them any mind.  I knew that this sort of designation had something to do with ensuring that employers had regulations in place to protect the human/social rights of their workers.  Still, I never fully trusted the label.  I (resignedly) accepted that corruption was a virtually unavoidable aspect of trade; particularly in the agriculture and textile sectors.

In fact, until I started writing this article, I always regarded fair trade in passing.  Child labor, poor working conditions, and little employer liability are unfortunately common practices in many developing industrial nations.  There really isn’t any chance of escaping the stain of exploitation in commercial industry in our daily lives, so it’s often easier to just ignore it.  That’s not an accusation, I do it too.  In all honesty, I didn’t even consider the issue at all until I started working on this article.

The question came up as I was brainstorming how the self-proclaimed ‘ethical and sustainable’ cannabis industry could live up to that claim.  As states fall like dominoes in the journey towards the federal legalization of marijuana, it would be easy for those ideals to be quietly swept under the rug.  There’s no denying the fact that there has been considerable bloodshed due to marijuana prohibition.  Now that cannabis is becoming culturally acceptable to the mainstream across the nation and around the globe, those venturing into the industry must realize that the actions of the budding industry [sorry] will have a profound effect on the future of the industry.

While child labor and directly oppressive working condition are not commonplace in Western Europe and the United States, the marijuana industry (when illegal) unfortunately had a bad reputation in the realm of fair trade.  From literal slavery to rape allegations, the illegal marijuana trade garnered a detrimental reputation.  While incidents of that nature are not at all likely to occur in states where marijuana is not legal, it is important that those in the industry make efforts to change that harsh perception.

By building up a reputation as a respectable and uncorrupt industry, most opponents to federal cannabis legalization won’t even have a leg to stand on.  Fair trade and ethical business practices are the key to demonstrating the feasibility of legal marijuana.  Denver, Portland, Seattle, and Anchorage have a large role to play; these cities are the petri dishes that the rest of the nation is watching.

Tobacco

In February 2014, at the CADCA (Community Anti-Drug Coalition of America) rally in Washington D.C., Robert Kennedy spoke to an audience of over 2,000…  “Let me tell you”, he said, “There is nothing more inconsistent with trying to improve mental health and reduce substance-abuse disorders in this country than to legalize a third drug.”  It’s really a quite logical sentiment… when considering the ways in which alcohol and tobacco manufacturers have drastically manipulated the market.

The tobacco industry has used questionable marketing tactics, failed to alter products in order to remove dangerous/poisonous additive chemicals, and forced third-world tobacco farmers into poverty (click here to learn more about Malawi, a relatively small African nation where tobacco farming constitutes more than 90% of the gross domestic product).  The actual medical danger of cigarettes doesn’t lie in the nicotine itself—it lies in the carcinogenic tar and ash which accumulated from the repeated inhalation of smoke.  Doctors are still divided as to whether or not tobacco-free nicotine products are in fact much safer than or just as harmful as cigarettes.  Regardless, tobacco companies have launched campaigns which claim that these products are more harmful.

There’s little doubt that corruption runs rampant in the tobacco market; corruption that could easily spread to the growing marijuana market unless those venturing into the industry are careful not to overstep their boundaries.  In D.S. Sundaram and Kaushik Mitra’s paper, Ethical Evaluation of Marketing Practices in the Tobacco Industry, some of the issues which could possibly assail the marijuana industry are described at large:

“Ethicality is an issue when marketers target vulnerable consumer segments for products that are viewed as harmful (Smith and Cooper-Martin, 1997). Ethicists are always concerned about businesses actively targeting vulnerable consumers who are susceptible to physical, economic, or psychological harm in market transactions. In the tobacco marketplace, vulnerable consumers may include children, adolescents, and lower income and less educated consumers. Tobacco is considered to be a harmful adult product because of its potential to cause physical (e.g., cause cancer), economical (e.g., monetary cost of consumption), or psychological harm (e.g., feeling of addition to the product). Marketing practices for tobacco products receive considerable attention from both public policy makers and consumers because of the health, safety, and social problems associated with the consumption of that product. Issues that are of specific concern to public are long-term health problems, addiction, and consumption by under-aged consumers. Policy makers are also concerned about the level of annual health-related economic costs associated with smoking, which was estimated to be $157 billion in 1999 (Morbidity and Mortality Weekly Report, 2002). Given the number and magnitude of the issues related to consumption of these products, it is only logical to expect that there will be substantial interest in evaluating how these products are marketed in the marketplace–specifically whether the manufacturers and distributors of these products uphold ethical standards in their marketing efforts.”

I personally believe that the marijuana industry will never stoop to the level of the tobacco industry.  There are however lessons to be learned in relation to fair trade practices and public relations.  Particularly in this current stage of analysis and growth, it is crucial that every effort be made to avoid the appearance of corruption or dishonest business.

As of now, the trouble for medical (and possibly recreational) marijuana growers is the severe pay cut they suffer moving from the black market.  Where illegal growers once worked on commission, entry-level jobs are hardly paying minimum wage.  And those with “prior experience” are virtually unable to use past work on the black market as an asset.  According to the Cannabist, “With the stigma that comes with being a black market grower, an applicant would be better off never mentioning he or she has experience growing and selling their own, and hope that the botanical knowledge they do have helps them rise from an entry-level job to a management position.

Corporate Cannabis

For those living in legal states, it is easy to forget that there are still 46 other states watching to see how the new marijuana industry relates to tobacco and alcohol.  A lot of progress has been made from the anti-prohibitionist standpoint, and now that pro-legal advocates have leverage it is important to show the rest of the population that the marijuana industry is reputable enough to be trusted.  $10-12 an hour is not a good starting place.  If marijuana reaches federal legalization and growing is outsourced to foreign countries, how long will it take for the pay-grade to reflect those in Malawi?

I realize that I am coming across as a harsh critic, especially to those in the marijuana growing industry.  I am not making any sort of accusation as to the ethics of those in the industry; I am simply trying to show potential risks for the future that we must be wary of.  I believe that many people are entering this industry with good intentions—the problem is that in the capitalist business world, people don’t have much power.  What happens when cannabis goes corporate?

It might seem like a silly concept, but it’s already happening.  Cannabis isn’t the same high-risk business venture that it was in 2009; big name investors are already jumping on board.  In May 2014, Forbes author Robert W. Wood began calling for the corporate takeover of cannabis in order to increase revenue from the industry.  In the (near) two years that have passed since then, that vision has started to come to fruition.  And those bringing money to the industry aren’t necessarily cannabis enthusiasts.

Brendan Kennedy of Privateer Holdings recently came to the industry with a $75,000,000 investment.  Heckler Associates, the company behind the branding of Starbucks, has also entered the marijuana industry in an effort to bring a clean and pristine face to legal cannabis.  Peter Thiel, an early investor at PayPal and Spotify, is now entering the industry with Kennedy and Privateer Holdings.  Brendan Kennedy, Peter Thiel, and their fellow corporate sponsors are focusing on a new market strategy which is based around commercial appeal towards a ‘refined’ audience.  As Maxim’s Chris Kornelis put it, “[Kennedy] wants to build the Budweiser of bud.”

For all we know, early big-name investors like these may very well end up as the Zuckerberg’s, Jobs’s, and Musk’s of the marijuana industry.  I would argue that what made those corporate tech giants successful were their eccentricities.  The ability to detach from emotion and seek success at any cost is the foundation of the capitalist corporation.  It won’t be the people which turn the marijuana industry into a shady clone of the tobacco industry; it will be the corporations seeking to dominate the market.

Conclusion

There are three primary parties in the future of the cannabis industry: small dispensaries, corporate cannabis, and consumers.  For small dispensaries, it is important to make the market attractive to newcomers.  Low wages at entry level shouldn’t be the standard.  I understand that many applicants are quite possibly burnouts; however by actually incentivizing higher caliber employees, small dispensaries can avoid the degradation of the industry where the original culture is lost.

Corporations should make an effort to appeal to the original culture.  In all frankness, my concern doesn’t really lie with the practices of corporations—my concern lies with consumers who will be blinded by pretty packaging and creative marketing.  It is the consumer’s (and of course the media’s) role to place checks and balances on the new giants.  Fair trade is more important now than ever.  This is a unique opportunity.

We as the public now have a chance to have a positive influence on a new, major industry with the mistakes of the textile, tobacco, and agricultural industries to view in retrospect.

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One thought on “Where the Legal Marijuana Trade Can Set New Industry Precedents

  • January 15, 2016 at 2:00 am
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    Excellent article, well researched and presented. Keep up the good work. What’s next?

    Reply

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