Picking up on my most recent article, The Cannabis Cream Puff War and The Role of Trade Associations, I decided to do a deeper dive into the relevant trade associations servicing the cannabis industry (i.e., the cannabis industry represents the combination of the hemp sector and the marijuana sector).
So, let’s first return to fundamentals. A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific industry. An industry trade association participates in public relations activities such as advertising, education, publishing, lobbying, and political donations, but its focus is collaboration between companies. One of the primary purposes of trade groups, particularly in the United States, is to attempt to influence public policy in a direction favorable to the group's members. For example, a trade association may help establish industry standards that protect the public or allow components from different manufacturers to operate together.
But there seems to be an indecipherable narrow focus of these cannabis trade organizations. If the niche is defined too narrowly, you’ll have a hard time getting anything accomplished. And along the way, you might not be following your own purpose or meeting your own goals.
With all of that said, I reached out to a wide array of the trade associations that have been active in the space, and who have been active concerning the so-called ‘civil war’ issues, in particular. It is my opinion that these trade associations reflect the necessary reputation and thoughtful hard work that is required to make a difference in the cannabis (hemp and marijuana sectors, combined) industry. And, as you will see, they are not entirely aligned, but their positions are (mostly) cogent and not blatantly protectionist. So where do things shake out?
I asked three simple questions of the groups to whom I reached out:
Q1. What do you make of this hemp/marijuana 'civil war'?
Q2. What is the trade association's policy/position on hemp derivatives?
Q3. What is the future of hemp and marijuana regulation - do they merge?
Not all groups responded by the time of publication. But those that did provided responses that were thorough and thoughtful; I am grateful to them for taking the time to respond in short order. Regarding the alleged ‘civil war’: cannabis industry veteran, Shanita Penny, of the Coalition for Cannabis Policy, Education and Regulation (CPEAR), says that “[t]his is not a civil war. It is a robust policy debate amongst a variety of stakeholders and Congress about how to address certain derivatives that have become more prevalent since the 2018 Farm Bill.” Fair enough; who doesn’t like a robust policy debate?
Michael Bronstein, also a cannabis industry veteran, of The American Trade Association for Cannabis and Hemp (ATACH), boldly submits that “[t]he ‘civil war’ is a false narrative perpetuated by those who unlawfully produce and sell intoxicating synthetic cannabinoids that do not naturally occur in high concentrations within either the marijuana or hemp plant.” Interesting; but if two sides of an industry are at odds (e.g., here, the hemp sector and the marijuana sector of the cannabis industry are in vehement disagreement and are actively trying to undercut one another through the use of public policy and government affairs), isn’t that tantamount to a civil war; but I can see his perspective.
Recovering politician and industry stalwart, Jonathan Miller, of the U.S. Hemp Roundtable (USHRT), says that “[he] think[s] the handful of marijuana companies who are funding the war against hemp are making an enormous mistake by allying themselves with prohibitionists in their unholy alliance that is reminiscent of the preachers and bootleggers who united in the 1920s to support alcohol prohibition.” Wow! Preachers and bootleggers and an ‘unholy alliance’; sadly not the premise for a new Netflix series…for now. Joking aside — this premise resonates.
Miller goes on to assert that “[n]ot only is this [civil war] devastating to hemp farmers; it’s abundantly clear that it weakens cannabis reform as a whole: Industry disunity undermines key marijuana priorities such as state adult-use referenda and rescheduling and SAFE Banking at the federal level.” This, of course, portrays a distinct perspective on the other side of ATACH, and is insightful. After all, history is an important indicator here, and bigger picture (where are we going?) perspectives are vital. Importantly, Miller refers to broader public policy, and understands that hemp is only one side of an industry.
Broader public policy concerns are very critical here. Aaron Smith, who has been the Executive Director (and is a Co-Founder) of the National Cannabis Industry Association (NCIA) since its 2010 inception, sees the bigger picture as well and submits that “[t]he legalization of hemp-derived THC products was a victory for the anti-prohibition movement and we need to build on that as we push for common sense regulations for these new products, not wage a foolish campaign to return to the failed policies of prohibition.”
Prohibition seems to be a theme here. And Smith seems to call for the uniting of the cannabis industry as a whole when he says “[i]t's disheartening that our industry is fractured rather than working together to advocate for policy reforms that would benefit both hemp and marijuana, especially at such a pivotal moment for us.”
It is axiomatic that unification can and should be focused on the need to push for the federal legalization of all cannabinoids – after all, cannabinoids are merely ingredients, and aren’t most ingredients processed in some form or fashion in all U.S. consumer products? And isn’t the idea of being anti-prohibitionist the proverbial ‘tie that binds’? Maybe, maybe not.
Bronstein appears to call for unity as well, but in doing so, he perhaps unintentionally stokes a divide between ‘natural’ cannabinoids and other cannabinoids that are processed in some form or fashion, by dumping them into the perhaps mischaracterized category of being ‘synthetic.’ He says “[n]ow is the time for industries to come together and call on policy makers to take action to protect consumers and create a legal pathway for natural THC products through full federal legalization.” Even naturally occurring cannabinoids require exposure to processes and various chemicals when utilized; so this begs the question as to where and how we define natural, synthetic, and/or otherwise.
Smith calls the legalization of hemp-derived THC products “a victory for the anti-prohibition movement and we need to build on that as we push for common sense regulations for these new products, not wage a foolish campaign to return to the failed policies of prohibition.” The concept of prohibition again is critical here.
Diana Eberlein, of the Cannabis Beverage Association (CBA), takes a far more diplomatic approach, where she notes that “[w]e [the CBA] [is] agnostic to the origin of the THC in this mission. We believe it is more important that the consumer understand that they are consuming THC, that may cause intoxication, rather than the origin, which impacts compliance and channels to market for the producer/supply chain partners.”
Smith does not make the distinction between natural and other, as he states that “[a]ll cannabinoid products should be regulated according to their use and their potential harms — including hemp derivatives and biosynthetics.” Have we considered that biosynthetics have a place in this robust debate?
The pragmatic Eberlein also states that “[t]here are some unknowns in the current marketplace regarding ‘synthetic’ and ‘converted’ cannabinoids. With transparency, purity, potency, and quality standards that can verify safe use and consumption of these cannabinoids, the CBA will make adjustments to their policies as needed.”
These trade associations have put in the time, effort, and group-think to study these issues and are presumably willing to consider alternative scenarios as well. Kudos to them.
So, what is the common ground here? What do these trade associations agree about?
- “Hemp is cannabis and hemp derivatives that contain intoxicating cannabinoids should be regulated in a way that protects consumers, bars underage use and upholds public health and safety.” -Shanita Penny (CPEAR)
- “Intoxicating cannabinoids naturally derived from hemp and made into final products that are marketed to consumers, in the absence of federal regulation, should be part of a state regulatory system…”. -Michael Bronstein (ATACH)
- “Supply chain transparency is…imperative.” -Diana Eberlein (CBA)
- “We must have common sense rules to ensure product testing, labeling, dosage standards, and age-gating for intoxicating products.” -Aaron Smith (NCIA)
- “[We should focus] states and Congress on necessary regulation that promotes good manufacturing practices, transparent and truthful labeling, and age-gating to keep adult products out of the hands of children.” -Jonathan Miller (USHRT)
If you take these together, there “is a united approach that both sides of this issue should be able to get behind,” as Penny would like to see put into action. Hopefully, this article lets them see that.
What about the future? Do the marijuana and hemp sectors merge or, as I see, do cannabinoids as ingredients become center stage, or “agnostic to the origin,” as Eberlein likes to say?
Bronstein provides the astute perspective that “[a]ny imminent legislation regarding hemp definitely impacts the future of cannabis regulation,” and that “[g]ood operators will continue to ASK and advocate for regulation that enables safe products and ensures the sustainability of the industry.” I agree and agree. However, this position implies that the marijuana and hemp sectors will remain distinct. That said, it is far more likely that a combined ‘cannabinoids sector’ emerges from this rubble, versus these false and arbitrary distinctions.
When considering the future, Eberlein notes that “[i]n the future, we believe intoxicating cannabinoids in finished products will be regulated by the Alcohol & Tobacco Tax & Trade Bureau (TTB) and non-intoxicating cannabinoids will be regulated by the FDA.” I could not agree more on both items. But haven’t the states filled that void left by federal government inaction/tediously slow rollout thereof?
On this notion of what the future holds, Smith makes an excellent point in that “[u]ltimately all cannabis products should be regulated according to their intoxicating cannabinoid content and intended use, regardless of origin.” Importantly, he goes on to say that “[l]ow dose products produced in accordance with state and federal standards should be able to share the shelves with beer and liquor.” Smith nicely summarizes the concept of low does THC products and high dose THC products in the marketplace, which I think becomes the distinction between de-scheduled compounds and Schedule III compounds.
And Miler predictively notes that “[i]t is inevitable that marijuana will be legalized, although it could be several years before that occurs.” I could not agree more with Miller n that point. “In the meantime,” he says, “we support the regulated retail sale of hemp products and oppose efforts to force all hemp products into state dispensary systems.” Let’s not forget that even the marijuana sector would like to sell its wares outside of dispensaries (e.g. convenience stores, events, etc.) for a laundry list of reasons. To that end, isn’t the sale of hemp products a backup plan in the event that marijuana sector operators fail to comply with the rigid forthcoming Schedule III requirements if they want to be federally compliant? Another question worth considering…
Future visions differ, but much common ground exists. So, what about the divide? The divide can be loosely summarized as: (1) Hemp vs. Marijuana; (2) Low Dose v. High Dose; (3) Prohibitionist vs. Anti-Prohibitionist; (4) De-Scheduled vs. Rescheduled (Schedule III); (5) Natural vs. Processed/’Biosynthetic’; and, (6) Where to sell intoxicating compounds: broad distribution vs. limited dispensary outlets. And these are the issues that will ultimately result in a compromise, which is where the common ground will be created. Because in politics, no ones gets their way; no one ‘wins’; compromise is the key to all of this.
That said, more efforts towards finding common ground on these ‘divide’ issues will result on a cogent overall cannabis policy that is focused on cannabinoids and mainstream commercialization, not esoteric, intrastate, narrowly-focused, single purpose sales outlets. And I know that such common ground can be found. After all, these are smart, thoughtful people at the helm of these trade groups.
In conclusion, I want to thank these associations for actively providing their relative positions and insight. And I unabashedly applaud the hard work and dedication of these groups, their leaders, and the active participation of their respective (and often overlapping!) membership. But, amidst the calls for unity, why aren’t they talking more? Why aren’t they forming a broad-based coalition to advance the common threads (above) and to fight against the prohibitionists?
In the meantime, virtual commissars and pinstripe bosses roll the dice. Anyway they fall, guess who gets to pay the price? Because if the game is lost, then we're all the same; with no one left to place or take the blame, but for those driving cannabis industry policy. Only time will tell.
