Cannabis business, and cannabis’ political clout, are growing up quickly

As they work to grow their newly legal industry, many in California’s cannabis business are looking to grow their political clout.
And, at all levels of politics, candidates and backers of many causes are likely to help them do just that.
Rep. Dana Rohrabacher, left, gets a tour of Bud and Bloom dispensary from Kyle Kazan, a partner and board member, in Santa Ana on Friday, May 5, 2017 during a “meet and greet” and Cinco del Mayo celebration at the dispensary. (Photo by Leonard Ortiz, Orange County Register/SCNG)Jeff Bleich, Democratic candidate for lieutenant governor.Christopher Beals, left, President and general counsel, and Dustin McDonald, Vice President of government relations for Weedmaps, the Orange County and Denver based online cannabis community. in Irvine on Friday, February 16, 2018. (Sam Gangwer, Contributing Photographer)Show Caption of Expand
Once quick to say “I didn’t inhale,” California politicians today are quick to accept campaign contributions from donors with ties to marijuana commerce or the drug legalization movement. Since 2001, campaign finance records show, cannabis-connected donors have given more than $831,000 to people running for state offices, with about a third of the contributions coming over the past three years.
But that $831,000 is almost certainly just a fraction of what’s been given. It doesn’t count cannabis donations to local government leaders, or to people running for federal office. What’s more, it’s hard to track every contribution by every marijuana-minded donor.
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With recreational marijuana now legal in California, observers wonder if cannabis will rival labor unions, developers and other traditional sources of campaign cash. Some look to the rise of Indian gaming money — which has become a powerful force in California politics — and see a possible template for cannabis.
“There are some parallels with Indian gaming interests,” said Marcia Godwin, a professor of public administration at the University of La Verne. “In that area, there were large… political donations ahead of the ballot measures that set up the current legal framework.”
Supporters of Proposition 64, the voter-approved 2016 ballot measure that legalized recreational cannabis, pumped $23.5 million into promoting the initiative.
Godwin sees the rise of a new era of cannabis in state politics.
“The first phase mostly consisted of a few wealthy donors, in the 1990s, who supported medical marijuana legalization,” she said. “Next, we had the emergence of more active interest groups that were related to owners of medical marijuana dispensaries. Now, we are moving into more corporate-type donations.”
Godwin and Rick Hasen, a UC Irvine law professor who specializes in elections, see parallels between marijuana and industries like alcohol and tobacco when it comes to campaign donations.
“They depend on government regulation to be able to proposer, so they participate in the political process by throwing money around,” Hasen said.
The fact that marijuana remains illegal at the federal level gives industry insiders more incentive to influence state and local politicians, hoping to sway state and local cannabis regulations.
“It’s just an absolute necessity to get politically involved in this space,” said Derek Peterson, CEO of Terra Tech, an Irvine company that owns cannabis businesses in California and Nevada. “If we’re not politically engaged, they’re not going to see us as a formidable industry that they need to stop and pay attention to.”

Cannabis industry players
Perhaps the biggest cannabis industry player in California politics is Weedmaps, which runs a Yelp-like website that tracks marijuana shops. The Irvine-based company donates tens of thousands of dollars each year to candidates at the federal, state and local levels.
Fighting against marijuana prohibition has been “part of the company DNA” since the startup was founded 10 years ago, said Christopher Beals, Weedmaps’ president and general counsel. Over the past five years, the company has developed a sophisticated lobbying team that drafts white papers on potential regulations, and tries to educate lawmakers across the United States, Canada and Europe.
Beals and Peterson said they generally donate to candidates who’ve been supportive of the cannabis industry so they can encourage them to continue that support and to make their voices heard.
“A big part of it is making sure we have access and we have the ear of policymakers so we can tell them what works and what doesn’t work when it comes to regulations,” said Peterson, who personally gave $30,000 to Lt. Gov. Gavin Newsom’s 2018 gubernatorial campaign. Newsom was a key promoter of Prop 64.
Those efforts aren’t slowing now that California has opened its recreational cannabis market. “There are more issues to be solved going forward than I think are settled,” Beals said, with concern over stringent lab testing standards, limited banking access and more.
Once marijuana businesses in California adjust to the evolving regulations, Peterson hopes to see an upturn in cannabis-backed political action.
“More players in the industry need to put their money where their mouth is.”
State candidates court industry
Candidates for the state’s top elected offices are courting cannabis-oriented money and voters.
During a recent cannabis investment forum in Santa Monica, guests heard a speech from Jeff Bleich, a former U.S. ambassador to Australia and Democrat candidate for lieutenant governor.
They also heard from State Treasurer John Chiang, who is running, as a Democrat, for governor. Chiang, who has been a guest at other cannabis conferences, is spearheading an effort to give the industry access to banking services.
In 2017, Weedmaps contributed $10,000 to his campaign for governor.
In an emailed statement, Chiang spokesman Nicholas Jordan said: “John Chiang is the only candidate for governor working to fill the gaps left by Prop 64. As treasurer, John partnered with our state Attorney General to explore the idea of a state bank with a focus on cannabis.”
California Lieutenant Governor Gavin Newsom, speaks at a visit to a labor union office in Riverside in this January file photo (John Valenzuela/Press-Enterprise/SCNG)
But perhaps the biggest beneficiary of cannabis industry support is Newsom, a Democrat who was the most high-profile figure to support Prop. 64.
In an emailed response, Newsom campaign spokesman Nathan Click said: “Proponents of marijuana decriminalization and criminal justice reform overwhelmingly support Gavin Newsom for governor because, unlike the other candidates, he doesn’t just talk the talk. He helped pass Prop. 64 and is the only candidate for governor who supported all five major criminal justice ballot measures.”
Local lawmakers are key
More so than with most other businesses, local politicians have a great deal of power over how the cannabis industry develops in California.
Prop. 64 gave city and county leaders full authority to regulate the industry within their boundaries. Unless voters pass their own ballot initiative, city council members can decide how many businesses of which type can locate where, set restrictive hours of operation and more. And most cities are so far choosing to shut out the marijuana industry entirely.
A review of campaign finance records filed with city clerks across Southern California show marijuana industry donations at the local level.
In Santa Ana – the only Orange County city that allows marijuana shops – Councilman Vincente Sarmiento received more than $1,000 in donations from the industry in 2015 and 2016.
In 2017, the Santa Ana City Council voted to extend hours of operation for shops, lift signage restrictions and loosen other rules for the city’s dispensaries. Sarmiento led those efforts.
In Compton, where marijuana businesses are banned, HerbalCure Hemp Seed Oil Company donated $500 to City Councilwoman Tana McCoy’s 2017 election campaign.
In cannabis-friendly Culver City, ERBA dispensary owner Jay Handal donated $250 to council candidate Marcus Tiggs.
Long Beach Councilwoman Jeannine Pearce. (File photo by Brad Graverson/Southern California News Group)
Marijuana donors also are rallying around Long Beach Councilwoman Jeannine Pearce, who faces a recall campaign. Cannabis interests are waiting for Long Beach to lift a temporary moratorium on recreational marijuana businesses in the city.
Adelanto, in San Bernardino County’s high desert, was on the brink of bankruptcy when it started embracing the cannabis industry three years ago. This past summer, the city balanced its last budget on a pledge of cannabis industry tax payments.
Adelanto Mayor Pro Tem Jermaine Wright is now awaiting trial after he was accused in late 2017 of accepting a $10,000 bribe from an undercover FBI agent who said he wanted Wright’s help to establish a marijuana distribution business in town.
Patterns of government corruption show that it’s most likely to take place in smaller communities, said UC Irvine’s Hasen, who noted that ever-shrinking media outlets are less likely to keep close tabs on what’s going on in smaller cities.
Such communities also are more likely to be desperate for funds, Hasen said, and to “see dollar signs when they look at the cannabis industry.”
Will cannabis sway elections?
Godwin, the University of La Verne professor, isn’t sure how heavily marijuana – or the industry’s campaign donations – will weigh on voters’ minds.
“There might be a few communities where marijuana becomes a hot spot issue, depending on how much tax revenue is to be gained…  or if problems develop with marijuana stores,” she said.
With a recent Gallup poll showing support for marijuana legalization at a record-high 64 percent, Peterson said he believes candidates who continue to oppose or ignore the industry may be at risk for the first time during the mid-term elections this fall.
He hopes those candidates take notice, both of public opinion and of the money flowing from deep wallets to candidates who support a regulated cannabis industry.
Source: Oc Register