As the cannabis industry continues to blossom Stateside, it was only a matter of time until the tobacco industry would drape its overcoat across its shoulders, and knock on doors to try to wet its beak. After years of rumours and whispers within the cannabis industry, during which time Big Tobacco began lining up its pieces, it has quietly gone about the business of making its moves.
Back in December of 2018, Altria, the parent company of leading cigarette manufacturer Philip Morris International, spent $1.8 billion to acquire a 45% stake in the Canada-based Cronos Group, and since then has continued to show intent by adding Cannabis Tech to its portfolio – including the acquisition of patented vaporizers, including the investment of an eye-watering $12.8 billion in JUUL, the nicotine vape product, while at the same time filing applications for proprietary tech. It seems Philip Morris International has long prized marijuana as a potential competitor for tobacco. In 2014, political scientist Rachel Ann Barry quoted internal documents from PMI dated as far back as 1969, in which the company expressed interest in making acquisitions in the marijuana world[i].
To further cement its intentions, Altria began taking aim at the U.S. House of Congress, paying three lobbyists from leading cannabis law firm Brownstein Hyatt Farber Schrek, to lobby the House on tax issues. Altria followed this move by funding lobbyists to push policies related to CBD and non-tobacco excise taxes. It’s safe to say the tobacco giants mean business. Indeed, Altria continued to throw its considerable might behind a push for legalisation when, in January of 2021, the company registered to lobby for “Equitable regulation of cannabis sales in Virginia” where the corporation is based[ii]. Commenting to website Cannabis Wire, Altria spokesman George Parman noted “Altria supports the federal legalisation of cannabis under an appropriate regulatory framework”[iii]
Having clearly thrown its hat into the ring, Altria prepared to start selling tickets by buying the internet domain names “AltriaCannabis.com” and “AltriaMarijuana.com”. This Virginia wolf is already at the door.
An Investor’s Dream?
A force like Altria stepping into the ring looks like manna from heaven for investors. Bloomberg journalist and former managing director of KIT Finance Investment Banks, Leonid Bershidsky, wrote in his 2015 article “Big Tobacco’s future as Big Marijuana” that “Big Tobacco is poised to dominate the legal marijuana market, and for that reason, Big Tobacco may be one of the biggest opportunities of a lifetime”[iv].
While investors may follow the moves of Altria with a keen eye, others are less enthusiastic. Rather than celebrate the might of the biggest name in Tobacco getting behind the push for legalisation, many are sceptical.
Famed Indian-American attorney and distinguished cannabis policy practitioner Shaleen Title, in a must-read opinion piece published April 8th in The Boston Globe, wrote:
“Now tobacco behemoths are pouring billions of dollars into the new legal marijuana industry, seemingly determined to target marijuana consumers and patients as their next prey. We don’t have to let them.”
Ms. Title referred to the 2006 court case where six plaintiffs teamed up to successfully prohibit Philip Morris International from making misleading or deceptive statements concerning cigarettes and their health risks, when she went on to state “Tobacco companies are convicted racketeers who knowingly misled the public with false claims about their products for decades. Most of us can picture it: rich men in a boardroom examining a graph of profits from cigarettes, a product that kills up to half its users, scheming new ways to chemically alter products to be more addictive and new populations to target”[v].
Diving deeper, more examples of Big Tobacco’s sinister playbook reveal a need to firmly oppose their approach. Over the last few decades, the industry has co-ordinated shocking and unethical campaigns in order to scoop up more revenue by targeting vulnerable groups. Title and Andy Tan wrote, “There is an urgent need for policy advocacy to avoid Big Tobacco taking over the cannabis industry and transforming into Big Tobacco 2.0, with lethal consequences for public health. They have systematically targeted marketing of mentholated cigarettes to Black, Indigenous, and People of Color (BIPOC) and LGBT+ populations. RJ Reynolds named one marketing initiative targeting persons experiencing homelessness and gay people in San Francisco “Project SCUM”, reflecting their contempt of marginalized populations[vi].
This is in addition to a history of lies, including manipulating nicotine levels within cigarettes, and marketing cigarettes as light or low tar in order to boost sales and revenues at a time when the health implications of smoking were becoming more widely-known. Philip Morris even went so far as to thumb its nose at no less a standard-bearer than the US Surgeon General, when, in 1987, they released a series of print adverts which featured smokers stating there is “no evidence” that second-hand smoke causes harm, in response to the 1986 Surgeon General’s report which concluded second-hand smoke causes disease and respiratory problems[vii]. Indeed, they will stop at nothing to make money in the face of volumes of well-documented evidence of danger to health posed by their products. One can only imagine what their control of the cannabis industry would mean for consumers, given the evidence of tobacco product manipulation in order to create deeper addiction.
In order to stave off potential monopolisation, several US States (Colorado, Washington, NYC, Illinois) have begun introducing legislation aimed at curbing the inevitable expansion Big Tobacco would seek to push. In Massachusetts, regulators have introduced limitations restricting the number of stores or plants one individual can own – this move would ensure that no individual business can have a greater reach or influence in rulemaking or changing laws on public protection[viii]. Steve Rolles, Senior Policy Analyst for Transform Drug Foundation, backed this step via Twitter (8/04/2021), suggesting that “Limiting the size of market actors would deal with issues of monopolisation/corporate capture and big tobacco by default”.
At present, Government is making the right kind of noises about curbing the reach of the tobacco industry’s involvement, with Senate Majority Leader Chuck Schumer stating that “We don’t want the big tobacco companies and the big liquor companies to step in and take over”. It remains to be seen, however, what action the Government would take in order to back up Schumer’s words.
It remains to be seen just how much influence Altria’s considerable financial power can buy in this fight, or indeed what its intentions are, besides obvious profit motives. But with activists openly beginning to plant their feet in opposition, and Big Tobacco’s track record, it seems certain that the cannabis industry will not welcome their involvement with open arms.
References:[i] https://www.milbank.org/wp-content/files/documents/featured-articles/pdf/Milbank_Quarterly_Vol-92_No-2_2014_The_Tobacco_Industry_and_Marijuana_Legalization.pdf [ii] https://www.forbes.com/sites/chrisroberts/2021/02/09/tobacco-giant-altria-is-pushing-marijuana-reform-on-congress-and-state-lawmakers [iii] https://cannabiswire.com/2021/02/07/altri-maker-of-marlboro-cigarettes-is-lobbying-on-cannabis-sales-in-virginia [iv] https://ticotimes.net/2015/02/22/big-tobaccos-future-as-big-marijuana [v] https://www.bostonglobe.com/2021/04/08opinion/big-tobacco-is-coming-legal-marijuana [vi] https://blogs.bmj.com/tc/2021/04/10/perils-of-the-tipping-point-of-big-tobacco-2-0-taking-over-the-legal-cannabis-industry/ [vii] https://truthinitiative.org/research-resources/tobacco-prevention-efforts/5-ways-tobacco-companies-lied-about-dangers-smoking [viii] https://pubmed.ncbi.nlm.nih.gov/22095331/