Snakes in the Grass: Corporate Cannabis
There are snakes in the grass, they just don’t know what to do in the cannabis industry. Trust me, these corporate investors would exploit the cannabis plant further if they knew how. Luckily, when you back a snakey cannabis investor into the corner they just slither around, carelessly ignorant. They are harmless. It’s rabbits that you have to worry about backing into a corner because they will claw their way out to survive. Rabbits in the cannabis industry are the growers and producers who built this industry from the ground up with their own blood, sweat and tears before legalization and have nothing else to lose except control over the precious cannabis plant itself.
Investors who buy their way into the industry do not have the fight or flight instincts needed to survive such a speculative investment. They won’t know if the investment is going well or not. They won’t have enough cannabis experience to know how to increase profits but will still act like cannabis experts. These snakes in the grass will enter recreational cannabis markets promising Wall Street bets with fast returns. They slither around looking for easy profits, exploiting the local community. Corporate money can be intimidating but their lack of knowledge about cannabis evens the playing field. Around the country, I have watched corporate cannabis investors waste millions on failed edible brands, concentrates and flower grows. We really cannot underestimate how ignorant this type of cannabis investor is. I want to be like the Hank Hill in the cannabis industry: proudly reliable, loyal and willing to do whatever it takes to keep our cannabis medicine burning as clean as Hank’s propane gas does.
Tip: For a cleaner tasting bong bowl or joint hit, try a propane lighter vs. butane. Propane burns cleaner and is known for being flavorless and odorless. 
As we get closer to the Arizona legalization vote (November 3, 2020) there are many questions about what the landscape of legalization will actually look like for the consumer, the entrepreneur and other professionals alike.
I can speak from my experiences in other markets that have gone from medical to recreation and talk about the differences. Most of this is theory and my opinion because no one knows exactly how each market will react and what policies will be prioritized after the vote.
In Denver, the recreational cannabis taxes came as a shock to most cannabis customers and businesses but the money quickly returned to the city in the form of increased revenue towards education budgets, city parks and even custom designed skate parks, roadways and other essential forms of infrastructure. This is an example of a market that we would like to model Arizona after.
On the flip side, the Las Vegas market nearly fell into shambles during the transition from medical to recreational cannabis. Store shelves were left barren after cannabis producers failed to forecast supply and demand properly. They also did not plan for the increased taxes that should have been expected to increase by at least 15%. The increased taxes are paid by dispensary customers which means an 8th ounce of flower can cost as much as $65 or $70. I wish I was exaggerating because we all know that there is no cannabis worth this amount of money. Dispensaries address the problem in the worst way, by increasing supply of lesser quality cannabis in order to make up the profit margins. This is what happened in the Las Vegas market and it showed how unprepared for legalization they were. I remember pounds of trim going for almost $800 a pound and $50 would barely get a medical patient an eighth of mids.
The idea to combat product complacency in the market is to make room for new businesses and licenses while protecting the existing operators in the market. We have to be careful not to turn control of the market over to publicly traded companies who act like they are ready to produce quality cannabis medicine. One fine example of such a snakey company is socialite Dan Bilzerian’s brand Ignite.
Ignite Cannabis raised millions of dollars from its investors and showed substantially less in actual revenue. They “allegedly” sell CBD products and THC products in both mainstream markets and dispensaries across the nation, however, I have never seen their products on any shelves. It’s been reported by Forbes magazine that Bilzerian used the company investment account to fund his own parties, events and his LA mansion that he rents for $200,000 a month. When his board of directors tried to end the lease on the house for the summer because of Covid-19 preventing events, Bilzerian reportedly decided to keep the house anyway. Ignite will have to restructure or dissolve their mess of assets altogether. Ignite is currently listed at $.68 cents per share, which is down from a high of $2.00.
For those wondering who Dan Bilzerian is and how he got into cannabis, I can at least answer the former part of that question. Dan’s father, Paul Bilzerian, was a very well known corporate raider who, in the 1980’s, amassed a fortune by allegedly short-selling and taking over struggling companies. He was indicted by the SEC on federal charges and has been on the run ever since. Now, this man’s trust fund son has decided to sell cannabis. According to sources close to Ignite investors, Bilzerian will slap an Ignite logo on any purchase in order to make it a business expense. Rent a plane, slap a vinyl logo on it. Rent a bevy of models, print logos on their swimsuits. This is his idea of running a cannabis business and it victimizes the legitimacy of the entire cannabis industry.
Other snakes in the grass are the anti marijuana groups who fight actively against cannabis legalization. Anti marijuana advocacy groups are funded by massive corporate Interests such as casino owner Sheldon Adelson. Adelson spent a fortune in his home state of Nevada to fight against legalization and has even donated during both campaigns in Arizona to fight against cannabis legalization. He has spent millions of dollars to fight against cannabis legalization in Florida and Massachusetts also. In his mind, cannabis negatively affects his casino business and he is 100% against the plant. I sure would gamble more if I could smoke a joint in the casino.
Anti-cannabis groups will use the following myths about legalization:
Myth: Cannabis use will increase in teens.
False: Cannabis use in teens has been tracked in Colorado since 2009 and has actually decreased by several percentage points in both boys and girls since then.
Myth: Society will have to pay the public costs of increased drug use.
False: Cannabis will actually help decrease public cost burden from drug use and addiction. For every dollar of alcohol/tobacco tax generated there is more than $10 spent to combat the effects from those drugs.
Myth: The cartels will fight legalization in the US.
False: The cartels are actually pretty sensible business men and if sales of cannabis go down they will turn to other avenues of revenue. I’m not saying the cartels will go away but if the US already has weed then they will not need to send weed. They will adapt and move on to something else just like they always have.
Myth: People are not in prison for small time cannabis use.
False: There are thousands of inmates across our nation that are locked up for simple possession and it’s our duty to keep telling the world about this injustice. Only one person in prison for cannabis possession is a problem that we must resolve. Even when charges are not filed, possession arrests cause undue hardships. Many elderly women have spent time in county jail because of legal CBD.
Myth: Today’s cannabis is more dangerous than what your parents smoked at Woodstock.
False: While it is more potent, thank God, nothing shows today’s cannabis is anymore dangerous. In fact, it is likely much healthier to smoke since 1-2 puffs will get you high as a kite versus 2-3 joints did back in the day. This is obviously an opinion and the jury is still out on what long term psychological effects cannabis produces. Let’s hope science will conduct more research.
Myth: Cannabis companies will market to children just like big tobacco.
False: Every edible must be labeled with the letters THC and packaging must be compliant with child proof standards. It is a stretch to say that because a cannabis company makes lollipops with THC that they are marketing drugs to children. There has been no evidence of this in any recreational cannabis market so far.
Another example of corporate raiders right here in our own backyard would be corporations I will let remain nameless. These corporations come in and acquire dispensary licenses that were once privately owned and change the face of the operation. Oftentimes, they operate under the same name to try and maintain loyalty with the customers but patients quickly realize that the medicine becomes of lesser quality and customer experience goes down hill.
The notorious Med Men bought the Level Up dispensary locations in Tempe and Scottsdale for a combined 33 million. At the time, $15 million was left owed on the sale and Med Men has only paid 3 of the 15 million owed since then. The previous owners have taken Med Men to court and are fighting to retain ownership of their original Level Up dispensaries after the failed buyout. This would mean Med Men loses their capital investment and also the dispensary licenses. Investors have a better chance looking for oil by digging random wells in Texas than working with cannabis companies like this.
It’s important to support dispensaries who are supporting our local community. These are ways that they invest back in their own community and put food on the table with local money. The bottom line is that Corporate dispensaries are taking money right out of our state and that’s what bothers me most. We need a social equity program here in Arizona that requires a percentage of ownership to remain in the community. These social equity programs are meant to offset the detriment caused by drug policing in local communities. In some cases, this equity is just to save face for the corporations but it’s all we can do to keep them accountable for profiting off of medicine grown in our own city. Social equity programs in cannabis are meant to keep the tax revenues generated by cannabis within our own communities to help with education and building infrastructure. To help with programs that will fight against drug addiction and support families.
Watch for snake dispensaries and be careful where you spend your cannabis dollars. There will always be a corporate element in cannabis just like any industry but it is our duty to keep our precious cannabis medicines as clean as possible. I love this plant too much to see it adulterated by snakes who have no conviction for the plant. It’s hard to think of one advancement in the cannabis industry that has come out of a corporate dispensary deal. All the amazing cannabis products that we enjoy today have been cultivated in the underground scene. Let’s be the rabbits in this industry and if we get backed into a corner by corporate snakes then claw the snake’s eyes out. In the end, it will be the growers and sellers who care most about the plant that have the most influence from seed to sale.
Michael Cassini is the founder and editor in chief of The Cannabis Cactus Magazine. He focuses on community relationships with a goal to maintain a culture of love, peace and knowledge in the cannabis industry.
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