On hippies vs. suits in the cannabis industry

As marijuana prohibition slowly but surely becomes a thing of the past, the tensions between the radical activists that started the cannabis-freedom movement and the venture capitalists that are looking to cash in on America’s No. 1 growth industry are starting to get bigger.

The biggest clash is usually about intent. To most hardcore activists, the pursuit of money without any sense of social responsibility is a futile pursuit, at best, and a venal pursuit at worst. To the suits, the idea that money isn’t the first and most important concern doesn’t even make sense. Why else would a person start a business unless it was to try to get all of the money they could possibly make by whatever legal means?

This disconnect leads to things such as the makers of Sativex (a cannabis derived medicine that is in the medical-trial phase in many countries) saying they aren’t pro-cannabis legalization, because legal marijuana could impact their ability to make money.

As you can imagine, saying this at a cannabis conference to a room full of people that have seen their loved ones sent to prison for possessing and using cannabis doesn’t go over very well.

The thing is: Capitalism loves a monopoly and marijuana, by necessity, has always been a decentralized industry. Can these two diametrically opposed systems find common ground?

Not yet. A recent attempt by a group of Ohio capitalists to create a cannabis-legalization framework that would allow only 10 investor groups to be in charge of all of the commercial cannabis cultivation in the state has been widely condemned by most cannabis activists in Ohio. Not only that, the attempt to create an oligopoly also has led to a different group trying to get a more fair law passed. But will these dual efforts split the vote and dilute the cause? I suppose we’ll find out this fall.

So, what can be done? I emailed Troy Dayton, CEO of the ArcView group, a cannabis investment firm (www.arcviewgroup.com). The gist of our conversation was that activists will have to fight, perhaps harder than ever, for good and fair regulation.

“As long as we can fight for legislation that offers a fair stake to everyone in the market, then the market will decide whether it buys from people aligned with its values or not,” he explained. He conceded that the caliber and smarts of the “suits” competing for business in the cannabis industry “are getting much sharper by the second.”

“But I know some pretty damn sharp hippies,” he added.

Still, the suits have most of the money and connections. They know how to grease the legislators. And they of course want to make sure that they have every tactical advantage, even before the competition in the marketplace begins. It may not be fair, but it is how business works.

However, the hippies have an advantage or their own: They are already outlaws. If the suits manage to get laws passed that are inherently unfair, there is no guarantee that the hippies and activists will just mindlessly follow along.

The reason the cannabis industry exists is because people were willing to break the law in the pursuit of justice and freedom. Remember, the hippies are the outlaws.