Opinion | Common Ground: Political Unity Around Federal Cannabis Prohibition Relief

Benzinga Cannabis , Benzinga Contributor (Originally published on Benzinga Here)

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By J Smoke Wallin

In 1925, five years into Prohibition, journalist H. L. Mencken wrote, 

“There is not less drunkenness in the Republic but more. Not less crime, but more. There is not less insanity, but more. The cost of government is not smaller, but vastly greater. Respect for law has not increased but diminished.” 

Prohibition turned law-abiding citizens into criminals and enabled and empowered organized crime. It would take another eight years for the repeal of Prohibition, with the enactment of the 21st Amendment, paving the way for a set of local option laws and regulations, state by state, known today as America’s beverage alcohol system. While imperfect, the state by state system has functioned well for over 85 years.

Around the time of Prohibition’s repeal, another Prohibition went into effect: cannabis. The Marijuana Tax Act of 1937 eventually made a plant used in medicine, and available recreationally for thousands of years, illegal. Again, this turned otherwise law-abiding citizens into criminals, enabled and empowered organized crime, and also denied countless patients suffering from a wide range of ailments, including cancer, access to a plant that could help them. 

Today, 33 states have some form of medical cannabis provision, with 10 implementing adult recreational use. More are drafting legislation regularly. The 2018 Farm Bill took the non-psychoactive form of cannabis “hemp” out of the hands of the DEA and into the Agriculture Department, paving the way for legal hemp and hemp-based CBD and other extracts for national production and consumption. This is progress—and it is only the beginning.

There is reason to believe the time is now to decriminalize cannabis federally and end the conflicted issues inherently present. While common ground seems impossible to find politically in 2019, there is a sensible center that has always existed and still exists today. Cannabis Prohibition repeal may be one of the few unifying issues one can hope for in Washington today. Here is why I believe it is possible with our current state of divided government.

States’ Rights: Conservatives can be against cannabis reform but still agree to it based on the strong principle of states’ rights. One of the core principles of modern-day conservatives has been a commitment to states’ rights. This goes back to the founding fathers’ expressed interest in limiting the size and scope of the Federal government. While the scope of the Federal government has increased dramatically over the years, there is still a strong expressed interest in decentralization on a whole host of issues, including education and healthcare. Anyone holding these beliefs ought to be persuadable that 33 states and counting were not wrong. They have expressed the will of their citizens. One only needs to listen to U.S. Senator Cory Gardner (R-Colorado) as he fights for his state’s right to regulate legal cannabis — when he originally voted against it. If the GOP intends to keep the Senate in 2020, their members will need the opportunity to support repeal.

Wellness: As Todd Harrison of CB1 Capital says, “Cannabis isn’t about getting high; it’s about getting well.” While US research has been stymied by Prohibition, anecdotally, the evidence is abundant. Whether it be a cancer patient coping with the effects of treatment or a child with epileptic seizures, one cannot argue there are benefits to this plant.

Cannabis clinical trials are underway in Israel and Canada. Large scale university-based research is in the early days (and due to the prohibition, have been disallowed in the U.S. thus far). However, since the 2018 Farm Bill was signed into law last year, cannabis without THC, legally known as hemp, is not under the purview of the Agriculture Department. Cannabinol or “CBD” is one of the components in the cannabis plant and is showing great promise in treating a variety of conditions. It is now in the FDA approved medicine for Epilepsy Epidiolex. Its number one characteristic is as an anti-inflammatory followed by pain relief.

I personally was able to give up Advil through the use of CBD for my minor aches and pains. Additional possible indications for CBD products include autism, psychiatric conditions, diabetic neuropath pain, fibromyalgia, chronic pain, and back pain. Clinical trials in these indications are underway; however, excluding THC from these studies makes zero scientific sense. The scientists committed should immediately be allowed to study the full cannabis plant in all its possible applications. Public demand is at an all-time high, and burying our heads in the sand scientifically is a disservice to the public.

Opioid Epidemic Overall And Loss Of Veterans: Over 50,000 citizens died in 2018 from some form of opioid incident. Cannabis has been shown to enable people to manage their chronic pain without the harmful side effects of opioids. The current approach is not working. We lose 22 veterans a day to suicide in this country as they cope with PTSD and the subsequent meds prescribed by the VA. I personally know veterans who were on the verge of suicide and were saved by the use of cannabis. Many VA doctors agree and would like the option. Veterans’ organizations stand universally in favor of legalized medical cannabis; so too should our nation’s leaders.

Economics: Since Colorado legalized adult use cannabis in 2014, the state generated over $6 billion in sales and $1 billion in tax revenue. CA generated $300 million in taxes in its first year of imperfect legislation and will amount to well over $3 billion once legal rollout is fully up and running. In fiscal year 2017-2018, Colorado Department of Revenue says it collected $250,968,890 in marijuana tax revenue. The constitution requires the first $40 million in excise tax money go to school construction. Anything over that from the excise tax goes toward public-school funds.

Overall, 47 percent of marijuana tax money went to schools for fiscal year 2017-2018, 41 percent went to other state services, and the remaining 12 percent went to the general fund. Denver alone collected $48 million in tax revenue on cannabis. In Denver, all marijuana tax money goes to the general fund. The city also needs to dedicate portions of that tax revenue to education, enforcement, and regulation. During the last five years, nearly $13 million of the revenue went toward youth prevention efforts. For 2018, the city also carved out money from marijuana revenue for certain projects, including $5 million for deferred capital maintenance, $4 million to fix aging parks and recreation centers and an estimated $8 million per year to help double Denver’s Affordable Housing Fund.

The states cannot afford not to go after this revenue source, not to mention the countless entrepreneurs rushing into the space to create value for their investors and stakeholders. It’s an economic windfall for the states that have moved forward and will be for the country at large if done right.

Social Justice Reform: Congress agreed, and the President signed some justice reform passed into law in 2018. Cannabis reform may further correct a legal system that disproportionately affected certain communities. 

Banking: The Federal Prohibition juxtaposed with state permission has created an untenable system whereby legitimate businesses are unable to access the federal banking system. This creates an unsafe environment with massive amounts of cash being handled. While some local state options exist, the Treasury department has publicly come out in favor of a solution for banking and legal taxation.

Elections And Public Opinion: Gallup has tracked the topic of cannabis legalization for years. 2018 marked the first time the majority of Americans in every segment favored some form of legalization. This applied to baby-boomers and millennials, to Democrats and Republicans. Almost every single presidential hopeful who has declared has come out publicly in favor of repealing the national cannabis ban in the form of the STATES Act, while some have gone much further with full legalization. This includes Amy Klobuchar, Bernie Sanders, Elizabeth Warren, Cory Booker, Julián Castro, Kamala Harris, Kirsten Gillibrand, Tulsi Gabbard and Pete Buttigieg. President Trump has publicly stated his support for the states to decide.

When functioning properly, politicians serve their constituents. To get reelected, these politicians need to find a set of issues that gives them sufficient votes to win. There are no issues today that unite the country quite like cannabis reform.

The toothpaste is out of the tube, and you can’t put it back in. Legal cannabis is coming to the United States, sooner rather than later. Get ready.

J Smoke Wallin is CEO of Vertical Wellness, the leading hemp-based CBD company, and President of multi-state cannabis operator Vertical Companies.

Vertical Wellness is Established

Catching up here, after the farm bill passed legalizing hemp Federally in the US, Vertical Companies created Vertical Wellness and named me as CEO. Effective April 1, Vertical Wellness will be spun off to the shareholders and be a completely stand alone company. We expect to attract institutional capital to this entity and pave the way for a public offering. Below are some of the media coverage of our move.

New Cannabis Ventures-Jan 24, 2019Exclusive Interview with Vertical’s Wellness CEO Smoke Wallin. Vertical is all about brands in both the cannabis and hemp spaces, and, right now, the …

Here is the recorded interview below:

And more at the NYSE on Cheddar: Cannabis is ‘Greatest Growth Opportunity in Our Lifetime,’ Vertical Wellness CEO Says

Smoke Wallin at the NYSE on Cheddar

Smoke’s First Fire: Welcome to California

Well, it’s been an eventful 72 hours and the #WoolseyFire is still burning.  First, I want to acknowledge we are extremely fortunate.  My family has suffered no injuries or property damage to date.  Our experience with the fires has been more of an adventure, while I have seen friends, associates and strangers suffer greatly.  We’ve had a ton of people checking in on us so I thought I’d give a quick recap of my first California fire experience since moving to Los Angeles from Indianapolis earlier this year.  For the record, we have tornados and really crazy thunderstorms in Indy, but nothing like this fire.

It’s 7:48pm PT, I’m sitting here at home in Westlake Village under mandatory evacuation and prepared to leave again at a moments notice.  We are monitoring the Ventura County Fire alerts & radio chatter, Twitter has been our best source of information, albeit requiring tremendous filtering of nonsense posts. The TV news has been recycling video for days in creative yet misleading ways, making it hard to tell new events from prior ones.  We are surrounded by fire zones.

#WoolseyFire – from Simi Valley to Malibu . Blue Dot is our house in Westlake Village

#WoolseyFire – Blue Dot is our house in Westlake Village. Red lines are mandatory evacuation areas. Purple is fire areas.

Another map showing the fire zones and Westlake Village

 

 

 

 

 

 

 

 

 

 

 

 

The losses to the Southern California community are staggering, yet amazingly thus far mostly relegated to property and hardship. For the scale of this disaster, the limited loss of life has been a blessing and a testament to the Fire and Safety professionals getting ahead of it.
That said, this does not diminish the emotional hardship I’m seeing everywhere for personal losses.

 

We began this journey Thursday when upon returning from meetings in downtown L.A., we encountered highway closures just beyond our exit and the resulting logjam of everyone trying to get off at our exit, Westlake Boulevard.  Joining friends at Tuscany Restaurant, we enjoyed discussion with fellow patrons, but it increasingly turned to what people were hearing re the fires to the East of us. We offered our home to colleagues who were being evacuated.   I discussed exits plans that evening with Anitra and we agreed to leave if mandated. After a couple of hours of sleep, I awoke with a start at 2:30am and decided to turn on the news. By 3am, mandatory evacuation orders were issued for our Westlake Village. Go Time!

Even though I’m one who plans for emergency situations, knowing a fire may be imminent created a little bit of a scramble out the door.  As you should expect from an Eagle Scout, my go bag is always ready, with ample supplies of first aid, water treatment, weapons for self defense and other survival gear. I always think about how to survive for a week or more without civilization (hotels, stores, water, power) if on the road and for a month if bunkered in at home. [NOTE: If you do not have such a plan I suggest you consider it. It does not take long without power, food or water for the situation to cause people (especially crowds) to behave badly.]

On the other items front, we didn’t do quite as well.  E.g.,we later discovered that I had 9 pairs of underwear and one shirt (the one I was wearing), while Anitra had 14 shirts and one pair of pants (the ones she was wearing).  LOL Funny moment.

At 3:30am on Friday morning, we evacuated.  At that time there were fires to the East, North and West. I expected the 101 to be jammed up and fires were threatening to jump it by then.  Thus, I chose to head out via Westlake Blvd over the curving roads to Malibu and then down to Santa Monica. I figured this would be the least traveled most accessible escape route.

4am evacuating… no not happy

The 101 was closed in both directions from Westlake Village at the time of our evacuation

Over the hill in Malibu and headed to Santa Monica

 

 

 

 

 

 

 

 

 

 

 

It turned out to be true and we made it to the Santa Monica JW Marriott by 4:45am.  The hotel was sold out that night but I was fortunate to book a room for Friday night and after huddling around the fire pit for a few hours, we were checked in by 10am Friday morning.

Luckily, we left Malibu on the same route ahead of this now famous scene:

Photo of masses of people evacuating Malibu later on Friday after we had made the trek. Photo credit unknown.

 

Evacuee at the JW Marriott – yes lucky and blessed. In the words of one of my favorites, Tom Petty “You don’t have to live like a refugee”

This became our home for the next 36 hours.  It was eerily perfect, sunny, warm and no sign of the massive disruption happening nearby other than our fellow fire refugees we met.

On Saturday, the winds shifted and Santa Monica became smoky and unpleasant.  Anitra’s history of asthma was on our mind as we exited and headed toward Sherman Oaks where friends offered their home.  On that front, we had nearly a dozen offers of places to stay with our wonderful community of friends and family. It was amazing and heartfelt from many friends giving us another reason to give thanks.  As we came over the hill towards the Valley, it became clear that the air was anything but clear. The shifting winds had brought heavy smoke.  At this point, we had heard from several friends who had remained in Thousand Oaks & Westlake Village who told us the area was clear, even though the evacuation order was (and is) still in effect.  We decided to go home to at least grab other supplies (clothing) and at best stay put (we did).

 

 

 

My friend and colleague who stayed behind in Westlake Village sent me these shots of the fires burning in our neighborhood on Friday:

 

Today we rode bikes to survey some of the damage and view the situation live.

 

Smoke reporting from Westlake Village during the #WoolseyFire from J. Smoke Wallin on Vimeo.

I learned from my neighbor, a veteran of the 101st Airborne (thanked him) who has lived here since 1985, that where we are in Westlake Village is uniquely sheltered and the fires historically have gone around us. The winds also made the air here much clearer than I expected.  We had a blue sky sunny CA day today.

We remain vigilant and ready to leave at a moment’s notice.  I have great respect for the heroes of this tragedy. The fire and rescue and police have done a remarkable job of fighting an unstoppable force of nature.  I grabbed this shot from a twitter post (source unknown) of some of these guys taking a rest after 48 hours of constant fire fighting.  Amazing dedication and perseverance.  We plan to find ways to support them in significant ways going forward.

From KTLA – photo of firefighters sleeping in place after 48 hours of nonstop firefighting. Heroes, every one of them.

I will update this with the next chapter when it unfolds, but wanted to share in the moment while its fresh.  Thanks for sharing with me, your stories, as well.  As Anitra would say, we are blessed and lucky.

CNBC’s Fast Money with Smoke Wallin re Branding Cannabis, Wine & Spirits and Market Observations

Thanks to CNBC and the Fast Money crew for a fun interview on the state of the cannabis industry.

Cannabis industry exploding with growth here, says top pot exec

The cannabis business is growing like a weed, even as pot stocks see wild swings. With Smoke Wallin, Vertical Companies, CNBC’s Scott Wapner and the Fast Money traders, Pete Najarian, Tim Seymour, Karen Finerman and Guy Adami…

Smoke Wallin on CNBC’s Fast Money

A few shots from the day at CNBC:
 

 

 

 

COURTNEY DORNE AND J SMOKE WALLIN JOIN VERTICAL COMPANIES EXECUTIVE LEADERSHIP TEAM

VERTICAL EXPANDS EXECUTIVE TEAM; CEMENTS LEADERSHIP IN LEGAL CANNABIS INDUSTRY

Courtney Dorne, J. Smoke Wallin bring significant executive experience in Food and Alcohol Beverages to one of country’s leading medical cannabis companies

Los Angeles, CA (January 25, 2018) – Vertical, one of the country’s leading vertically integrated medical cannabis companies, announced today the addition of Courtney Dorne and J. Smoke Wallin to their leadership team.  Dorne is an entrepreneur and food industry leader who joins Vertical as a partner and President of Vertical Brands Co.  Wallin is a serial entrepreneur and thought leader in the beverage alcohol industry and has joined as a partner, Chief Marketing Officer and President of Vertical Distribution Co.

Vertical was founded in 2014 by entrepreneurs who saw the potential created by the transition of cannabis to a legitimate and legal business. Drawing from results-driven expertise in a variety of industries, the Vertical team has a synergistic energy that offers proven experience from seed to sale.

“I’m thrilled to welcome Courtney and Smoke to our executive team,” said Todd Kaplan, Founder & CEO of Vertical.  “Smoke’s deep knowledge of alcohol distribution and scaling new businesses in highly regulated industries, combined with Courtney’s perishable food distribution and extensive network strengthen our competitive advantage in the rapidly evolving legal medical cannabis industry.”

According to The Arcview Group, the U.S. legal cannabis industry represented over $6.7 billion 2016 and is expected to grow to between $22 and $50 billion over the next 10 years. Legalization of the medical cannabis industry began in 1996 with California’s passage of the Compassionate Use Act.  Since then it has operated in a quasi-legal environment with conflicting laws throughout the land, while growing exponentially.  2014 marked the beginning of adult recreational cannabis legalization with Colorado and Washington leading the way.  Today there are 29 states that have legalized either medical only or medical and adult recreational cannabis production, distribution, retail and consumption.  Gallop recently reported 64 percent of Americans support cannabis legalization nationally. In this vibrant space, Vertical is a pioneer and is the first to offer fully integrated services from legal compliance and operation of cultivation to extraction, product development and marketing.

Dorne brings literally a lifetime of experience in food services and the restaurant industry to Vertical. From her family’s restaurant to founding the giant Fresh and Ready Foods, Dorne has a proven track record in food manufacturing and perishable packaged food distribution and has built an extensive network of customers ranging from airlines and hospitals to convention centers, the military and convenience stores, all the while working under the rigorous scrutiny of FDA and USDA regulations.  She is a member of the YPO Global One chapter and is the current Chair of the Women’s Network (WYN).

“After years of suffering from debilitating pain and crippling migraines as a result of extensive surgical procedures, I learned first hand about the efficacy of cannabis on pain management,” said Dorne. “All too often our culture is quick to treat pain with a pill and we’ve all seen what that has gotten us. I believe that legal cannabis can be a part of a legal, safer and healthier alternative and I’m thrilled to join the team that can help make this happen.”

Wallin comes to Vertical by way of Taliera, a company he founded in 2005 to create, acquire, manage and advise brands in the beverage space. His career in beverage alcohol has included serving as Chairman & President of the Wine & Spirits Wholesalers of America (WSWA) and EVP and CFO for National Wine & Spirits (now part of RNDC/Breakthru). He is also active in YPO as Chair of the Beer, Wine and Spirits Network and has been active in legislative and regulatory affairs.

“I have always loved innovating, doing deals and building enterprises to scale, particularly in the beverage alcohol space,” Wallin said.  “I’ve been studying high potential growth brands and companies, and Vertical and is at the forefront of the rapidly growing legal medical cannabis industry. Both industries are highly regulated and for some time I have been expecting them to converge. The recent investment by Constellation Brands[STZ] in Canada’s Canopy Growth [WEED] validated my premise, and I couldn’t be more excited to be part of the team building brands and distribution in a market worth $100s of billions globally.”

Wallin continued, “I can’t help but think of Sam Bronfman in 1933 at the Repeal of Prohibition who went on to build Seagram into the alcohol industry leader it became before selling to Diageo and Pernod Ricard. Vertical is positioned to achieve that level of success.”

About Vertical™

Vertical is one of the first and largest vertically integrated companies in the legal medical cannabis industry. It’s operations in CA, AZ and OR combined with strategic partnerships in CO, MI, and NV position it well to take advantage of the rapid legalization and normalization of cannabis globally. Vertical is led by an executive team of entrepreneurs and business leaders from the alcohol beverage, agriculture, CPG, distribution, entertainment, food and medical industries. Vertical’s operations include planning, permitting, development and operation of cultivation, extraction, manufacturing, distribution and retail facilities.  It has world class capabilities in product development, co-packing, branding, marketing, education, and legal compliance, Vertical does Everything Pertaining to Green. For more information visit www.vertcos.com.

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