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.

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:
 

 

 

 

Standing Up: A Personal Journey To The Legal Cannabis Industry

I never imagined I’d be writing about this topic. For 25 years, I’ve enjoyed an amazing journey as a serial entrepreneur building companies and brands, leading companies in the beer, wine and spirits, distribution, and technology industries. The alcohol industry has been good to me and to my family.

Other than a little exposure in college, I have not been around marijuana. A few years ago, I met a bunch of U.S. Marines. Travis McVey created Heroes Vodka and I helped him launch the brand. His friend Stephen told me a story that has stayed with me. Stephen Cochran served as part of the 2nd (LAR) Light Armored Reconnaissance Battalion, 1st Marine Expeditionary Force. He served in Iraq and Afghanistan and was severely injured on patrol. Stephen spent nearly a year in hospitals paralyzed, unable to a walk. After undergoing an experimental procedure at Vanderbilt, he was miraculously able to walk again. Stephen said,

“In recovery, I suffered from extreme pain and Doctors prescribed me every prescription medicine you could imagine. The pain meds nearly killed me. That is when I turned to cannabis. Today I’m raising my family, writing, and performing music. I give back to veterans wherever and whenever I can ( Semper Fi Fund). Medical cannabis is the reason I can do these things today. It saved my life and the lives of many of my fellow veterans.”

This conversation opened my eyes to the many benefits of cannabis. There are more than 50 medical conditions for which cannabis is legally recognized as some form of therapy or medicine including Alzheimer’s, anorexia, arthritis, cancer, chronic pain, epilepsy, and post-traumatic stress disorder. I’ve come across people suffering with chronic pain and others going through cancer treatment. Cannabis allows them to live their lives without the destructive side effects of opioid based pain medicines. The more I learned about the benefits of cannabis to people suffering, the more research I did to understand the industry. Based on this, I’ve come to believe that its place in society needs to change.

BEVERLY HILLS, CA – FEBRUARY 15: Al Harrington (L) and Viola Harrington arrive at exNBA Star Al Harrington Launches New CBD Business at Wolfgang’s Steakhouse on February 15, 2018 in Beverly Hills, California. (Photo by FilmMagic/FilmMagic)

Al Harrington is a 16-year NBA great and cannabis entrepreneur. I used to watch Al at Pacer’s games. Al found his way into medicinal cannabis and CBD to treat his pain from a botched knee surgery. He tells a funny story about recommending medical marijuana to his grandmother Viola. She suffered from multiple ailments, and after some initial resistance, she tried it and immediately felt better. His cannabis brand, Viola, was soon born. He also has his Harrington Wellness line of CBD. Al’s story is genuine. In an interview with Al, former NBA commissioner David Stern pronounced that the laws and rules need to change around cannabis (See Al Harrington and David Stern). Al, and my friend, musician, and NFL great Kyle Turley, have been outspoken advocates for awareness and change. It’s clear, cannabis prohibition and the aggressive pursuit of its enforcement have also particularly ravaged the African American community.

The opioid epidemic is destroying lives, families, and devastating whole communities. I personally have more than one friend who has lost a (grown) child recently, due to accidental overdose or tainted product. We must do something to stop this epidemic. Doctors overprescribing opioids is one of the primary causes. Many patients start out with legal prescriptions and become addicted. They then turn to the illegal market to meet their addiction needs. Cannabis can be used to help wean people off these destructive drugs. Ideally, it could be prescribed to avoid opioid abuse in the first place. It is a legitimate part of the solution. Given this, I decided to find out how I could make a difference.

I attended the MJ Business conference in Las Vegas and networked with Young Presidents Organization (YPO) and other friends. I wanted to figure out how I could play a positive role in this emerging industry. I did some research to understand what led to the abrupt prohibition of cannabis in the US in 1937. I learned that Indianapolis pharmaceutical powerhouse, Eli Lilly was in the cannabis business until the prohibition. Cannabis prohibition seems to have been motivated by a combination of racism and the business interests of a few that had political influence (Why Is Marijuana Illegal). I learned that many feel the ratcheting up of cannabis to a Schedule I drug (the same as Heroin) in 1970 also had racist motivations. It was certainly not based on science.

The American public now overwhelmingly supports cannabis legalization, with over 64% in favor according to Gallop. It is more popular than any current politician. State by state, citizens have made local option the law of the land. There are now 30 states plus Washington DC where medical cannabis use is legal. There are 9 states where adult recreational use is now legal. This is a prime example of the importance of state’s rights leading the way.

As the industry has come out of the shadows of illegal activity and into the light of permitted activities in many states, incredible entrepreneurial spirits have been unleashed. I feel the excitement of being at the forefront of another Repeal of Prohibition. This time though, we have the added dimension of extraordinary medical benefits. Drawing from my 25+ years in the beverage alcohol business, I see many parallels to the industry I know well. The legal framework around local option, licensing and taxes are similar to alcohol beverage laws in many respects. Constellation Brands [STZ] recent $191 million investment into Canopy Growth [WEED] further convinced me that this developing industry is going mainstream.

Legal cannabis is likely to rival the Beer, Wine and Spirits categories and exceed $50 billion annually in the coming years. Some analysts predict the US industry over $100 billion. Regardless of the number, it is and will be massive.

I met my partners Todd Kaplan and Courtney Dorne through YPO last year. I joined the team at Vertical Companies as a partner, President of Distribution and Chief Marketing Officer in January 2018. I could not be more excited in this venture, building a large scale new enterprise in the emerging cannabis space. One of my objectives will be to play my part in bringing the right coalitions together to address and correct the State vs Federal conflict that exists today.

Giving Thanks To Mentors: My Gratitude To Andy Paine, Jr.

As we live our lives, we all lose family, friends, colleagues and acquaintances. Sometimes, we lose someone who meant something very special at some point along our life’s journey. For me, that someone was Andrew J Paine, Jr., “Andy” who passed away this week after a battle with cancer. Andy lived a full life, raised a great family and has many great accomplishments as one of The Business Leaders of the Indianapolis community for decades. The Indianapolis Business Journal did a nice job in their tribute here Banking titan Andy Paine dies at age 80

Andy was one of the first people I met when I moved to Indianapolis after Cornell University. He was warm and inviting and we immediately connected on some of his work in the community. He was leading an effort with the Japan America Business Council which led us to long discussions on international business and relations. At that first meeting at my father-in-law, Jim Lacrosse’s house, Andy invited me to join him for lunch at his office. Little did I know that lunch would transform my life.

Andy and Jim were close friends. Indiana National Bank was one of two leading Indiana banks and Andy was, by then, the President (INB is now JP Morgan Chase). But when they met, Andy was the loan officer who ended up pushing through the loan that allowed Jim to buy the $11 million National Liquor Company (Later $1 billion National Wine & Spirits and now part of $8 billion RNDC). Needless to say, they were close, but Andy and I hit it off independently.

When I arrived at the Indiana National Bank tower, I was unaware that we’d be dining in the CEO’s private dining room. At 22, I was wet behind the ears in business, but possessed high ambition and the willingness to do whatever it took to make my mark. I think Andy sensed that and somehow felt a connection and the desire to help channel my raw energy. That’s what mentors do.

At that lunch, Andy said to me,

“Smoke, you need to get involved in the community early on.  Don’t wait until later, do it now. I want you to meet David Hicks (then president of JA of Central Indiana). JA is something you can help with now. I also want you to go through the Stanley K Lacy Leadership Series, but you will have to wait until you are at least 27.”

He talked about the importance of giving back in the community and getting involved early. That it’s an obligation for each of us who do well and thrive in our communities to give back to those communities and to people who need a leg up. Andy appealed to the best in each of us and translated that into action for me.

When I applied to business schools, Andy wrote me recommendations. When I led the Distinguished Lecture Series at Vanderbilt Business, Andy helped me recruit speakers (Hank Schacht CEO of Cummins Engine and later Lucent Technologies and James Baker, CEO of Arvin Industries). When I applied to the SKL Leadership series, Andy was my sponsor. When I later became Chairman of JA of Central Indiana and won a national bronze leadership award, Andy was there encouraging and supporting me at each step along the way. Andy supported my selection as “Forty Under 40” by the IBJ. As we grew our business and NWS, I became CFO to restructure our financing amid a torrid pace of acquisitions and growth. Andy was always around.

I reflect back now on the impact he had on my career and life. The advice he gave me at the first lunch and the later encouragement and support, although infrequent, came at critical moments in time that helped me make better decisions and ultimately become the person I am today.   For all of you who take the time out of your busy schedules to counsel an up and comer from your business or community, I say thank you. Know that a lunch with a bit of coaching and encouragement can make all the difference in someone’s life. Don’t ever think of it as a waste of time or unnecessary. Indeed, it may well be one of the greatest responsibilities we all have as leaders in our respective worlds.

Thank you, Andy. I will never forget you and your legacy continues.

Finish What You Started

It was the Summer before my senior year in High School when I ran into my Scout Master. He was also our neighbor in the small fishing village of Longboat Key, FL, where I grew up. “Smoke, good to see you. You going to finish what you started?” he asked. Of course, I knew exactly what he was referring to. You see, a few short years before, I was one of the founding scouts of Troop 44 on Longboat Key. As a new troop, I had the opportunity to immediately become a leader. It didn’t take long for a rapid ascent through the ranks; from Scout, to Tenderfoot, to 2nd Class, to 1st Class, to Star, and on to Life Scout by age 16. I only had a few more requirements to achieve my goal of becoming an Eagle Scout, the Boy Scouts highest rank. While Scouting and camping remained something I cared about, sports, school and social activities had begun to take most of my time.

On that hot Summer day while on my way to catch some Mullet with my cast net, Mr. Carmen reminded me, “Smoke, you know that only 4% of boys who start scouting ever achieve the rank of Eagle?”. This had been grilled into us from the first days of scouting. He was reminding me, that in less than a year I would turn 18 and no longer be eligible for advancement. He also knew there was a very good chance I would not finish as he’d seen this happen to many scouts over the years. Wrestling was my priority and I was about to head to Dan Gable’s 28 Day Intensive Training Camp in Iowa. Once the season started, this meant 3 hour practices, 5 days a week and meets and matches on many weekends. Juggling this with school work and applying to colleges would be a challenge as it was, add on all the social distractions that come with senior year in high school and it would be a real challenge to put the necessary time into Scouts. It was a moment of truth. Do I make the commitment to finish what I set out to do or do I take the much easier path and let other things take priority? I remember looking myself in the mirror and asking, “What matters to me?” I decided then and there that I would not let anything get in the way of my goal of Eagle. Looking back, I had no idea of the impact the answer to that question would have on my life.

Eleven months later, I completed my Eagle project. We cleaned up part of the beaches on Longboat Key and built a small foot bridge at the LBK Youth Center. I finished right before my 18th birthday. My brother Clay followed suit, earning his Eagle rank a short time later (but also right under the wire). In the end, it was up to me to do the hard work and complete the requirements. I never would have made it without the support and encouragement of my family and the adult leaders in the Troop, when I needed it most.

Today, I reflect on this story to share one of the many lessons I have learned: finish what you start.

Building the internal fortitude to bear down is hard when there are many other distractions. This is something you cannot teach, but rather one must learn from experience. Looking back on my years since, finishing my Eagle changed my whole life.

The willingness to step up and complete what one begins is an essential element for success in business, industry and community activities. I moved to Indianapolis upon graduating from Cornell University and read about an Eagle Scout leadership dinner in town. This is where I met some of the community’s biggest business and community leaders at the time, including then Senator Richard Lugar. At 22 years old, I was networking with a Senator and CEOs of some of the biggest businesses in a town. Prior to this, I only knew a handful of people in Indianapolis. Being an Eagle Scout has opened many doors for me along my personal journey. A few years later, when I was in position to hire talent for my businesses, a candidate with Eagle Scout on their resume would always make my interview list regardless of other experience. It’s the one thing from childhood that has come up time and again throughout my adult life. This would not have happened had I not finished. No one recognizes a Life Scout.

When my two sons Skye and Cameron joined Scouting, I told them this story. We had many adventures in Scouting together including hiking on the Appalachian Trail, Rocky Mountain National Park, Philmont Scout Ranch and the Wrangell-St. Elias National Park in Alaska. As they got older, when time was running out for their Eagle, I had to remind them of it. There was a good chance they would not finish, but fortunately there were many adults and fellow scouts who helped push them when they needed it most. (Scoutmaster Clifton, Mr. B, the Johnsons, the Stewarts, and other parents, in particular Diana Church). When one starts anything new, it is easy to say, “I’ll finish and reach my goal.” It is a lot harder to actually do it. I’m proud that both sons also went on to earn their Eagle rank.

Throughout my career in business as a serial entrepreneur, I’ve encountered many setbacks and roadblocks to achieving my goals. It is how one responds to adversity that determines success. There is a confidence one develops knowing whatever it takes and no matter how difficult the situation one can persevere.

When you have the opportunity to give an extra push or words of encouragement to someone you know who is struggling or has lost sight of their goal, do it, even if it is not what they want to hear. Your encouragement could be the thing that gets them over the top to rededicate themselves to achieve their potential. It takes caring people to bring out the best in each of us. Sometimes, one person asking, “are you going to finish what you started?” is the final catalyst needed for action.

At the end of the day it is up to the individual to do what it takes. When the going gets tough, the tough get going. When you feel most like giving up, that is the time to bear down and do what it takes to finish what you started.

If you enjoyed this read, please follow me on twitter @smokewallin or on https://www.linkedin.com/in/smokewallin and you can read more on my personal website drinktechnology.com. If you know someone how needs to hear this message, please share.

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