Issue 58: Bye Bye, Buddie
Eight years after ResponsibleOhio's farce, a new campaign to legalize in OH takes the more traditional route. Still, some people are set up to be bigger winners than others.
This week, news of another state-level legalization ballot initiative inspired me to jump in the cannabis time machine to take a look back at a legalization campaign in 2015 that was unlike anything we had ever seen before…or since.
Bye Bye Buddie
A Look Back At ResponsibleOhio and How A Marijuana Mascot Altered The Cannabis Reform Timeline
This week, it was announced that an initiative to legalize marijuana in Ohio would appear on the state’s ballot this November.
Folks who have been in the movement for a while will remember that this isn’t the first attempt to legalize marijuana for recreational use in Ohio. Eight years ago, a renegade group of investors, consultants, and political operatives tried to use a marijuana mascot to inspire voters to legalize cannabis as part of a ballot campaign unlike any other in history.
ResponsibleOhio was a proposed constitutional amendment initiative that was the brainchild of Ian James, a political strategist with experience running casino gambling ballot campaigns.
It was 2015, so trying to pass cannabis legalization in a purple state like Ohio was an ambitious project, particularly when you consider the state hadn’t yet legalized medical marijuana.
Legalization campaigns at this point in time were hardly a guaranteed success. While Colorado and Washington had already legalized at that point, efforts to pass Prop 19 in California had failed in 2010.
It probably would have been wise to copy the playbooks that had worked in Colorado and Washington, but James decided to go a completely different direction, making a number of controversial campaign decisions that would ultimately kill any chance the constitutional amendment had of passing.
The most famous and controversial provision of the proposed amendment would have limited all of the state’s cannabis cultivation operations to a mere ten properties, all of which were owned by individuals who have financially contributed to ResponsibleOhio’s creation. This motley crew of characters included Nick Lachey, (former member of 98 Degrees); Woody and Dudley Taft, descendants of our 27th President, William H. Taft; and Oscar Robertson, NBA hall of famer, among others. The group claimed to have over dozens of investors who had involvement in the ten pre-selected properties.
To put things mildly, ResponsibleOhio wasn’t just a constitutional amendment. It was also a get rich quick scheme. By limiting the cultivation licenses to ten and restricting them to particular addresses that were already owned by investors, this amendment would have made their weed oligopoly an official part of the state’s Constitution.
At the time, James, who ended up making millions by running the campaign, insisted that voters had no concerns over who was going to benefit from the constitutional amendment.
“Voters don’t care about that,” James told WCPO 9. “What they care about is (whether this is) being done the right way. Is this the proper way to legalize marijuana? Is the state of Ohio going to be better off legalizing it or is it not?”
He went on to say that he was” 95 percent confident” that Issue 3 would pass.
Buddie: The Marijuana Monopoly Mascot Man
While the policy nerds were focused on the problematic nature of the proposal, the general public became fascinated with the campaign’s mascot: Buddie, an anthropomorphic marijuana man that organizers used to drum up support for the campaign on college campuses and at public events.
In a time where drug policy reform efforts still struggled to get mainstream press, Buddie’s appearance captured the eyes of the nation… but not exactly in a positive way. Late night talk shows and comedians lampooned the idea of a marijuana mascot being the main public face of a campaign to amend Ohio’s constitution, as many longtime cannabis advocates shook their head at this amateur attempt to raise publicity for what should have been treated as a serious issue.
Longtime drug policy activists know that infighting has always existed in the movement (as it probably has in every political or social movement in history), but this was the first time that the movement was forced to ask itself a difficult question: Is a bad legalization bill always better than prohibition?
Rolling Stone described the debate over ResponsibleOhio as “a battle for the soul of the marijuana movement.” Leading marijuana policy organizations at the time like Marijuana Policy Project and the Drug Policy Alliance attempted to take neutral stances on the campaign, while NORML and Keith Stroup gave it a tepid endorsement. Attempts by organizers to soften the blowback by adding a provision that would allow for home cultivation did little to appease existing drug policy activists who were skeptical.
On the ground in Ohio, things were looking even worse for the campaign, as pretty much every group imaginable came out against it. Political leaders in the state across the aisle were united in opposition; even the Green Party and Libertarian parties came out against the amendment. Virtually everyone pointed to the cannabis “cartel” that the proposal would create as the main reason for their opposition.
In the end, ResponsibleOhio got absolutely crushed on election night, dropping every single county in the state on the way to a 63.65% - 36.35% loss.
The proposal was so controversial that the Ohio legislature worked double time to ensure nothing like it would ever be proposed again, adding another question to the ballot that sought to ban commercial monopolies from being written into the Constitution. During the same election where ResponsibleOhio failed by almost a 2-1 margin, this anti-monopoly question passed easily.
A month after the vote, James admitted in an opinion piece that the campaign made the obvious mistakes that everyone was already pointing to: the reliance on an oligopoly and the inclusion of Buddie. He also promised to come back in 2016 with a cannabis ballot initiative that would deliver a “strong, free market plan.”
No marijuana-related initiatives ended up making the ballot in Ohio in 2016, but the state did end up legalizing medical marijuana via the legislature that year. Today, there’s been 92 dispensary licenses issued, with 41 of them being currently operational.
Where Are They Now?
While many people involved in this scheme did not end up being major players in the cannabis space, there are some notable exceptions. Two of them are Ben Kovler and Peter Kadens, co-founders of Green Thumb Industries, a company that has since grown to one of the largest in the cannabis industry. Perhaps they knew enough about the still nascent marijuana space to know that ResponsibleOhio was a sinking ship, as both Kovler and Kadens sold their shares in the endeavor a month before the amendment was voted on (Kadens left GTI in 2018; Kovler is currently the company’s CEO).
Apparently the group of investors wasn’t eccentric enough already, so of course the buyer of GTI’s shares was none other than Brian Kessler, an Ohio toy mogul whose father invented the Hula Hoop.
If you guessed that Ian James’ experience with running ResponsibleOhio would push him away from the cannabis space, you’d be wrong. He later worked with Jim Gould, a former business partner of Donald Trump, to start CannAscend, a company that obtained four medical marijuana licenses in Ohio. These licenses would later be acquired by Columbia Care in 2021 for a transaction price of $14.2 million.
Buddie’s Legacy
Buddie’s whereabouts are currently unknown (although it’s possible that he died on the way back to his home planet). In the eight years since the ballot campaign he represented failed, I’ve occasionally found myself wondering how much of that failure was due to his existence versus the oligopolistic nature of the campaign. Given the fact that the amendment was rejected by a wide margin, it’s probably safe to say that both Buddie and the actual text of the proposal contributed to its demise. Still, it’s hard to state how much negative press that anthropomorphic bud brought to the proceedings.
In the end, fears that ResponsibleOhio’s terrifying mascot would kill the momentum of marijuana legalization in other states was unfounded; five states (CA, MA, ME, and NE) would end up legalizing in 2016, with even more states joining them in the years since.
While we haven’t seen such a brazen attempt to turn a state cannabis market into an oligopoly via a ballot campaign since ResponsibleOhio, this campaign hardly marked the end of people attempting to corner cannabis markets via legislation.
In fact, one of the big takeaways for companies may have been that they should work with state legislatures rather than against them. New York’s medical marijuana program only allowed for the participation of a handful of companies, and — as mentioned in this space before — thanks to a bunch of lobbying and some major lack of transparency, Georgia’s medical marijuana program currently only has two companies who are authorized to grow and sell cannabis.
Now THAT’s an oligopoly.
Instead of trying to gain control of the market via a brazen boyband-backed ballot initiative, corporate forces seeking to control the cannabis space have adopted a much more subtle strategy as of late: first, allow a state to pass a medical marijuana law, obtain licenses in said state, and THEN attempt to create some rules and regulations that allow you to obtain as much control of the market as is politically possible if/when full legalization happens.
The most obvious example of this phenomena is Trulieve’s well-documented Florida ballot campaign, but it should also be noted that the language of the proposed ballot initiative in Ohio also provides a pretty big advantage to existing medical marijuana companies in the state, many of whom are large MSOs.
The New Strategy: More Subtle Market Capture
It’s clear that the latest campaign to legalize in the Buckeye State isn’t ResponsibleOhio version 2.0, but that doesn’t mean it’s exactly a free market free-for-all either. The text of initiative prohibits regulators from issuing any new cultivation licenses for two years to companies that aren’t existing medical marijuana growers.
[EDIT: I mistakingly claimed that Ohio’s initiative prohibits regulators from issuing to licenses to anyone who isn’t an existing medical operator. While Ohio’s initiative does benefit existing cannabis companies, it’s a bit more nuanced than I initially claimed. More in next week’s issue.]
The reason for these benefits for existing medical companies is fairly obvious: They’re playing a major role in bankrolling the campaign. Multiple existing Ohio medical cannabis companies have made donations worth hundreds of thousands of dollars to support the initiative, according to state records.
This also comes as existing operators are pushing back against a bill that would expand the medical program, both by allowing doctors to recommend cannabis for more conditions and by allowing more dispensaries to be licensed. They argue the market is already oversupplied.
It’s hard to believe that the initiative’s social equity language will be successful if new businesses are only given the scraps of the market that are left over after large companies have two years to solidify their control. Considering they already have existing infrastructure and brand recognition, existing medical cannabis companies have a leg up in states that legalize for recreational use. Giving them further advantages only makes it easier for a handful of existing companies to dominate the market.
It’s not quite as dystopian of a situation as Ohioans being forced to buy weed from Jessica Simpson’s ex-husband, but it’s also unlikely to result in any sense of equity in the state’s cannabis economy.
How Much of A Head Start?
It’s important to note that while ResponsibleOhio was a constitutional amendment, The Coalition to Regulate Marijuana Like Alcohol’s effort is an indirect initiated statute, meaning the legislature will be free to amend the proposal after it passes.
Massachusetts’ 2016 ballot initiative originally had a exclusivity period of a year for existing medical marijuana operators, but the legislature later whittled this down to just a few months during an expansive rewrite of the legalization law. Despite this relatively small head start with the application process, pre-existing medical dispensaries continue to dominate the state’s industry, as equity applicants continue to struggle to gain a foothold.
It’s fair to say that the main lesson from ResponsibleOhio for some forces in the cannabis space was NOT to stop trying to use legislation to their advantage to help corner the cannabis market. Instead, they decided to be just a lot less brazen and greedy with their attempts.
But now that cannabis reform has gained large spread support amongst voters, some campaigns are once again betting that voters won’t care about the specifics of the language, or who exactly is financially benefiting from it.
It’s become clear that if you’re going to create protectionist carve-outs for your cannabis company as part of a legalization ballot initiative, you have to be a lot more subtle than…
…well, you get the idea.
ICYMI
I recently sat down with some of the folks behind the North East Regional Cannabis Symposium.
If you’re a looking to grab an individual ticket, use the code BAR150 for $50 off.
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New England
MCKEE, GENERAL ASSEMBLY LEADERSHIP NAME CANNABIS ADVISORY BOARD PICKS (Christopher Shea | Rhode Island Current)
Gov. Dan McKee, along with House Speaker K. Joseph Shekarchi and Senate President Dominick Ruggerio on Thursday announced their long-awaited picks for the Cannabis Advisory Board.
The 19-member board, which will consist of 11 voting and eight non-voting members, is tasked with working with the Cannabis Control Commission to advise and issue recommendations on the use, commerce, regulation and effects of adult-use and medical cannabis within the state.
ANALYSIS: While the Advisory board doesn’t have the ability to pass regulations themselves, we may see Rhode Island’s relatively small commission (three commissioners, with only the chair being a full time employee) lean on them for suggestions more than we see here in Mass.
CONNECTICUT LAWSUIT SEEKS REPEAL OF STAMFORD, STATE MARIJUANA LEGALIZATION (MJBizDaily)
A group of suburban Stamford, Connecticut, homeowners who are upset about marijuana legalization is suing to shut down local cannabis sales.
But the Stamford Neighborhoods Coalition’s lawsuit, filed Aug. 9, asks a judge to go bigger and block the cannabis industry throughout the entire state, the CTNewsJunkie reported.
Connecticut legalized a medical marijuana program in 2012.
ANALYSIS: Unless this group of homeowners from stamford have magically found one neat trick to defeat cannabis legalization, I think this lawsuit is probably going nowhere.
WORKERS AT CT'S LARGEST CANNABIS FARM VOTE TO UNIONIZE (Jordan Nathaniel Fenster | CT Newstimes)
The union includes workers in all areas of the facility, Sabo said, from cultivation “all the way up through processing manufacturing the gummies, the kitchen.”
This is the second such cannabis union to form in Connecticut. Forty eight workers at Advanced Grow Labs in West Haven joined the UFCW in March.
ANALYSIS: These workers will join Verano employees in New Jersey and Illinois who have already unionized.
Rest of U.S / National
The Founders of La Mota Face New Tax Liens Totaling More Than $4 Million as They Expand Into New Mexico (Sophia Peel | Willamette)
And as things have slowly fallen apart for the two, they’ve done two things that seem at odds.
First, they continue to accumulate tax liens. Three new liens filed in the past month and a half by the Internal Revenue Service and the Oregon Department of Revenue total more than $4.2 million.
Second, they continue to expand into New Mexico. The two now hold seven cannabis licenses in that state—including for a giant warehouse that used to contain a furniture outlet store.
ANALYSIS: New Mexico has been cracking down pretty hard on bad operators, so it doesn’t seem like La Mota is going to find safe harbor from scrutiny there.
MARIJUANA MSOS EXPAND FLORIDA RETAIL, BETTING ON ADULT-USE LEGALIZATION (Kate Robertson | MJBizDaily)
Adult-use legalization is hardly guaranteed, what with the Florida attorney general trying to block an effort by the state’s largest MMJ operator to put the issue as it’s currently worded before voters in November 2024.
But that’s hardly put a damper on MMJ companies deciding to open new retail outlets.
In July, Chicago-based Verano Holdings celebrated the opening of its 70th dispensary, placing the MSO in the No. 2 spot in store counts behind Florida-based Trulieve Cannabis and ahead of No. 3 Ayr Wellness and No. 4 Curaleaf Holdings.
ANALYSIS: While Trulieve is clearly betting big on legalization passing in 2024, Florida’s large medical cannabis market makes it an attractive place to own a license, even if adult use still ends up being years away.
International
🇩🇪 GERMAN CABINET OKS LANDMARK BILL OVER LEGAL CANNABIS USE (Sarah Marsh and Andreas Rinke | Reuters)
Scholz's government had already watered down original plans to allow the widespread sale of cannabis in licensed shops after consultations with Brussels.
Instead, it said would launch a pilot project for a small number of licensed shops in some regions to test the effects of a commercial supply chain of recreational cannabis over five years. For that, it will need to present separate legislation in a second phase.
Similar such projects already exist or are planned in the Netherlands and Switzerland.
ANALYSIS: Even though Germany’s current plans don’t leave much room for participation by MSOs, Curaleaf and other companies are still hopeful that the overall loosening of German attitudes towards cannabis will also lead to an uptick in medical cannabis prescriptions.
I have an embarrassing confession to make as a baseball fan: I’ve yet to complete an Immaculate Grid.
I have no problem naming relatively obscure baseball players from yesteryear off the top of my head (for example: Tomo Ohka), but apparently remembering what team they played for is an entirely different thing. I came narrowly close to finally having a perfect grid the other day, only to confuse Tom Seaver with Tom Glavine.
If you haven’t given the latest online puzzle game a try yet, you can do it here.
This week it’s Eve, who’s available for adoption via the Worcester Animal Rescue League.
Eve came in to WARL with her kittens. She was found hiding in somebody’s garage and they made great efforts to bring her and her babies to us. Eve was sent into foster care where we learned more about her personality. She is not a lap cat, but does enjoy to be around people.