Inside the Surprisingly Sober World of the Pot Lobby

It's not, in fact, going up in smoke

by Timothy J. Burger | March 18, 2016 11:50 am

Heather Podesta boasts a slate of blue-chip clients to whom anyone would be happy to bill a steak-house lunch. The fortysomething lobbyist works with the National Association of Real Estate Investment Trusts, Prudential Financial, Marriott International and the MacAndrews & Forbes Group—members of industries that since time immemorial have sought to exert influence on Washington, D.C.[1]’s lawmakers. But there’s another side to the Berkeley and University of Virginia–educated lawyer’s business, one that thanks to brands like Red Bull, Snapchat, Fitbit and Peet’s Coffee & Tea skews more Animal House than House of Cards[2]. And the party is only getting wilder. 

Last summer, Podesta registered to lobby for the legal-marijuana industry, signing the National Cannabis Industry Association as a client. Her hip Heather Podesta + Partners balances out the wonky Republican law firm of Jochum Shore & Trossevin, which the NCIA hired at the same time to beef up its lobbying squad. It’s a one-two punch designed to give the five-year-old association greater access and a new mainstream sheen, and is a move that prompted no less than the buttoned-up Wall Street Journal to trumpet, “The marijuana industry is growing up.”

“Heather’s top notch…and there’s an amazing array of men and women who are moving into this space,” Democratic congressman Earl Blumenauer says of the NCIA’s new lobbying team and the booming industry it represents. He would know: Blumenauer is a leading advocate in Congress for legalization of marijuana. “It’s been a remarkable evolution for an issue that not very long ago was a political third rail. It’s not like the petroleum industry or organized labor yet, but it’s safe to say [the NCIA is] going to be a force over the next several years.” 

Lobbyists are a new thing for an industry that has until recently operated somewhat in the shadows. For perspective, between 2010 and late 2015, there were 310 lobbying filings with the House of Representatives clerk’s registry that mentioned “marijuana.” Search “bank” and you get 12,450 filings; “transportation,” 64,190; “energy,” 85,290.

The very existence of the weed lobby is a sign that marijuana is reinventing itself as a legit industry and a booming business. The industry includes growers, but also medical and retail dispensaries, extraction companies and testing labs, as well as ancillary sectors like lighting and security. In 2015, $5.4 billion worth of legal marijuana was sold in the U.S., up from $4.6 billion in 2014, and sales are projected to grow to $6.7 billion in the coming year, according to New Frontier, a marijuana-industry analytics firm. Groups like the Drug Policy Alliance—with backing from George Soros—the Marijuana Policy Project, Americans for Safe Access and, to some degree, the ACLU and NORML have been in the vanguard for years, decades in some cases, working with lawmakers focused on the social-justice issues inherent in drug policy. “We’ve always seen it as a social-justice issue, not as making money,” says Michael Collins, deputy director at the DPA’s office of national affairs. “With the medical-marijuana piece, it’s about patients’ access.”

For the weed industry, NCIA is a new type of Washington player, in part because the group focuses on the commercial aspect of the marijuana trade. “We want to show a different face of the industry, the growing small-business, job-creating, entrepreneurial side of the industry,” says Michael Correia, the group’s in-house lobbyist. “A constant, recurring theme we hear from members of Congress is they think it’s great to have the industry represented by professional lobbyists, and they think the message on the banking issue and the tax issue is a lot easier for members to understand and support.” 

Together with Correia, Podesta and NCIA’s other hired guns would hold some 50 meetings on Capitol Hill after signing on in the second half of 2015. “We are trying to hit every office,” Correia says. With 440 members of the House and 100 senators, that’s a lot of marble hallway to tread.
So, as more and more states are voting to legalize medical and even recreational marijuana — the industry prefers to call it “adult use” or “retail” marijuana — and Congress is inching toward loosening half-century-old policies banning weed at the federal level, the pot business is adopting the industry strategy of hiring lobbyists from both sides of the aisle to cover the bases among both Democrats and Republicans.

Joint Chiefs Lobbyist Heather Podesta (center) has taken on the National Cannabis Industry Association as a client.

As the weed lobby matures, there seems to be room for differing approaches. “In the end, we’re all going the same direction and we’re going to get there,” says Collins of the DPA. Though recently a change in route has become apparent. In April, the NCIA asked Cheech & Chong star Tommy Chong not to join in for a Capitol Hill lobbying day. It was an opportunity for the association to put its foot down and say weed isn’t about celebrities and stoners, but about respectable professionals. That means not only the business owners who comprise NCIA’s membership, but also their customers. In an e-mail sent around the same time, NCIA executive director Aaron Smith wrote to Chong’s team, “We are here to break ‘stoner’ stereotypes rather than reinforce them.” 

Indeed, NCIA’s top issues include allowing the marijuana industry to use banks and tax deductions “like every other small business in America,” Correia says. Uncle Sam’s prohibition has banned drug money from the banking system, which is largely federally regulated. That means it’s had to be a cash business, subject to robbery and tax evasion. The federal marijuana ban also means that the weed industry can’t take tax deductions for business expenses, which can be substantial. What marijuana advocates want is for the government to ease the federal ban and let states decide marijuana policy. 

It was 1971 when President Richard Nixon launched the War on Drugs that left marijuana classified by the Drug Enforcement Administration as a Schedule I drug, alongside heroin and MDMA, deemed by the federal government to have “no currently accepted medical use.” For comparison, methamphetamine remains classified as a Schedule II drug, which means the feds think it has less abuse potential and sends the message that the government views Willie Nelson as more dangerous than Walter White. But 45 years after Nixon, the tide has started to turn. Nowadays, it’s
not uncommon to hear members of Congress criticizing the DEA director for being too harsh on marijuana. (Even the commander in chief has evolved: In 1992 Bill Clinton said, “I didn’t inhale.” In 2006, Barack Obama[3] said, “I inhaled. Frequently… That was the point.”)

Yet the conflict between state-legal weed and federal law has never been more stark, with a judge in Colorado ruling in early January that the U.S. Federal Reserve Bank of Kansas City was correct in refusing the application of a Denver credit union to move pot money around the country through the Federal Reserve banking system. Judge R. Brooke Jackson said that Justice Department “prosecutors and bank regulators might ‘look the other way’ if financial institutions don’t mind violating the law” but that “a federal court cannot look the other way.” The Judge essentially called Congress out on the disparity, virtually echoing the NCIA, when he opined: “I regard the situation as untenable and hope that it will soon be addressed and resolved by Congress.”

Still, progress has been made. Indeed, despite the fact that the crusade against drugs started with Nixon, five decades of slow-going has given way to not only the marijuana lobby’s growth but also its greatest success, under Republican leadership in Congress. The number of lobbyists registered on marijuana has shot up since the GOP won control of the House in 2010, when just four organizations were registered to lobby on weed during the first quarter. By early 2011, it was six, including the new NCIA. At the beginning of 2015, it was 13 and by late last year it had risen to 19. 

Results are apparent: In 2014, with more than 20 states having approved medical and in some cases even adult use of marijuana, it became clear that voters wanted weed policy to change, and were not too stoned to show up at the polls. Members of Congress responded, emboldened to pursue an amendment that would block the Justice Department, including the DEA, from going after state-legal medical weed. Early in the year, the Republican-controlled House narrowly passed the amendment, an effort aided by two congressmen, a Democrat and a Republican from California. It had failed annually for some time, but once it passed on the floor, the GOP leadership made sure it got inserted at the bottom of page 213 of a massive year-end spending bill. By December, the Justice Department was officially defanged on the issue of medical marijuana. It was the biggest change in federal weed policy in about 50 years.

In coming months, it won’t go unnoticed among presidential candidates that swing-state Florida voted for medical marijuana by 57.6 percent in 2014. While this was a defeat, more than half of Florida voters were in favor—and it may be on the ballot again this year. Perhaps that explains why some Republicans have become friendly to medical marijuana and taken the states’ rights approach regarding federal preemption of state weed policies. As for the Democratic candidates, all have said they support medical marijuana and Bernie Sanders said he would vote for a Nevada measure legalizing recreational weed. Hillary Clinton[4] said that feds should let states make their own marijuana policy and has stated, “we have to stop imprisoning people who use marijuana.”

If recent years were about making sure the feds stay out of medical-marijuana legislation passing at the state level, the NCIA also focused on winning first-time votes in the Senate on key issues and running up the vote tally in the House. Correia notes that the group got within about a dozen votes of the House approving an appropriations amendment that would expand the 2014 DOJ ban protecting state-legal medical pot to include recreational marijuana in states that have approved it. “We increased our vote count in a more conservative Congress,” Correia notes. He sounds like just another lobbyist trying to get Congress to, say, pass a fat highway-spending bill or an act full of tax loopholes. And that’s just the point. 

Written by Timothy J. Burger

Endnotes:
  1. Washington, D.C.: http://dujour.com/cities/washington-dc/
  2. House of Cards: http://dujour.com/culture/taking-a-gamble-on-netflixs-new-house-of-cards/
  3. Barack Obama: http://dujour.com/wp-admin/post.php?post=70201&action=edit&message=10
  4. Hillary Clinton: http://dujour.com/culture/oscar-de-la-renta-exhibit-clinton-presidential-center/

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