WASHINGTON – The cannabis industry is dramatically scaling back its presence in Washington.
Curaleaf, one the largest cannabis companies in the world, spent nearly 40% less on lobbying in the first half of 2023 than it did at its peak in 2019. Others like Columbia Care and Pax Labs got rid of their entire lobbying teams. Of the four major cannabis industry coalitions that have been pushing for federal legalization of marijuana the longest, one has seen its revenue cut in half; two others appear to have folded completely. Together, their spending on advocacy has dipped by more than 50% since 2019, back when federal weed lobbying was at its height.
The pullback is the clearest signal of the turbulence facing the cannabis industry. Cannabis companies are losing money, even as marijuana’s acceptance is higher than ever before. The financial woes are, in large part, a consequence of cannabis remaining illegal at the federal level. As a result, cannabis companies are ineligible for tax breaks, and often cannot even access business loans or open bank accounts.
“The cruel irony is that businesses are forced to cut back on their government relations spending when in fact that advocacy [is] what’s needed in order for the industry to actually succeed,” said Aaron Smith, the co-founder and CEO of the lobbying group National Cannabis Industry Association.
Advocates say the exodus is premature — and a potential death knell to the industry’s progress thus far in Washington. While Congress has so far failed to pass a major cannabis law, both Republicans and Democrats in Congress have introduced legislation to legalize the drug federally. Last July, even Senate Majority Leader Chuck Schumer introduced his own legislation to decriminalize marijuana federally. A closely watched bill that’s meant to make it easier for cannabis companies to get bank accounts also has over 100 cosponsors and has already received a hearing in the Senate this year; it’s passed the House a total of seven times.
“If they weren’t getting wins with lobbyists, how are they going to get wins without them?” asked Don Murphy, an independent lobbyist on cannabis banking who previously lobbied for the advocacy organization Marijuana Policy Project. “It’s like leaving the game in the third quarter.”
Some of the lobbying efforts have been taken up by a new coalition which is spending big in hopes of revamping the cannabis industry’s strategy on Capitol Hill: the U.S. Cannabis Council. That group formed in 2021 with the goal of unifying the cannabis industry’s message on Capitol Hill. It spent $150,000 on lobbying last quarter and is expected to spend as much or more in the coming months, according to a spokesperson. The group has also launched a super PAC dedicated to cannabis reform.
“We want to be a big tent organization,” said David Culver, the group’s senior vice president of public affairs. “Everybody realizes that if we have a singular and unified industry voice … that we’re gonna have a lot more success.”
While all companies are eligible for membership in the new group, they must contribute at least $10,000 annually to be eligible for a board seat, according to the group’s website.
That means that the group’s leadership consists almost entirely of large cannabis companies, known as multi-state operators, and other national companies, like software and packaging companies.
Another lobbying group, American Trade Association For Cannabis and Hemp, which began formally lobbying in late 2019 but has kept a relatively low profile on Capitol Hill, has also modestly increased its lobbying in recent months. The group has spent $50,000 so far this year on lobbying. In 2022, it spent a total of $50,000 for an entire year of lobbying.
In the first half of 2019, there were four major national trade associations in Washington lobbying on cannabis: the Cannabis Trade Federation, the Global Alliance for Cannabis Commerce, the National Cannabis Industry Association, and the National Cannabis Roundtable. The first two in that list appear to have folded entirely; leaders did not respond to requests for comment from STAT.
The National Cannabis Industry Association, meanwhile, has dramatically decreased its spending on federal lobbying amid its own financial woes. And the fourth group, the National Cannabis Roundtable, which represents some of the nation’s largest cannabis companies and counts former House Speaker John Boehner as a co-chair, has kept its lobbying spending relatively steady.
Every source STAT spoke with acknowledged that the cannabis industry is spending less lobbying Capitol Hill than in previous years, but some argued that the industry is also more carefully honing its lobbying strategy.
“There may be less company spending, but the way that I think companies including ours are spending is more pragmatic and it’s much more focused,” said Adam Goers, the senior vice president of corporate affairs for Columbia Care, which operates cannabis dispensaries in more than a dozen states. Goers’ company recently fired its two outside lobbying firms but is in the process of interviewing new lobbyists, he said. It joined the U.S. Cannabis Council, too.
The lobbying group explicitly representing small cannabis companies, meanwhile, has struggled particularly hard in recent months and has been forced to dramatically cut its lobbying due to a rapid decline in membership.
In 2019, that group, the National Cannabis Industry Association, boasted nearly 2,000 members. It has since seen that number cut in half. As a result, the organization’s operating revenue in 2021 was just $1.9 million, less than half of the $4 million it was working with in 2019. The organization has also gone through two rounds of layoffs, which hit the highest rungs of the organization including its chief operating officer.
The group now employs just six full-time staff members; just one is a registered lobbyist. The group has spent $100,000 on lobbying so far this year, according to recently posted federal disclosures. It spent $285,000 on lobbying in the first six months of 2019.
“It was pretty much the last thing to go,” said Smith, regarding NCIA’s lobbying operation. “We have made cuts across every part of the organization.”