The threat of Big Tobacco taking over the cannabis industry is closer than ever
For more than half a century, rumors of behemoth companies taking over the weed industry have sewn themselves into the fabric of fact. Now that we’re closer than ever to full legalization, those rumors look closer than ever to becoming reality.
One of the strangest things about the marijuana green rush so far is that big companies are reluctant to dip any toes into the rapidly expanding market. Publicly, at least.
If it were any other product, it would be a natural opportunity for any of them — a no brainer. However, Big Tobacco (one industry set up for ultra-quick expansion of it) claims it’s going to ‘Just Say No’ to marijuana. Even if any companies answer the phone to speak about it — which is harder than it sounds — most respond as if it’s an insult to ask.
British American Tobacco, the makers of Lucky Strike, Pall Mall and Kool, was one of several to ignore emails and calls for days. Finally, after phoning an office in London saying it was an “after hours, urgent question,” a spokesperson responded. She acted as if she’d heard the “Are you guys interested in marijuana?” question a thousand times before.
“No,” she said abruptly. “That’s something we’re currently not interested in pursuing.” She then ended the call quickly after asking not to be quoted by name.
Just now finding a solid foot to stand on, some in marijuana fear powerful players from several industries: Big Pharma, Big Box Stores and Big Beer. But Big Tobacco inspires an especially strong level of “paranoia,” says Chris Walsh, editor of Marijuana Business Daily — which covers this stuff as closely as any other publication.
“They’d be stupid not to consider this,” he adds. “If they aren’t, those executives aren’t doing their jobs.”
After all, Big Tobacco knows how to grow and harvest a plant en masse. It’s also pumping millions into e-cigs, a technology that could easily be switched over to cannabis oil in seconds. There are patents on methods of handling the trichomes on plant material that point out, explicitly, these methods can be used on the cannabis plant.
So naturally, the marijuana industry is bathed in rumors about Big Tobacco buying up warehouses in Denver and land in NorCal, signing secret deals with celebrities and patenting cannabis technology and strain names. It’s been this way for a while.
The nightmare to some is that it’s perched just out of sight, waiting for legalization to then swoop in and snatch up the fledgling marijuana industry like a baby chick out of the nest to raise as its own.
But it’s already happening, with some companies owning the moves like a badge of honor.
“We are already in it,” says Thomas James, Vice President of 22nd Century, maker of Red Sun and Moonlight cigarettes. The company he works for isn’t Big Tobacco, though. It’s medium tobacco. Tobacco light. It’s busy taking the money made off cigarettes and pouring it into cannabis research, strategizing and branding. James claims the company already has 200 patents and deep affiliations with some of the best cannabis scientists in the world. There has even been purchases of basic research into the genetic makeup of the plant.
If his team can figure out genome secrets that no one else has, it’s possible to create better pot and corner the market.
James says they’re already well on their way. The company will head to Canada first, since the ruling party has promised to introduce legislation this spring to legalize the plant nationwide. His voice is full of the excitement of a new industry, one he thinks will be a huge new source of cash in which, quite literally, the customers are dying everyday without it.
And is 22nd Century alone in its desire to sell weed? Hardly.
“All the big companies … ,” James says with a pause, “they all want to get into it.”
James goes on to claim “multiple people” in the biggest firms have confided in him about jumping in after it feels safe to do so. And he is in a good position to hear it, 22nd Century performs research on tobacco for one of the largest companies in the world: British American Tobacco.
The discrepancy is the newest chapter in a 50-year-old history: the difference between tobacco companies’ public denials about pot and their private plans to dominate it.
America’s situation around marijuana in the ‘60s is eerily similar to what it is today. It was smoked openly and enthusiastically in some parts of the country, while being reviled and vilified in others. A counterculture of acceptance boomed at the exact time President Nixon was launching his controversial War on Drugs. In 1969, as in 2017, tobacco companies were in a difficult position: naturally wanting in on a new and popular market, but forced by politics to deny any desire to do so.
And deny it they did. In September of 1969, Businessweek Magazine quoted one executive that said, “No company in the industry has had anything to do with marijuana, nor does anyone want to.”
Another said, “We have enough trouble dealing with the cigarette health scare without selling drugs, too.”
Other tobacco bigwigs in that era called the rumors of interest in pot “ridiculous” and “blatantly false” — American Tobacco said it was “nothing short of irresponsible reporting.” Time Magazine even apologized for running a story suggesting that tobacco firms were eyeing the cannabis business.
Some of those statements might have been true. But memos and secret documents obtained a few years ago by UC-San Francisco contradict at least a few of the heavy denials.
Buried among 80 million internal documents the government squeezed out of big tobacco companies as part of a massive settlement, professor Stanton Glantz and his colleagues found pages and pages of smoking guns showing big companies were deeply interested in pot, both as a competition and as a potential new source of revenue. Especially in the late ‘60s and early ‘70s, major cigarette companies looked fervently into joining the marijuana market.
Some even thought it was on the verge of being legalized. “Just living among young people, I can predict that marihuana smoking will have grown to immense proportion with a decade and will probably be legalized,” one scientist working with Philip Morris wrote to his bosses in 1969. He went on to say, “the company that will bring out the first marijuana smoking devices will capture the market.” He also advised “a research program on all phases of marihuana.”
His bosses listened, and moved in secret. They asked a federal counter-narcotics officer for a sample of government marijuana for them to use for research, further asking him to keep it quiet. “We request there be no publicity whatsoever,” wrote a Philip Morris exec to a chief in the Justice Department’s narcotics bureau.
The agent agreed to keep it on the down low. “I do not feel there is any bar to maintaining the confidentially you request,” the chief, Milton Joffe, wrote.
British American Tobacco actively researched pot, too. The once-secret records show the company had a program called “Project Pot,” a plan to produce “cannabis-loaded cigarettes.” The firm’s head science advisor called blunts a “natural expansion of current smoking habits” and said that if pot became legal, such cigarettes would be “a change in habit much like moving to cigars.”
These days, asked about past interest, British American Tobacco brushes off any history with pot. “The 1970s were a long time ago,” the company told the Los Angeles Times in a 2014 statement. “Today, we have no interest whatsoever in participating in the marijuana market.”
Reynolds, like British American Tobacco, also distances itself from the past. “I cannot begin to speculate on the thinking of management more than 20 years ago,” a company spokesman also told the Los Angeles Times in 2014. “Regarding the current cannabis market, we are not pondering any expansion or involvement in that market, nor do we conduct any research into marijuana.”
References to pot dry up after 1998 in the secret internal documents. Realizing the government was likely watching over their shoulders, companies began to “talk through lawyers” and encrypt communications, observers say. “They have fewer leaks than the CIA,” Glantz adds. So big tobacco’s exact thinking today, aside from what is said via press releases and abrupt phone conversations, is tough to know.
Yet rumors in the industry continue to persist.
One such fear revolves around land. Glantz — and many others — have heard Altria (the new name for Philip Morris) is buying up prime pot-growing acres in Northern California. A pot writer there, Kym Kemp, dismisses it as a “wild rumor.”
“I’ve never seen the slightest evidence that this is happening,” she says. But others note the companies wouldn’t have to buy new land at all. They own enough already across the country to manage a good size industry. As is, this rumor appears to be unsubstantiated.
Regardless, the marijuana world is changing fast, and full legalization could happen more quickly than people think. Even though our current administration is relatively mum or inconsistent on the recreational end of things, BMI Research (a leading analyst of 24 industries and 200 global markets) said in a recent report “the timeline for full marijuana legalisation in the U.S. will accelerate, especially in the context of newly passed initiatives in several U.S. states. The most likely outcome will be that Congress passes a law removing marijuana from the Schedule system completely as opposed to rescheduling the drug.”
BMI notes bipartisan support from congress members. And Canada — where 22nd Century is making moves — is likely to spark the global fire much sooner than anywhere else.
The second that happens, nearly every insider believes some big industry will muscle in on marijuana. In fact, a half-dozen big companies from other industries are already tiptoeing toward legal weed. Scott’s Miracle Gro is investing $500 million in hydroponics. Rob Sands, CEO of the giant company that owns Corona and Negra Modelo, claims his team is interested in cannabis drinks, too. “There’s a lot of money involved,” he told Bloomberg. “It’s not going to be left to small mom-and-pops.”
Even Vicente Fox, a former president of Mexico, says he might grow pot on his farm. If past presidents are interested, why wouldn’t Big Tobacco be?
Of course, there remains the small but relevant question of whether or not, if big tobacco grows weed, people will smoke it. A dozen Denver/Boulder cannabis lovers who were asked say they assume it’ll be shwag, and they wouldn’t touch Marlboro’s marijuana with a ten foot bong. Thomas James, the tobacco company V.P., makes a convincing case otherwise. He believes tobacco companies can create a moveable product.
Denver/Boulder homegrown pot connoisseurs probably aren’t a viable target market, he says. After all, Franzia doesn’t sell much box wine in Sonoma, and StarKist tuna doesn’t fly off the shelves in Japan. But in Kansas or North Dakota, where many smokers love marijuana but can’t necessarily tell bud from Budweiser, terpenes from topsoil, American Spirits with Cannabis Flakes might take off.
In the early 1900s, close to half the American population — mothers, farm workers, doctors — chain smoked tobacco to relax. Over the following century, selling it to them was crazy lucrative. If someone had invested $1 in tobacco in 1900, Glantz reports it would be worth $6.3 million today.
Anybody not interested in that prospect isn’t very savvy. And no matter what they say in public, Big Tobacco didn’t get Big by being dumb.
[photo: tobacco farmer on tractor, public domain]