The momentum for cannabis regulation is growing around the world. The US is debating federal legalisation. Eighteen states—around a third of the US population—have already legalised non-medical cannabis since 2012. Uruguay legalised recreational use of cannabis in 2013, Canada in 2018, and Mexico is considering following suit. In Europe, Switzerland and Luxembourg have announced formal moves to implement a legally regulated market. The Netherlands is finally establishing a legal supply for its long-tolerated “coffee shop” sales, and Malta is allowing people to grow their own plants while eyeing more formal legalisation.
The arguments for such moves are founded in evidence. Prohibition has proved costly and ineffective—failing to deter use or eradicate supply. By regulating cannabis, governments can regain control of the market, including by managing the quality, potency, and price of available products, and how and where they are licensed to be sold. Governments can take profits away from organized crime groups and generate significant tax revenue, while ending law enforcement practices that have disproportionately criminalised and incarcerated minorities and marginalised populations. But as the debate shifts from questions of whether we should regulate cannabis to how to do it responsibly, there are important lessons to be learnt from the successes and failures of regulating other drugs. Not all regulatory frameworks are equal, and the history of the tobacco industry is a testament to that.
In a new report published by the International Drug Policy Consortium (IDPC), in collaboration with other NGOs, we explain how major transnational tobacco companies have been complicit in the illicit tobacco trade—playing an active role in smuggling their own cigarettes to enter protected markets, circumventing effective health regulations, and lobbying governments to decrease taxation or any form of regulation that impacts their bottom line. They have deployed their legal, lobbying, and PR machines to maximise profits, with little concern for the health and social costs of their actions. Many of these schemes were revealed in the late 1990s, thanks to a trove of internal tobacco industry documents released as part of various lawsuits.
Transnational tobacco companies have also sought to diversify into other products. Perhaps unsurprisingly, this has included increasing investment in the emerging legal cannabis industries with obvious similarities to tobacco markets. British American Tobacco has bought a nearly 20% stake (US$ 175.8m) in Canadian cannabis producer Organigram, while Altria (parent company of Philip Morris USA) has invested US$1.8bn for a 45% stake in Cronos, one of the “Big Four” of the Canadian cannabis industry, and Imperial Brands have bought almost 20% (or US$93.6m) of Auxly Cannabis, another Canadian cannabis company [see report].
Major cannabis companies are increasingly mimicking some of tobacco companies’ tactics—including pushing governments to crack down on smaller competitors, funding research which fits their own commercial and reputational interests, or exploiting traditional cannabis growers in lower-income countries, and lobbying against public-health oriented regulations and in favour of more industry-friendly ones.
It doesn’t have to be this way. A laissez-faire, commercialised corporate model is only one of many regulatory market models at our disposal. Small scale home-growing and not for profit membership based cooperatives have successfully catered for a proportion of the market informally in Spain and now formally in Uruguay. State monopolies on retailing (for example in Quebec, Canada) or production and distribution (as in Uruguay) can prevent risks of corporate capture and monopolisation. The equity programmes being pioneered in some US states can ensure a more level playing field for small businesses, and facilitate participation of negatively impacted communities in new markets, while fair trade and sustainable development principles—well established in other international agri-businesses—can be built into emerging international trade to protect the interests of traditional cannabis growers in the Global South.
Dissatisfaction with the evident failures and harms of the prohibitionist status quo does not mean we should settle for an iniquitous legal cannabis market dominated by corporate actors. It is vital that lessons are learnt from decades of tobacco industry lies and manipulation, and the valiant efforts of tobacco control advocates, research, and policy makers to push back against them. Building new legal cannabis markets from scratch provides a unique opportunity to prioritise public health, social justice, human rights, and sustainable development in ways that have proved near-impossible to retro-fit into an entrenched tobacco industry.
Benoît Gomis is an independent consultant on the illicit trade in legal and illegal drugs. He is a Research Fellow in the Pandemics & Borders Project led by Simon Fraser University, a Sessional Lecturer at the University of Toronto, and an Associate Fellow with Chatham House. Twitter: @benoitgomis