Show Notes
Since 1996, when California became the first state to legalize marijuana for medicinal use, 46 more states have chosen to allow the recreational or medical use of the drug. Cannabis has evolved into a nearly $21 billion industry that lobbies, pressures, and rewards politicians who lookout for it.
And while most cannabis-related regulatory and legislative action is happening at the state level, some national-level political figures have leveraged their positions to make money from cannabis legalization. For example, in 2017, Paul Pelosi Jr., the son of House Speaker Nancy Pelosi, was named Chairman of the Board of Directors of Freedom Leaf, Inc., a consulting firm advising the budding marijuana industry.
Former Republican Speaker of the House John Boehner, who staunchly opposed legalizing marijuana when he served in Congress, is now bullish on the industry. As an official for the National Institute for Cannabis Investors, Boehner stands to earn an estimated $20 million if his group succeeds in persuading the federal government to legitimize marijuana.
In a new Drilldown podcast, investigative journalists Peter Schweizer and his co-host Eric Eggers are joined by Steve Stewart to discuss the research related to the Government Accountability Institute (GAI) investigation of “Cannabis Cronyism.” Stewart, who directed the cannabis research project – which was focused on cronyism related to cannabis regulation at the state level – also provides new information on one of the largest cannabis companies in the U.S. and the cannabis industry conflicts of an elected official who wants to be the governor of Florida.
As with any new market, laws and regulations inevitably will pick the winners and losers in the cannabis industry, whose value may be as high as $35 billion by 2025. And with economic activity regulated by the government, affected businesses seek an advantage by hiring insiders who have access to those close to the regulatory process. These conditions are ripe for corruption and cronyism.
Over the last five years, the FBI was engaged in criminal investigations related to legalizing marijuana in at least four of the seven states GAI reviewed. In addition, GAI’s investigation found evidence of cronyism and self-enrichment schemes connected to the regulation of cannabis in several states.
In Illinois, recently elected Governor J.B. Pritzker pushed quickly for legalizing recreational marijuana use, which benefitted his cousin, Joby Pritzker. Joby Pritzker was credited by advocates of the legislation with helping write the bill. He also had a financial interest in PAX Labs, Inc., which sells cannabis vaporizers. PAX Labs business increased significantly after marijuana use was legalized.
In Missouri, the FBI arrived in Jefferson City just after a medical marijuana law was passed. Agents remained visible throughout the licensing and implementation of the new law under Governor Mike Parson. The FBI was watching a legislator-turned-lobbyist named Steven Tilley who had managed to influence the licensing process in a way that benefited his lobbying business. Tilley’s lobbying clients more than tripled, from twenty-two clients to seventy-six clients during the medical marijuana licensing process.
In Florida, new information in recently released private text messages related to an FBI investigation of local government corruption in Tallahassee, reveal a connection to Trulieve, one of the largest cannabis companies in the United States. The text messages indicate that J.T. Burnette, the husband of Trulieve CEO, Kim Rivers, was in contact with a Tallahassee City Commissioner who voted for a moratorium on issuing cannabis licenses after Trulieve had already obtained a local license. The Tallahassee City Commissioner has since plead guilty to bribery and is cooperating with federal officials. The trial of J.T. Burnette on bribery allegations is set for July 12.
Also, in Florida, recent developments related to Agriculture Commissioner Nikki Fried indicate that ties to the cannabis industry could complicate her run for governor of Florida. Fried, a former marijuana lobbyist, filed amendments to her 2017 and 2018 financial disclosure days ahead of her campaign June 1 announcement. The amendments were related to almost $400,000 in unreported revenue from her activities as a marijuana lobbyist. In addition, questions have been raised about Fried’s role in crafting cannabis public policy in her elected position while her fiancée and other family members are deriving income from cannabis-related companies.
