When Californian’s went to the polls this November to approve the legalization of marijuana for personal use, little did they realize it would morph into a battle between unions and business.

The state is now slated to begin distributing licenses to marijuana businesses on Jan 1, 2018. Therefore, the Golden State’s legislature is attempting to iron out discrepancies between the already existing medical marijuana rules and the approved ballot measure.

The crux of the disagreement between the Teamsters union and business groups is deciding who is in charge of pot distribution.

…There are nevertheless key differences [between the ballot measure and current laws], including who can move marijuana from farms and manufacturers to market – hence the Teamsters’ involvement. Interests are debating the key question of whether businesses are allowed to grow, transport and sell their own products.

It also was written in a way that allows the Legislature to make some changes.

“We already did this hard work,” said Hezekiah Allen, executive director of the California Growers Association. “Then the flood came and washed everything away, and we have to start building again.”

The growers association is part of a coalition with the Teamsters, local governments, police chiefs and a West Sacramento distribution company called RVR.

The group supports the medical legislation it helped craft, which limited how much businesses can do to avoid monopolies, and are pushing to apply some of those guidelines to the new regulatory structure. Distributors like the approach, which is much like the system that governs the alcohol industry, because it gives them a mandatory cut.

In a nutshell, the Teamsters are assisting the growers association in a push for a distribution model that would force growers and manufacturers to pay a third-party distributor to transport products to retail market, similar to the alcohol industry.

Barry Broad, legislative director of the California Teamsters Public Affairs Council, acknowledges the potential gain to the Teamsters’ organization.

“I’m not hiding our self interest. This is a growing industry and we’d like it to grow unionized,” he says. “To have local government, organized labor and law enforcement all together is a pretty potent alliance. What’s on the other side? A couple marijuana people with illusions of grandeur?”

Steve DeAngelo is the owner the largest medical marijuana dispensary in the country (and possibly the world), president of The ArcView Group, an influential marijuana investor network that represents 650 farmers that Allen’s group represents. They fear the distribution model will kill their business because their already thin profit margins will be substantially reduced by distribution charges that could climb as high as 30 percent.

He and his members are completely unhappy with the proposed approach:

“It’s a payoff to the liquor industry,” DeAngelo says. “They’re using the same strategies, drawing from the same capital pool, and they have the same problematic culture as the liquor industry. There’s a thin fig leaf of being independent, but in fact this is the alcohol industry making a play for cannabis.”

DeAngelo’s group has now been joined by several other business organizations, including the California Retailers Association, California Business Properties Association and National Federation of Independent Business.

The groups, as well as the California Cannabis Industry Association and the marijuana investment fund Truth Enterprises, sent a joint letter to legislative leaders and Gov. Jerry Brown outlining policy recommendations, including a request to eliminate forced independent distribution.

“Our experience with alcohol is that the distributors have too much power,” said Bill Dombrowski, president of the California Retailers Association. “They control the flow of the merchandise. They control pricing to some extent. We want to point this out and make sure that people understand this is not a perfect model.”

…“This is a whole brave new world. We’re looking at the creation of an entire industry that could rival the wine industry, if we do it right. I think it’s a fascinating time.”

Imagine it: Marijuana as the new chardonnay.

With so much potential profit, and given the politics of California, I suspect even our pot will bear the union label at some point.


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