Trump’s Cannabis Chaos Is Just Good Business

Trump’s Cannabis Chaos Is Just Good Business

President Trump is giving Americans a lot of mixed signals on cannabis. While the heightened anxieties and ramped up regulation tends to be bad for patients and small businesses in legal states, it is excellent for Wall Street investors. And, with one of these many investors likely being Trump himself, it is time for the cannabis industry and movement to stop running scared and start calling out this for-profit hypocrisy that is benefitting only Wall Street financiers and state governments at the expense of the people who are already the most victimized by the War on Drugs.

The anxiety-inducing news of a secret anti-cannabis campaign brewing from within the White House drew out strong statements from both the industry and members of Congress.

“President Trump is flailing on marijuana policy, sometimes saying the states should decide, while also allowing the Attorney General and other prohibition supporters in his purview to run amok. If the White House is actually spreading misinformation about marijuana to undercut states’ rights, it’s appalling but not out of the ordinary for President Trump and his gang of prohibition supporters,” U.S. Representative from Colorado Jared Polis said in a statement.

And in the midst of all this, there is a storm brewing for the West Coast’s cannabis industry that could result in a lot of growers going back to the illegal market, lots of business closures, lots of cheap acquisitions by Canadian companies and an economic collapse in the traditional cannabis growing regions that relied on these community sustaining businesses. Thanks to a nationally legal medical cannabis market since 2013, Wall Street investors have been lining up through Canada’s stock exchanges to carve up America’s weed market before federal law changes stateside and these companies can get on exchanges in New York.

Cannabis Collusion

While early West Coast markets were truly “free and fair” in that there was zero regulation and a lot of innovation, in the more conservative parts of America the industry has been so over regulated that only a tiny amount of the wealthiest business owners can get in. Take for example the nation’s second and third most populous states, New York and Florida, which also happen to be the primary residences of President Trump and many of his pot-loving friends like Roger Stone and former campaign pollster Tony Fabrizio (whose son was once a prominent hashmaker for Terra Tech Corp (TRTC).

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Both states started with just five vertically-integrated licenses that function more like cartels than a straight up oligopoly. And what is the difference between a cartel and an oligopoly? Simply put, collusion.

While the word “monopoly” gets thrown around a lot, true monopolies rarely exist in the United States because most of the time they are illegal. What we have instead are “oligopolies”, where most of our markets are owned and controlled by just a handful of small players who compete against one another. While all oligopolies aren’t cartels, all cartels are oligopolies. The difference is that in an oligopoly the players are true competitors, in a cartel they have the ability to work together to price fix.

By making the licenses rare, expensive and complicated, the same large corporate money that profited from prohibition is effectively already divvying up market shares east of the Rocky Mountains before there is a chance for natural competition from small businesses and home cultivators. West of the Rockies, the cottage industry that arose over 20 years of free medical markets is going to find that it is time to sink or swim. With over-regulation and oversupply in post-legalization California and Oregon, illegal market farmers will continue to provide work for law enforcement and small businesses will be forced to take buyouts if they are unable to sell product at below-cost rates.

A Non-traditional Profit Maker

Today in the nation’s largest cannabis-producing region, Oregon and Northern California, wholesale cannabis prices are bottoming out just as light deprivation and outdoor farmers are preparing to harvest their crops and further balloon the in-state legal supply gluts.

Canadian corporations like Canopy Growth, which recently received a $4 billion investment from alcohol giant Constellation Brands financed by Merrill Lynch (one of the culprits of the 2007 economic crash), can afford to undercut small farmers and devour market share through this harvest season, and every year after.

The price of bud, for years, has not been priced like a traditional agricultural commodity because it has only been sold on high-risk illegal markets. If national cannabis policy reflected science and reality, the whole plant would be de-scheduled, decriminalized, and the states would be left to regulate commercial markets. But if that were the case, these Wall Street investors wouldn’t be betting so big.

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All levels of government and the politicians that comprise them benefit from choosing to regulate out small local business owners in favor of deep-pocketed donors with big investment opportunities. Simultaneously, all levels of government are continuing to pump up anti-cannabis lies and propaganda to maintain the criminal element.

A great example of this is U.S. Representative from Orange County, California, Dana Rohrabacher, co-author of the Rohrabacher-Farr Amendment, which prohibited the federal government from using federal law enforcement funds to go after state-licensed and legal medical cannabis businesses. Rohrabacher is both a staunch ally of President Trump and The Kremlin. He also happens to share a significant campaign finance resource, Dominion Capital, with Terra Tech Corp. (TRTC), a publicly-traded multi-state cannabis company with close ties to President Trump’s campaign. (Dominion also has some bizarre ties to Russian money). A crackdown on California or Oregon’s illegal in-state market — whose producers are constrained by only in-state demand — would certainly benefit investors in a stock like Terra Tech, which operates one of its Blum dispensaries within Rohrabacher’s district.

So is President Trump invested? This is as of yet unconfirmed. But, as Trump is the only president in modern history not only to not divest from his business interests while in office but also not to disclose his tax returns, his close ties to people who are clearly invested in the industry point to the strong possibility. More importantly, if Trump were invested in Terra Tech, or other larger publicly-traded Canadian corporations, he would certainly be setting himself up to profit amid the chaos and illegal market crackdowns. Who could blame him? That’s just how business is done in America.