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Thursday, February 2, 2023

Cannabis Will Not be the Next Big Tobacco

By Tim Beck, Safer Michigan Coalition Chairman

Many years ago, way before herb ever became legal in the U.S., my peers and I closeted together, sitting in circles, sometimes toking on stubby roaches and exercising our prophetic skills. A burning question back then was what would happen if marijuana were legalized. Would it be controlled by the government? Big Pharma? Big alcohol? Cigarette makers? The Coca-Cola Company? Could we just grow it like tomatoes someday?

The answer to this question, so far, is none of the above; especially when it comes to the Marlboro Man.

On December 19, 2022, news broke on the Dow Jones Newswire that multibillion dollar tobacco giant Altria, owner of Marlboro and other big cigarette brands, was terminating its funding of Canadian cannabis company Cronos Group and taking a tax loss of $483 million. Altria, which owns 45% of Cronos, abandoned its warrant to purchase any future shares of Cronos, at $19 per share. Cronos share price the day Altria made its announcement was $3.81. The stock had not traded above $6 in the last 12 months.

“Given the Cronos trading levels and the March 2023 expiry of the warrant, Altria has elected to abandon the warrant,” said an Altria spokesman. Altria shares rose 2% on the announcement.

With the exception of the marijuana media outlet Cannabis.net, which published a piece titled “Altria Walks From Cronos,” there was very little coverage of this major business news in the mainstream media or even the cannabis industry business press.

“While this is not the final bell in the ‘cannabis vs. big tobacco war’, it is certainly disheartening to see your opponent walk away with a smirk and say, ‘Yeah you just aren’t that interesting as a business model, we will cut our losses . . . and just walk away, thank you very much’,” Cannabis.net eulogized.

The publication went on to say, “With hundreds of analysts crunching numbers and looking at how to salvage this cannabis investment for the future, they [Altria] came to the conclusion [that to] ‘stop the bleeding’ . . . it is better to lose $500 million now than wait for upside in the future.”

Altria continues to own 45% of Cronos stock, for which it paid a collective total of $1.8 billion in 2018. At current share prices of $2.45, the company has seen an erosion of over $1 billion in market capitation, which it will likely never recover. When Altria first made its move to capture the world cannabis market in December 2018, the news was frightening to some and an exciting, even breathtaking, development for others.

For Cronos shareholders, it was a good day. The stock price soared over 30%. Altria and Cronos executives were effusive about what seemed like a brilliant business move.

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said its CEO Howard Willard.

Cronos’s top brass was even more excited. “Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” proclaimed Cronos chairman Mike Gorenstein. He went on to say, “The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. . . . It helps make sure we’re getting in front of the
regulators.”

Gorenstein’s reference to “the regulators” reflected the belief that Altria’s legendary ability to protect its tobacco business from aggressive government agencies like the Food and Drug Administration, the Federal Trade Commission and hostile members of Congress could also get marijuana legalized in the U.S.—and give the Cronos Group a competitive advantage. 

On the other hand, Altria’s move was met with fear and horror from both smalltime cannabis entrepreneurs and cannabis prohibitionists alike.

Arch prohibitionist Kevin Sabet, founder of Project Smart Approaches to Marijuana (SAM), immediately went on the attack. He asserted that cannabis culture was becoming a sinister dupe of the cigarette industry, which was guilty of killing millions of people with its products over the years. SAM’s new slogan in its antimarijuana crusade became “preventing another big tobacco.”

National Review Online columnist J.J. McCullough wrote a long column making comparisons between cannabis and big tobacco. “We know the tobacco industry funded studies and swayed results to fit their narrative that cigarettes won’t kill you,” he said.

“As was the case with smoking tobacco, smoking marijuana is said to prove you’re sociable, hip, and modern,” McCollough continued. “As with tobacco, marijuana is portrayed not only as largely harmless, but as objectively good for you, with a credible function as self-medication for all sorts of ailments. . . .

And as with the tobacco industry, a cash-flush marijuana industry is eager to use its wealth to slant scientific study and political debate, lest its flattering claims begin to sire organized suspicion.”

Well, dear readers, some dark fantasies do not come true.

Kevin Sabet and his acolytes are now minus a talking point.

Those of us in our community who have been alarmed by the possibility of some kind of cannabis monopoly, rigged to benefit those who already have way too much money and control, can rest easier.

Altria could have continued for years burning cash to prop up Cronos Group. Let’s give them credit for their commonsense decision to exit the market. The political paralysis in Washington, D.C., over cannabis regulation will go on for years. The illegal cannabis market in the U.S. will be thriving for a very long time. These realities are the equivalent of a death sentence for big companies who dream of monopolies.

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World News: Czech Republic Proposes Legalization of Adult-Use Cannabis

Czech Republic is drafting the laws to introduce regulated cannabis use. These laws could potentially be reached by the end of March of this year. The decision has followed after Germany announced that they intend to legalize cannabis for adult-use.

Since 2013, the use of cannabis for medical use, has been legal, as well as decriminalizing the possession of 15g of flower, 5g of resin, and growing up to 5 plants since 2009. The recreational users could potentially receive a $500 fine though. 

The draft for adult-use will include rules for taxation, legal cultivation, sales, exports, as well as cannabis clubs. This would create laws around who is permitted to produce and sell cannabis. In order to reduce the black market of cannabis, they plan to use the three pillars - reform, regulation, and taxation, while hoping to regulate the market with Germany, in order to have greater export opportunities.

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World News: Tilray Lays Off Nearly 25% of Employees in a Portugal facility


Tilray, with their headquarters out of Canada, is a Pharmaceutical company, with operations in 7 countries. They are a global leader when it comes to many aspects of cannabis, including research, cultivation, processing, and distribution.

In their medical facility in Cantanhede, Portugal location, they employ roughly 200 people. In order to keep up with the demand changes in our current economy, Tilray will be laying off 49 jobs within the next few months. With the progression of legalization in both medical and adult-use cannabis, Tilray needed to make some changes to “rightsize” their medical facility by decreasing by nearly 25%. These changes will affect many areas of the company, from production, supply chain, to even IT positions.

CEO Irwin Simon has stated that they are considering producing fruits and vegetables, while waiting to see if the United States will legalize cannabis adult-use federally. This is to keep utilizing their facilities, rather than letting them sit idle.

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World News: Egyptian Actress Arrested After Returning Home


Egyptian actress Menna Shalaby was flying back home from New York when she was met with an unexpected surprise at the airport. After arriving in Cairo International Airport, Shalaby was detained for suspicious objects in her carry-on. Shalaby’s belongings were put through the X-ray machine, which showed “the presence of organic densities,” and were set aside to be examined for narcotics.

Shalaby was detained for allegedly carrying cannabis, which is illegal in Egypt and punishable by law. She was quick to deny possessing any narcotics in her belongings, stating, “After a while, I found many people and officers looking at a green box and telling me that it contained marijuana. I told them that this is not true and it was normal makeup.” She was also accused of having cocaine in her possession, but stated, “I told him that I do not consume them in the first place but then they told me to wait a while.”

While coming from a foreign country with remnants of narcotic substances in one’s bloodstream is not illegal, bringing narcotics with the intention of use is still illegal in Egypt. It was said that she had the intent to use, and not to share the narcotics with anyone when she arrived home.


 

The next day, Shalaby was released on bail in the amount of EGP50,000 (US1,838.20). The possessions were seized and sent to a chemical lab to confirm that they were cannabis and hash. She still denied having any narcotics in her possession, and her lawyer quickly attempted to make a plea during the trial hearing, stating that the actress had no connection to the seized substances.

On January 5, 2023, Shalaby was to appear in court for these allegations, but never showed. With five testimonies submitted to the prosecution by the airport personnel who inspected the belongings, Shalaby was given a one-year suspended prison sentence by the Cairo Criminal Court. She was also fined EGP10,000 (US367.60), and sentenced to three years’ probation.

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World News: Canada Increases Beverage Limit Nearly 5 Times the Original Amount


As many parts of the world try to determine the correct dosage for the different types of cannabis consumption products, in December, Canada faced the same issue. Officials were trying to decide the new equivalent for canned beverages.

When the Cannabis Act began, Canadians were not able to carry more than 30 grams of dried cannabis or its “equivalent” at any given time. This caused some confusion when trying to create these conversions. Canned beverages could not be purchased if they contained more than 10 mg of THC, but a person could purchase 50,000 mg of THC in the form of 100 bottles of cannabis oil spray.

After years in the making, on December 2, 2022, Canadian officials were able to amend the Cannabis Act to increase the purchase amount of cannabis-infused beverages that a person can buy in a single transaction. When officials initially offered canned beverages, they allotted for 1o mg of THC per canned beverage purchase, which was equivalent to 5 standard-sized 12-ounce beverage cans containing only 2 or 2.5 mg of THC per can. Now, people are allowed to purchase up to 578.2 fluid ounces, still at 2 or 2.5 mg of THC per can, equivalent to 48 standard-sized 12-ounce beverage cans. 

“Canadians can finally purchase a six-pack, 24, or up to 48 of their favourite cannabis beverages to enjoy with family and friends, which represents a win for consumer choice as this innovative category takes a leap forward,” wrote David Klein, chief executive officer of Canopy Growth Corp., a licensed cannabis producer, in a statement.

With the increased amount available, Canadian officials are still enforcing their strict regulations to ensure that either accidental consumption or overconsumption does not occur. All the packaging must be childproof and each can will have a strict THC limit per can. Enforcing these restrictions to ensure that people are going to drink the beverages responsibly will help lawmakers and activists in the future when trying to expand their limits on other cannabis-infused products."

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State of the States: Californians Hit on Death Row Cannabis

Known for decades for producing hip-hop hits enamored by stoners, Death Row now hopes
stoners will be hitting on their new cannabis line.

On December 24, 2022, Snoop Dogg announced that
the famed record label would be launching its own
cannabis brand in collaboration with Cookies locations, just in time to toke in 2023, along with esteemed curator and cultivator AK, best known for winning strains like Studio 54 and Shirazi by exotic breeder DEO.


Its premier product will be flower, followed by diamondinfused pre-rolls, which Death Row Cannabis plans to launch shortly thereafter.

While this may be a new game for Death Row since Snoop is now at the helm, this is not Snoop Dogg’s
first time dipping his paws into the cannabis industry. In 2015, Snoop Dogg launched his first cannabis line in Colorado called Leafs by Snoop.

When launching Leafs by Snoop, he reportedly told the local newspaper, The Denver Post, “Since I’ve been at the forefront of this movement for over 20 years now, I’m a master at marijuana.”

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State of the States: Kansas Cancer Patient Cited for Vaping


Over the holidays, a story that involved a terminal cancer patient from Kansas getting raided in his hospital room by three cops went viral in many advocate circles. The knee-jerk reaction by most, as expected, was anger and hate toward the police who could conduct such a travesty against a dying man.

As the story, which began as an opinion piece written prior to knowing the entirety of the situation, circled sources as news, the police department involved began getting threats. Eventually, Hays Police Department chief Don Scheibler felt the need to go on record to clarify what had happened.

On December 19, 2022, his police department was notified by the hospital that a patient was found using an illicit device. Kansas, being one of the three holdout states along with Nebraska and Idaho, still has protocol in place for calls, especially those made by hospitals. 

The chief told local news sources that the two, not three, responding officers followed protocol. They first went to hospital staff who had already confiscated the vape in question. From there, they went directly to Mr. Bretz to get his version of the incident, not knowing he was terminal. Mr. Bretz was undoubtedly upset about what was happening to him, but the cops, in turn, listened to his plea. They issued the citation as directed by policy but drove directly to the office and asked the supervisor and prosecutor to promptly drop the ticket due to the patient’s terminal diagnosis.


Just like that, it was all dropped, even before the first opinion article was released to go viral, reminding those in the media that there must be vetting and research done prior to spreading certain opinions and
stories as legitimate news.

While this magazine does not condone any of the actions, whether by the police or the hospital, this true story also acts as a reminder that while most of the country has seen legalization or decriminalization, there are still the three holdout states that would rather profit from criminalizing cannabis patients and users over legalizing and taxation.

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