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Who Is Going To Own “Medical Marijuana? Or: Those Who Define The Issue Win The Issue

In December 2018, Tilray (which Bloomberg described in their news coverage as a “Canadian pot firm”) announced a global partnership with a division of Swiss drug giant Novartis AG to develop and distribute its “medical marijuana” in legal jurisdictions around the world using the Novartis Sandoz brand. At the time, Bloomberg quoted Tilray CEO Brendan Kennedy as saying the following:

“It just made sense for us to reach an agreement with a company like Sandoz, which is known for its focus on patients, its reliable supply chain, a well-established sales force and a global distribution network. If a product comes into a pharmacy with the Sandoz logo co-branded on it, or if a pharmaceutical sales rep is talking to a physician about a product that’s branded as Tilray and Sandoz, it lends credibility to that product.”

In other words, Tilray’s CEO said that when it comes to what is currently referred to as “medical marijuana,” the Company feels that it will be an asset if those products are sold and distributed by pharmaceutical sales reps of a pharmaceutical company — and so does the investment community, which drove Tilray stock up about 12% when the deal was announced. Nice. Will those sales reps also call on dispensaries? And are we to assume that if the same exact product did not banner the logo of a multinational pharmaceutical company it would be somewhat less of a product, at least as far as the doctor prescribing it or the end-users are concerned?

The answers to such questions are far from inconsequential, especially at this point. But let’s envision the extreme and the unlikely, for the purpose of making a point. Let’s envision that Tilray ends up being involved only with products that it markets through Sandoz or other pharmaceutical companies. Will Tilray still be considered a cannabis company or part of “big Pharma?” If Tilray had to prioritize its trade show budget, would it go to MJBizCon with its 25,000+ attendees and 1,000 exhibitors, or would it go to Arab Health Dubai, which is only the second largest healthcare trade show but attracts over 100,000 visitors along with 4,100 exhibitors annually?

And when Tilray (or the companies that are certain to follow in their footsteps) needs to determine where to put its political clout and/or its PAC money, will it support the passionate but still-fledgling effort being waged by the various cannabis trade associations, or would it get behind the nearly $30 million annual lobbying budget of its most important organization, the Pharmaceutical Research and Manufacturers of America, and its pharmaceutical cohorts such as Pfizer, which spends more than $11 million annually for its lobbyists, or Amgen, which spends about the same? Last year, 406 pharmaceutical companies spent more than $280 million for lobbying, supported by 1,441 lobbyists. So, what happens when and if the cannabis industry supports a certain way of crafting pending regulations that conflicts with the way the pharmaceutical industry wants it: would Tilray side with the cannabis industry or the pharmaceutical industry?

Think the stigmatization of cannabis is a thing of the past? Think again. There will be dramatic stigmatization, but in a totally different way. I don’t think we’ve seen even the nascent signs of the fierceness of the inter-industry fights that will emerge. Now that the legal cannabis business in the US is about $12 billion annually, and growing to more than $50 billion by mid-decade (to say nothing about the global market), it would be folly to think that other players in related businesses such as pharmaceuticals, spirits, tobacco and others will sit back and cede all those billions to those who leapt into the cannabis business when the risk and the obstacles were much greater.

That means: if today’s cannabis players want to control the future of their own industrythey need to increase and accelerate their own efforts now to define their industry in their terms. Otherwise, they may find themselves hopelessly behind the curve in trying to win the vital Washington game of using the legislative and regulatory processes to control the playing field for their unique vested interests. When that happens, we’ll confront all sorts of currently unanticipated obstacles that will favor the players from the already-large and powerful industries. They will want to swat away those pesky cannabis entrepreneurs — and will have the resources and budgets to do just that.

Wouldn’t it be ironic if, after all the decades of trying to build and finally succeed at establishing a cannabis industry, our own success attracts attacks from other industries that want the spoils of that success? The harsh reality is that if that happens it will be because the cannabis industry itself handed the industry it established over to other industries for lack of a strong campaign to Let Cannabis Be Cannabis.

 

Doug Poretz

Doug Poretz

Doug Poretz is a writer and independent public relations consultant, based in the Washington, DC area.  He attempted retirement after a 50-year career of starting, building and selling public relations and communications firms, including one that grew to more than 100 people and was for a time the largest independent PR firm in the region. But retirement didnt work for him, and he initiated an effort to create a national agency for the cannabis business. He decided that such an opportunity wouldnt be viable for his plan unless and until taxes and other issues were fundamentally changed.  Although he left the cannabis industry as a business opportunity, he stayed intrigued by the industry, and when he discovered the Zenabis story he wanted to know more. His interest resulted in this article.
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