June 3, 2014

Report: Big Tobacco Prepared to Enter Cannabis Market

Big Tobacco and other large industries are poised to enter the cannabis market if federal laws change, and they could eventually dominate the sector, a new report in a health policy journal concludes.

“Policymakers and public health advocates must be aware that the tobacco industry or comparable multinational organizations (eg, food and beverage industries) are prepared to enter the marijuana market with the intention of increasing its already widespread use,” a piece in the most recent issue of the Milbank Quarterly suggests.

The report said that advocates and policymakers should be prepared to address regulations, such as licensing laws and restrictions to marketing, to prevent “the tobacco industry’s takeover of the market.” It also urges policymakers to study the successes and failures of regulating tobacco in order to craft rules to govern the cannabis industry.

Cannabis professionals regularly speculate that Big Tobacco will, at some point, enter the marijuana market. This speculation has always hinged on the changing of regulations at the federal level.

Representatives from both British American Tobacco and R.J. Reynolds Tobacco Co. said they currently have no plans for expansion into the cannabis market. But the Milbank report – citing recently unearthed documents – found that major cigarette brands began researching cannabis opportunities in the late 1960s and early 1970s despite denying it at the time.

mjfactbook14storyhorizontal336 e1397581896865 Report: Big Tobacco Prepared to Enter Cannabis MarketAn executive with Philip Morris even asked the Justice Department for samples of marijuana so that it could perform research on the plant. The executive asked the government to keep the request silent. A Justice Department representative reportedly agreed, saying the company could also sidestep the FDA’s review of its plans.

One internal memo from the American Tobacco Co. at the time reports that executives learned Philip Morris was granted a “special permit” to grow and manufacture cannabis extracts. The head science adviser with British American Tobacco even drafted a research plan for cannabis-loaded cigarettes.


10 Comments:

  1. …this eventuality will indeed happen down the road.
    The tobacco lobby owns way too many politicians for this not to occur. It’s not all bad, though. We will have brand loyalty and a huge variety of recreational “flavors” and strengths to choose from and they will be strictly controlled…

  2. While it’s inevitable that the giants in any industry will get into a new market for huge profits, Big tobacco already sees a fast developing billion dollar industry that they are already ramped up for in every aspect, from the farming fields all the way to production, packaging and marketing.
    EVERYTHING is already in place for them.

    One would need to be pretty naive not to see how easy it would be for “Big Tobacco” to become “Big Marijuana” in no time, and with little effort or expense on their part. Imagine a small weed farmer in CA, CO or WA even trying to grow, package and scale like Big Tobacco could do nationwide – and literally do it overnight.

    The nice part of this scheme if there is one (yes, once again the rich get richer…)is that because of how powerful Big Tobacco is as a lobbyist on Capitol Hill, this may be just the covert push needed to decriminalize or even legalize marijuana nationwide. After all, they already got the Food and Drug Administration to classify tobacco as a “food” instead of being classified as a carcinogenic poison, as it should be.

    Does it really matter if you buy your marijuana at a dispensary or at a convenient store, as long as you get the same quality at about the same price?

    Yes, it will hurt the small business owners, and that is a real and regrettable shame, but it just may open doors to get marijuana legalized sooner than we thought.

    Personally, I am glad to be alive to see our new industry develop. This just keeps getting more interesting each and every week!

    Steven
    Illinois Medical Marijuana Network

  3. Yeah this will eventually happen. The hand of capitalism just keeps it moving along. Independent growers will have to keep their quality high while maintaining a niche while the “big boys” use their established distribution channels for cannabis. I wouldn’t be surprised if I see a come back of the old cigarette machines, but with cannabis this time. Nostalgic and a good distribution model. They could put them in bars right next to the lotto machines.

  4. So what? Sure it will knock off small guys but I’ll just grow my own for free. Just like I do now ;)

  5. Duh

  6. The war has begun.

  7. Like with almost everything, there’s a dark and a bright side. Here, on the bright side, big tobacco getting involved could speed up the legalization process. On the dark side, it could put big competitive pressure on dispensaries, recreational shops, and small growers.

    Big business is almost always good at lowering prices and increasing distribution. It’s normally very poor though at anything creative and innovative. That’s where small business and entrepreneurs shine, and marijuana entrepreneurs much more than most.

  8. I fear for the small organic grower…The hand of big business will “Wal-Mart” the workers and screw the consumer…at the same time all the $$$$ goes into an off-shore bank account…Have we not seen this movie before?

  9. Just because you’re seven feet tall doesn’t mean you’re an automatic basketball star. Big tobacco companies might not have the right stuff. Corporate culture plays a big role in company success, and when I think of Big Tobacco corporations I think Deep South, USA. How many articles do you see about marijuana success in South Carolina? Georgia? Marijuana culture is not (yet) Southern culture. As we know American marijuana culture is rooted in 1920s New York jazz clubs, 1960s San Francisco acid tests, 1970s guerrilla homegrown, 1980s trips to Amsterdam, 1990s medical, etc. Cannabis is in a class of its own, but probably shares more in common culturally and business wise with beer and wine. Ever notice how there’s thousands of small craft beer brewers and wineries yet no equivalent numbers in the tobacco business? That seems like an important structural difference. No doubt Big Tobacco will muscle in with acquisitions of existing cannabis businesses with their boat loads of cash, but their dominant success is no slam dunk. How about an article detailing the cannabis plans of Miller-Coors, E&J Gallo or Starbuck’s?

  10. Smoking it isn’t that good for us health wise. I look to edibles as an attractive alternative and see the edible market exploding.

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