Big Tobacco Making a Play to Monopolize Marijuana?
There goes the neighborhood. That is the sentiment among many, if not most people who have fought for legalized cannabis in the United States. The movement to “free the weed” has been decades-long, and the relationship between the cannabis and tobacco industries has been contentious.
People who have fought, from grassroots patient advocates to activists, may feel apprehensive. Even bitter, to be honest. With all the resources available to the tobacco industry, it has sat back and failed to contribute to the fight to end prohibition. But did we really expect the tobacco industry to support the growth of a product that would be in direct competition to cigarettes? Probably not.
Why is the tobacco industry eyeing federal legalization? It’s common sense. Looking at the tremendous demand for recreational weed and medical marijuana, they want a piece of the pie. A very large piece. They probably want the whole fiscal pie. And when you compare the resources of national tobacco companies resources in terms of finances, distribution and supply chain, and retail?
Multi-state operators and independent dispensaries could be in big trouble if Big Tobacco aims to create a “Big Weed” monopoly.
Why The Time Seems Right For Tobacco to Make a Move to Marijuana
We can see that tobacco itself is in a crisis. The end or near end of the product life cycle, even if sales data doesn’t exactly show a stark bankrupting decline in sales. Consumers know the tragic health impact of tobacco. We have decades of clinical evidence that shows the link between tobacco use and life-threatening cancers.
Today, it is harder to smoke a cigarette in any public place than it has ever been. The tide of public opinion changed; smoking is bad for you, and tobacco use has a new stigma. Not cannabis use anymore.
Interesting how the tables have turned. But now that the federal legalization of cannabis seems imminent, it appears that the tobacco industry is ready to come out in a big way in support of it. After all, tobacco sales (according to the CDC) have decreased about 3% to 5% annually. However, other tobacco products like cigars and e-cigs have increased as much as 29% over the past five years.
It is not all ‘doom and gloom’ for the American tobacco industry. From 2018-2019, three companies accounted for almost 98% of all smokeless (vape, chew, etc.) tobacco product sales. Altria Group Inc., Swedish Match, and British American Tobacco had combined sales of more than $6 billion that year.
How Long Has Tobacco Been Waiting to Get Into the American Cannabis Market?
The first major media outlet to report on tobacco ‘stalking’ the fledgling legalized cannabis market was in Rolling Stone in 2018. In the article “Big Tobacco Is Already Eyeing Pot,” writer Thor Benson paints a picture of the decades-long playbook.
In 2014, some legal documents leaked to the media about a lawsuit by the most prominent players in the global tobacco industry. It outlined how Phillip Morris, British American Tobacco, and many other large global tobacco brands planned to enter the marijuana market. Cultivate, produce, process, and large-scale distribute marijuana products. They started talking about the strategy back in the early 1970s, according to the leaked documents.
The proof was found in a memo that was written in 1970. The President of Phillip Morris at that time, Was George Weissman, who wrote:
“Thus, with these great auspices, we should be in a position to examine: 1. A potential competition, 2. A possible product, 3. At this time, cooperate with the government.”
Some documents from tobacco companies have suggested that they may manufacture two different types of products. Smokable cannabis joints or pre-rolls are made packaged and available the same way cigarettes are at your local gas station. And smokable products that combine cannabis with tobacco and nicotine. At varying levels of psychoactive potency.
Proof That Tobacco Has Been Investing in Cannabis Aggressively in the Past Five Years
With federal legalization closer now than ever before in the United States, many industry analysts are observing some major moves being made by the tobacco industry. It is kind of like watching some important puzzle pieces come together as the picture takes shape.
Or, as they say, follow the flow of money to see a strategy being built by the tobacco industry. Some of the major moves have included:
1. January 2016: Philip Morris made an investment of $20 million in Syge Medical. The Israeli company innovated a quality medical cannabis inhaler.
2. Imperial Brands (UK) provided investment funds to Oxford Cannabinoid Technologies in June 2018.
3. Altria (owner of the Marlboro brand) invested $1.8 billion in Cronos. The company is a global cannabis company that is headquartered in Canada.
4. In July 2019, Imperial Brands took a 19.9% stake in Auxly Cannabis (Canada).
There was a recent transparent sign that tobacco companies have been preparing and are ready for the shift in product focus. The CEO of Philip Morris International (PMI), Jacek Olczak, made a big statement in an interview with The Mail (UK) about plans for the company.
The CEO said that Philip Morris will actually stop selling cigarettes in the United Kingdom within the next ten years. That would mean the end of Marlboro cigarettes in retail stores after more than 100 years. And Olczak commented that the company would lead with less harmful products to human health, calling them “modern alternatives.”
The Irony of Providing Smoking Cessation Products
After more than a hundred years of scrupulous, false advertising about the ‘safety’ of tobacco products, a big irony is brewing. The marketing machine is ready to introduce more ‘natural’ and ‘less harmful’ inhalable products to consumers worldwide. Specifically, people who want to segue away from tobacco products.
Think about that for a second. Tobacco fought to prevent health studies that linked smoking to cancer. It fought against advertising restrictions. It deployed tactics that were subversive to encourage addiction. In some cases, the tobacco industry has been accused of marketing products to children to solidify the next generation of addicts.
As far as reputations go, the tobacco industry has earned a nefarious and almost insidious one. And now, it seems they are ready to take a repentant approach. To develop products that can help people addicted for years or decades, in some cases, to their tobacco products. Then pitch their new ‘healthier’ smokables as a trusted path to smoking cessation?
It isn’t hard to understand why the grassroots cannabis industry, which has fought so hard for legalization, may have a bitter taste in its mouth. Watching the wellness and grassroots cannabis culture threatened to “go up in smoke” if the tobacco industry invades.