Cigarette wholesalers in Massachusetts are trying to cleverly persuade state officials to let them in on the business of marijuana when recreational pot sales launch in 2018.
According to a report from the Boston Globe, the companies responsible for handling every aspect of Bay State’s tobacco sales are hoping the state will help them establish a similar scam on the sale of marijuana. These businesses want secure a deal where every pot producer in the state is legally required to distribute cannabis products through their channels.
“My members are willing to collect all the taxes on behalf of the state and stamp any marijuana product being distributed for sale,” Paul Caron, executive director of tobacco trade group the Northeast Association of Wholesale Distributors, told the news source. “Rather than reinvent the wheel, let’s use the most successful, proven encrypted tax stamp program we have: the one assigned to cigarettes.”
But marijuana advocates are not at all interested in the idea of tobacco companies dipping into the cannabis trade. They believe this sector is simply trying to mimic the strong-arm tactics of the alcohol trade.
Jim Borghesani, a spokesman for the campaign that legalized recreational marijuana, said, “the last thing this state needs is another three-tiered commerce system that gouges consumers and enriches middlemen.”
In other legal states, the cannabis industry uses tracking software exclusively designed for their products, allowing retail pot shops to purchase marijuana directly from the producer. But if the tobacco companies take over, “dispensaries would have to sell the product they grew as a cultivator to these distributors, and then buy it back from them as a retailer on the other end,” said Will Luzier, the campaign manager for the initiative the legalized marijuana.
“I don’t see any sound public policy reason why it’s important to do that, other than to benefit the tobacco industry,” he added.
There is speculation that the tobacco wholesalers are simply looking to use legal marijuana as a way to generate profits lost by declining sales. In fact, cigarette sales across the state have almost been cut in half since 2000. Yet, Massachusetts is predicted to become one of the wealthiest legal marijuana states in the nation – reaching $1 billion in sales by 2020.
A similar situation is happening in Nevada, only with alcohol distributors being the culprits. The initiative the voters passed legalizing recreational marijuana gave the alcohol wholesalers the right to distribute pot products exclusively for the first 18 months. However, state officials have claimed that there was never enough interest from this sector to supply the market. But now the wholesalers’ group has secured a restraining order, potentially stopping the state’s early recreational marijuana sales program from being rolled out at the beginning of next month.
Interestingly, alcohol and tobacco companies have said for years that they have no plans to get into the business of marijuana. However, judging from what is happening now in some legal states, we believe it’s only a matter of time before the two industries start wedging themselves in.