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The Nation: Guess Who's Profiting From Pot Prohibition?‏

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Guess Who's Profiting From Pot Prohibition?

By Lee Fang


Patrick Kennedy, son of the late Senator Ted Kennedy, did several stints in rehab after crashing his car into a barricade on Capitol Hill in 2006, a headline-making event that revealed the then–US congressman for Rhode Island had been abusing prescription drugs, including the painkiller OxyContin. Kennedy went on to make mental health—including substance abuse—a cornerstone of his political agenda, and he is reportedly at work on a memoir about his struggles with addiction and mental illness. In 2013, he also helped found an advocacy group, Project SAM (Smart Approaches to Marijuana), which has barnstormed the country opposing the growing state and federal efforts to legalize pot.


Taking the stage to rousing applause last February, Kennedy joined more than 2,000 opponents of marijuana legalization a few miles south of Washington, DC, at the annual convention of the Community Anti-Drug Coalition of America (CADCA), one of the largest such organizations in the country.


“Let me tell you, there is nothing more inconsistent with trying to improve mental health and reduce substance-abuse disorders in this country than to legalize a third drug,” Kennedy boomed. The former congressman also praised his fellow speakers for standing up to the “extremist responses” from legalization advocates.


Given that CADCA is dedicated to protecting society from dangerous drugs, the event that day had a curious sponsor: Purdue Pharma, the manufacturer of Oxy-Contin, the highly addictive painkiller that nearly ruined Kennedy’s congressional career and has been linked to thousands of overdose deaths nationwide.


Prescription opioids, a line of pain-relieving medications derived from the opium poppy or produced synthetically, are the most dangerous drugs abused in America, with more than 16,000 deaths annually linked to opioid addiction and overdose. The Centers for Disease Control and Prevention report that more Americans now die from painkillers than from heroin and cocaine combined. The recent uptick in heroin use around the country has been closely linked to the availability of prescription opioids, which give their users a similar high and can trigger a heroin craving in recovering addicts. (Notably, there are no known deaths related to marijuana, although there have been instances of impaired driving.)


People in the United States, a country in which painkillers are routinely overprescribed, now consume more than 84 percent of the entire worldwide supply of oxycodone and almost 100 percent of hydrocodone opioids. In Kentucky, to take just one example, about one in fourteen people is misusing prescription painkillers, and nearly 1,000 Kentucky residents are dying every year.


So it’s more than a little odd that CADCA and the other groups leading the fight against relaxing marijuana laws, including the Partnership for Drug-Free Kids (formerly the Partnership for a Drug-Free America), derive a significant portion of their budget from opioid manufacturers and other pharmaceutical companies. According to critics, this funding has shaped the organization’s policy goals: CADCA takes a softer approach toward prescription-drug abuse, limiting its advocacy to a call for more educational programs, and has failed to join the efforts to change prescription guidelines in order to curb abuse. In contrast, CADCA and the Partnership for Drug-Free Kids have adopted a hard-line approach to marijuana, opposing even limited legalization and supporting increased police powers.


A close look at the broader political coalition lobbying against marijuana-law reform reveals many such conflicts of interest. In fact, the CADCA event was attended by representatives of a familiar confederation of anti-pot interests, many of whom have a financial stake in the status quo, including law enforcement agencies, pharmaceutical firms, and nonprofits funded by federal drug-prevention grants.


The anti-pot lobby’s efforts run counter to a nationwide tide of liberalization when it comes to marijuana law. In 2012, voters legalized pot in Colorado and Washington State; this year, voters in Alaska appear poised to do likewise. Since 1996, twenty-two states and the District of Columbia have legalized medical marijuana or effectively decriminalized it, and a contentious ballot initiative in Florida may result in the South’s first medical marijuana law. Meanwhile, legislatures across the country are debating a variety of bills that would continue to ease marijuana restrictions or penalties. On the federal level, a bipartisan coalition of lawmakers has challenged the Drug Enforcement Administration in testy hearings, and many have called for removing marijuana as a Schedule I drug under the Controlled Substances Act, which puts it in the same class as heroin and LSD.<----yummy


The opponents of marijuana-law reform argue that such measures pose significant dangers, from increased crime and juvenile delinquency to addiction and death. But legalization’s biggest threat is to the bottom line of these same special interests, which reap significant monetary advantages from pot prohibition that are rarely acknowledged in the public debate.

* * *

The CADCA convention featured a roster of federal officials and members of Congress as well as a guest appearance by R&B singer Mario. The speakers talked with energy about the coming showdown over marijuana-law reform.


“We need to apply what Hank Aaron said about baseball to our movement today,” asserted Sue Thau, a CADCA consultant. “We need to always keep swinging!”

Buses were scheduled to ferry the participants to Congress for meetings, and Thau coached the assembled activists to emphasize the potential risks for young people, something that “everybody on Capitol Hill can agree on.” In addition to lobbying against marijuana-law reform, she encouraged everyone to preserve key federal funding streams, to “make sure all the programs that fund our field, every one of them,” are protected in the appropriations process for the coming fiscal year.


Ironically, both CADCA and the Partnership for Drug-Free Kids are heavily reliant on a combination of federal drug-prevention education grants and funding from pharmaceutical companies. Founded in 1992, CADCA has lobbied aggressively for a range of federal grants for groups dedicated to the “war on drugs.” The Drug-Free Communities Act of 1997, a program directed by the White House Office of National Drug Control Policy, was created through CADCA’s advocacy. That law now allocates over $90 million a year to community organizations dedicated to reducing drug abuse. Records show that CADCA has received more than $2.5 million in annual federal funding in recent years. The former Partnership for a Drug-Free America, founded in 1985 and best known for its dramatic “This is your brain on drugs” public service announcements, has received similarly hefty taxpayer support while advocating for increased anti-drug grant programs.


The Nation obtained a confidential financial disclosure from the Partnership for Drug-Free Kids showing that the group’s largest donors include Purdue Pharma, the manufacturer of OxyContin, and Abbott Laboratories, maker of the opioid Vicodin. CADCA also counts Purdue Pharma as a major supporter, as well as Alkermes, the maker of a powerful and extremely controversial new painkiller called Zohydrol. The drug, which was released to the public in March, has sparked a nationwide protest, since Zohydrol is reportedly ten times stronger than OxyContin. Janssen Pharmaceutical, a Johnson & Johnson subsidiary that produces the painkiller Nucynta, and Pfizer, which manufactures several opioid products, are also CADCA sponsors. For corporate donors, CADCA offers a raft of partnership opportunities, including authorized use of the “CADCA logo for your company’s marketing, website, and advertising materials, etc.”


The groups’ approach to marijuana contrasts sharply with their attitude toward prescription-drug abuse. In March of this year, the heads of CADCA and the Partnership for Drug-Free Kids sent a letter to Attorney General Eric Holder and other government officials urging them to keep marijuana listed as Schedule I, a designation indicating that it has no recognized medical use and is among society’s most dangerous drugs. “We are aware of a small chorus in the United States Congress (copied on this letter) who are calling for the rescheduling of marijuana,” wrote Arthur Dean, a retired general and the president of CADCA, and Stephen Pasierb, head of the Partnership. “[O]ur groups agree with the most recent Health and Human Services (HHS) determination that marijuana should remain a Schedule I drug.”

* * *

CADCA’s website makes it clear that the organization—dedicated to a “world of safe, healthy and drug-free communities”—has adopted marijuana as its primary concern. The group’s stated policy priorities are to preserve and expand two federal drug-prevention grant programs and to oppose marijuana-law reform. CADCA has hosted training seminars to instruct community organizations in the best tactics for opposing efforts to legalize even medical marijuana. The group also offers template letters to the editor, sample opinion columns, talking points and other tips for pushing back against reform efforts.


Prescription drugs are another story. In this realm, both CADCA and the Partnership favor educational campaigns and limited pill-monitoring programs—measures that experts on painkiller addiction say are insufficient to deal with the burgeoning problem. CADCA’s site mentions prescription-drug abuse primarily in the context of expanding outreach programs funded through the Drug-Free Communities Act.


In February, the same month that CADCA held its convention, forty-two leading drug-prevention groups sent a letter to the Food and Drug Administration to protest the recent approval of Zohydro. Notably absent from the signatories: CADCA and the Partnership for Drug-Free Kids. A policy paper posted by CADCA regarding prescription drugs doesn’t call for a shift in how the FDA regulates painkillers, arguing instead that federal drug-prevention grant programs should be expanded.


Asked about CADCA’s efforts to combat prescription-drug abuse, Thau replied that the group supports educational programs and drug-monitoring efforts, and also recently signed on to a bill—sponsored by Senator Ed Markey—that offers a civil-liability exemption to those who provide preventative medications to individuals experiencing an overdose. CADCA has also promoted voluntary drug “take-back” events that encourage people to bring their unused pharmaceuticals to a central location for disposal.


It’s important to keep in mind, however, that industry groups haven’t opposed any of these measures. But they do oppose those restrictions that could eat into the industry’s profits. In 2012, for example, a group of doctors and drug-prevention advocates petitioned the Food and Drug Administration to change the prescription labeling of opioids so that they could be prescribed only for “severe pain,” rather than the “moderate to severe pain” stipulated under the current guidelines. Purdue Pharma opposed the plan, calling on the FDA to “maintain that the current indications for long-acting opioids are appropriate.” According to advocates who spoke to The Nation on condition of anonymity, the Partnership refused to join the push for new prescription guidelines. CADCA didn’t sign on either.


CADCA and the Partnership have also failed to call for action on current bills in Congress to crack down aggressively on painkillers, including the Stop Oxy Abuse Act, which would—in keeping with the suggestion of the doctors’ advocates who petitioned the FDA—allow OxyContin to be prescribed only for severe pain. The two anti-drug groups have not signed on to support the Safe Prescribing Act, which would move hydrocodone products like Vicodin and Lortab from Schedule III to Schedule II, making the product more difficult to prescribe. Nor, for that matter, have they endorsed any of the bills introduced by Representative Hal Rogers or Senator Joe Manchin to block the approval of new, stronger pain-killer drugs such as Zohydro.


“I think it’s hypocritical to remain silent with regard to the scheduling of hydrocodone products, while investing energy in maintaining marijuana as a Schedule I drug,” says Dr. Andrew Kolodny, a New York psychiatrist who heads Physicians for Responsible Opioid Prescribing. Kolodny notes that there are legitimate concerns regarding marijuana legalization, particularly how the drug may be marketed and its effect on adolescents, so “I don’t think it’s inappropriate for them to be advocating on marijuana.


“But,” he adds, “when we have a severe epidemic in America—one the CDC says is the worst drug epidemic in US history—it makes you wonder whether or not they’ve been influenced by their funding.”


In some cases, both CADCA and the Partnership have directly promoted certain opioids. In 2010, Marcia Lee Taylor, the Partnership’s chief lobbyist, signed on to a letter with Will Rowe of the American Pain Foundation asking the Office of National Drug Control Policy to continue Medicaid reimbursements for so-called “tamper-proof” opioids, which cannot be crushed or snorted but can still be abused to deadly effect. (The American Pain Foundation has since shut down, following an investigation by ProPublica showing that the group relied heavily on money from opioid manufacturers and played “down the risks associated with…painkillers while exaggerating the benefits.”) In 2012, CADCA joined with Purdue Pharma and other opioid makers in signing a similar letter to the Centers for Medicare and Medicaid Services.


Prescription-drug manufacturers like Purdue Pharma, which made more than $27 billion in revenues from OxyContin alone since 1996, have faced ethical problems in the past. In 2007, Purdue Pharma and its top executives paid $634.5 million in fines for deceptive marketing that played down the addictive properties of OxyContin. Also that same year, the company agreed to pay $19.5 million to twenty-six states and the District of Columbia to settle claims that it illegally encouraged doctors to overprescribe the drug. But the company’s influence over anti-drug advocacy is less known.


Erik Altieri, a spokesman for the National Organization for the Reform of Marijuana Laws, argues that marijuana can provide a “great alternative for treating chronic pain and other types of ailments.” Pharmaceutical companies “don’t want to see another vendor on the market.”

In a written response to queries, retired general Arthur Dean, CADCA’s chair and CEO, said: “The funding CADCA receives in no way impacts CADCA’s policy efforts or strategic direction. Prescription drugs are legal medicines that serve a legitimate and often life-saving purpose in our society. CADCA has utilized some discretionary grants from industry sources, such as Purdue Pharma and several other companies, to develop programs and tools to help community coalitions prevent and reduce youth prescription drug abuse and the abuse of over-the-counter cough medicine.” Asked about current proposals in Congress to rein in the way painkillers are prescribed, Dean replied: “CADCA has not taken a position on the proposed legislations.”

The Partnership for Drug-Free Kids did not respond to a request for comment. Neither did Purdue Pharma and other opioid makers, including Abbott Laboratories, Pfizer and Alkermes. A spokesperson with Janssen told The Nation that the company funds CADCA to support “educational programs about the safe and responsible use of pain medicines.”


In May, CADCA sent out an action alert to its members, asking them to contact Congress and oppose an amendment in the House of Representatives that would block the DEA from targeting medical marijuana operations that are legal under state law. The measure passed later that month with bipartisan support.

* * *

Patrick Kennedy’s Project Sam is arguably the most visible group opposing marijuana-law reform, with the former congressman making the rounds on HBO’s Real Time With Bill Maherand Comedy Central’s The Colbert Report, among other cable and news programs. And yet this group, too, is rife with potential conflicts of interest.


Some legalization advocates have criticized Kennedy’s crusade against pot. Though the former congressman received many second chances in his struggle with alcohol and prescription drugs, he has opposed any move toward marijuana decriminalization that would afford similar leniency to others. After Project SAM began organizing opposition to Alaska’s legalization initiative this year, demonstrators in Anchorage paraded a giant check with the figure $9,015—the amount in campaign money that Kennedy received from the liquor and beer lobby while in office. Critics have also pointed out that Project SAM’s board and partners represent many of the interest groups that stand to profit from marijuana’s continued prohibition.


“Some of the folks active with Project SAM appear to have a financial interest in keeping marijuana illegal and promoting mandatory treatment for adult consumers,” says Mason Tvert, spokesman for the Marijuana Policy Project in Colorado. For example, Ben Cort, Project SAM’s spokesman, leads a drug-treatment program in Aurora, Colorado.


Tvert points out that marijuana convictions often result in court-ordered rehab, which can provide an obvious incentive for treatment centers to oppose reform. In filings with the Securities and Exchange Commission, the Geo Group—a company that manages several for-profit treatment and detention centers—states that “any changes with respect to the decriminalization of drugs and controlled substances could affect the number of persons arrested, convicted, sentenced and incarcerated, thereby potentially reducing demand for correctional facilities to house them.” In short, marijuana-law reform can cut into revenues.


Dr. Stuart Gitlow, president of the American Society of Addiction Medicine, sits on Project SAM’s board of directors and frequently speaks out against medical marijuana. In comments to USA Today in January, Gitlow disputed President Obama’s comment that marijuana is no more dangerous than alcohol. “There’s no benefit to marijuana,” he said. “It’s simply that people want the freedom to be stoned. That’s all it is. And there’s a great deal of risk.”


What the USA Today piece didn’t mention—and what Gitlow hasn’t disclosed during his appearances on HLN TV, Southern California Public Radio and other local media—is that he serves as the medical director for Orexo, a pharmaceutical company that recently produced a new drug called Zubsolv. The product is an opioid substitute along the lines of Suboxone that, while designed to treat opioid addiction, is often abused for recreational purposes. AsThe New York Times reported, Suboxone has been linked to more than 400 deaths in the United States since 2003.


Last December, Dr. Mark Willenbring, former director of treatment and recovery research at the National Institute on Alcohol Abuse and Alcoholism, raised concerns about Gitlow’s leadership of the American Society of Addiction Medicine, given his relationship with Orexo. “My concern is with the increasing public perception, especially in psychiatry and addiction treatment, that financial interests taint and discredit professional opinions,” Willenbring told the Alcoholism & Drug Abuse Weekly.


Peter Bensinger, a former DEA administrator, and Robert DuPont, a former White House drug czar, now manage a consulting firm that specializes in workplace drug testing. The two work closely with Project SAM and have spoken at events with its leaders. Last year, for example, Bensinger and DuPont signed on to a Project SAM letter pressing the Justice Department to reconsider its decision to defer the enforcement of federal drug laws in states that have legalized marijuana. For that stance, they’ve come under fire from marijuana-law reformers like Howard Wooldridge of Citizens Opposing Prohibition for promoting “policies that line their pocketbook.”

* * *

Marijuana-law reform has created deep divisions within police agencies. A recent poll of officers found that nearly two-thirds believed marijuana laws should be reformed—with 36 percent agreeing that marijuana should be legalized, regulated and taxed; 14 percent supporting relaxed penalties; 11 percent supporting legalized medical marijuana; and 4 percent supporting decriminalization.


Yet strong institutional forces have kept nearly every law enforcement professional association opposed to reform. Starting with the Reagan administration, police departments were encouraged to seize and sell property associated with drug busts, which significantly augmented their revenue. Between 2002 and 2012, law enforcement agencies collected about $1 billion from marijuana arrests, according to Justice Department data.


It was also during the 1980s that federal grant programs requiring police to engage in drug enforcement were expanded, including the Edward Byrne Memorial Justice Assistance Program, which funds multijurisdictional drug task forces. The Byrne grants, which cover a range of drug enforcement actions including marijuana, provided over $2.4 billion for law enforcement agencies this fiscal year.


“It’s money,” says retired Los Angeles Police Department Deputy Chief Stephen Downing, when asked why so many police organizations are lobbying against marijuana-law reform. “In many states, the city government expects police to make seizures, and they expect these seizures to supplement their budgets.” According to The Wall Street Journal, drug task forces in Washington State have predicted that asset-forfeiture revenues will decrease as a result of marijuana legalization.


Others dispute the notion. Bob Cooke, a former president of the California Narcotic Officers’ Association, asserts that “losing money from asset forfeiture is not why we believe [pot] should be regulated.” Instead, he argues, law enforcement agencies oppose legalizing marijuana because its use is inherently dangerous: “One try and it can ruin your life.”


But the fiscal impact on law enforcement has become part of the debate. Earlier this year, when Minnesota State Representative Carly Melin proposed a medical marijuana bill, she faced a backlash from police lobbyists. “There was a concern about losing federal grants tied to drug enforcement laws,” Melin says. “Asset forfeiture was briefly discussed as well.” She adds that law enforcement agencies approached her bill with “absolute opposition” but changed their position after widespread public pressure. Melin’s bill passed in May once patients and the parents of sick children began contacting lawmakers.


“It’s not hard to figure out that there’s a lot of money attached to enforcing marijuana laws,” Melin says. “Marijuana arrests still account for over 60 percent of drug arrests in Minnesota, so it’s still big business for law enforcement.” Minnesota’s numbers reflect the data compiled by the American Civil Liberties Union, which show that marijuana arrests account for more than half of all drug arrests nationwide.


Similar dynamics have played out elsewhere. When Californians debated a legalization initiative in 2010—which was ultimately unsuccessful—the lead organizer of the opposition was John Lovell, a longtime police lobbyist in Sacramento. Lovell has made a career of channeling federal “drug war” grants to law enforcement agencies in the state—including millions of dollars for the California Marijuana Suppression Program, grants for overtime pay for police, and money for additional officers dedicated to marijuana eradication.


In Florida, the state sheriffs’ association, led by Polk County Sheriff Grady Judd, has become the public face of opposition to a medical marijuana referendum on the ballot this fall. Judd has deployed a number of arguments against the referendum, from the dangers of driving while high to increased workers’ compensation claims, to teenage addiction and increased respiratory illnesses.


But the annual strategic plan submitted to the Polk County Board of Commissioners by Judd’s office suggests another major concern. In it, Judd says that his force is “doing more with fewer resources” and that he’s had to cut seventeen deputy sheriff positions due to a lack of funds. Judd describes seizures from marijuana grow houses as a key revenue source for his department: seizing such property helps to “meet eligible equipment or other non-recurring needs that could not be met by local funding, thereby putting forfeited and unclaimed funds to work in crime prevention, for the taxpayer,” according to the document. Plus a Florida law enforcement newsletter describes the state’s marijuana eradication program—which brought in nearly $900,000 last year in forfeitures, and more than $1 million in previous years—as “an excellent return on investment.”


Downing, the retired LAPD deputy chief, notes: “The only difference now compared to the times of alcohol prohibition is that, in the times of alcohol prohibition, law enforcement—the police and judges—got their money in brown paper bags. Today, they get their money through legitimate, systematic programs run by the federal government. That’s why they’re using their lobbying organizations to fight every reform.”


Indeed, alcohol prohibition was ended partly through ethics reform. During Prohibition, the Eighteenth Amendment was enforced through a law called the Volstead Act, which exempted federal liquor enforcement agents from Progressive-era civil service exams. Without these exams, the Prohibition Unit became a vehicle for awarding patronage jobs to political allies.


Almost immediately, these 18,000 federal jobs were marked by scandal and corruption. According to one Treasury agent, the “most extraordinary collection of political hacks, hangers-on, and passing highwaymen got appointed as prohibition agents.” They set up illegal roadblocks, killed innocent civilians, and extorted money from bootleggers rather than arresting them. The wet lobby successfully pushed to re-establish civil service exams for the Prohibition Unit in the late 1920s—a shift that embarrassed dry-lobby supporters, because nearly two-thirds of all agents couldn’t pass the entrance exam. Further weakening support for Prohibition, the Supreme Court declared it illegal in 1927 for local judges to pay themselves with a share of the fines collected from Volstead Act cases.


While not a perfect analogy, some marijuana advocates see the fight against Prohibition as a guide, since so many interest groups working to maintain the status quo today are tied to cash flows—whether federal grants or forfeiture revenues—that depend on keeping the drug illegal.

Prohibition provides “an incentive for these interest groups to keep seeking federal money to continue the ‘war on drugs’ [and] their own salaries,” says Representative Steve Cohen, one of the most outspoken proponents of legalization in Congress. Cohen adds that some of the most vociferous opponents of reform appear to be influenced by the money flowing from pot prohibition. “It’s a vicious cycle.

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op:   who's profiting?  in mi?  disps.... pot prohibition enables the avg disp in mich in its 13th month operating in the same location to clear $11, 300; which would be taxable if generally accepted Financial Accounting Standard Board rules were applied, and they are, but not so much in a cash biz like disps.  $11,300 is not BIG $, but it's enuf to appeal to 100's of Michiganders who put $ before trepidation.  

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Heres the rest of the story------



Warnings big business plans to take over legal marijuana industry

Updated Tue 17 Jun 2014, 7:59am AEST


There's a new gold rush in America's west, where marijuana prohibition is coming to an end. Next month, Washington State will be the second jurisdiction to fully legalise cannabis. New brands and products are flooding the market as anyone over the age of 21 will be legally able to smoke and buy marijuana. But some, including JFK's nephew Patrick Kennedy, are warning that big business is moving to take over the marijuana industry to make it an industry to rival beer.


Ben Knight

Source: AM | Duration: 4min 3sec


Topics: cannabis, industry, drug-use, international-law, laws, united-states




CHRIS UHLMANN: There's a new gold rush in America's west, where marijuana prohibition is coming to an end.


Next month, Washington State will be the second jurisdiction to fully legalise cannabis.


There's broad public support for it but a few voices are claiming that big business is moving to take over the marijuana trade, aiming to make it an industry to rival beer.


One of them is Patrick Kenned, nephew of JFK, and son of Ted - and a man who's had his own long battle with drugs and addiction.


He allowed the ABC's Foreign Correspondent exclusive access on his travelling campaign against Big Marijuana.


This report from Ben Knight.


BEN KNIGHT: The low point for Patrick Kennedy came in 2006.


PATRICK KENNEDY: What I really remember is waking up the next day and not knowing where my car was.


BEN KNIGHT: The night he crashed his car into a barricade outside the Capitol building, Patrick Kennedy was out of it on prescription drugs and alcohol, as he had been for much of the 16 years he spent in Congress.


PATRICK KENNEDY: I kind of was waiting on the edge of my seat all day for the phone call to come to say that I had run someone over.


BEN KNIGHT: He hadn't, but he still was publically disgraced. The shame only made greater by his famous name.


PATRICK KENNEDY: I mean, I have lost count of the amount of times that I said, 'Oh my God. Look at what I've done to my family.'


BEN KNIGHT: Patrick Kennedy quit Congress in 2010 to get himself sober and four years on, his life has completely changed.


CHILD: Higher?


BEN KNIGHT: At 47, he's now married with kids.


PATRICK KENNEDY: Yeah how about the red car?


BEN KNIGHT: And is out campaigning again.


But this time, it's not for Congress; it's to stop the incredible momentum in the US towards the full legalisation of marijuana.


PATRICK KENNEDY: It's big money. Of course it's big money. There are a lot of them. Alcohol, tobacco, gambling - and you're just going to add to this? You capture an addiction, you've got a customer.


BEN KNIGHT: And while some of those behind the counter are old hippies living out a decades old dream, the serious players in this industry have a background in Yale Business School, and Silicon Valley banks.


MICHAEL BLUE: It's a $150 billion industry.


BEN KNIGHT: Michael Blue is one of the three founders of Privateer Holdings, the first private equity firm dedicated to the marijuana business.


BRENDAN KENNEDY: I'm not sure I could work in the tobacco industry. I'm not sure I could work in the alcohol industry.


BEN KNIGHT: Brendan Kennedy, from Privateer.


BRENDAN KENNEDY: But we eventually got comfortable with that moral question and in fact, you know, today, having talked to so many patients and physicians and talked to so many activists, we feel this moral imperative to succeed.


BEN KNIGHT: Patrick Kennedy's message is simple - this is not what people voted for.


PATRICK KENNEDY: It's not about your civil liberty and your ability to smoke a joint now and again. This is about a commercial for-profit behemoth coming in to prey on your kids, addict them and make money off of them and at your expense.


BEN KNIGHT: The battle for hearts and minds is still very much alive, but the real fight is now in the corridors of power in Washington DC, where the cannabis industry is lobbying hard for more laws to be relaxed.


Big business wants federal law changed so they can access to banks and tax concessions, just like the alcohol industry.


Patrick Kennedy has a big battle ahead to stop it.


So he's recruited president Obama's former drug policy adviser Kevin Sabet to the campaign.


KEVIN SABET: Little by little, this is about legitimising an industry.


BEN KNIGHT: Kevin Sabet told Foreign Correspondent big business is downplaying the bad side of the drug, which is far stronger than it was even 20 years ago.


KEVIN SABET: I think when people voted for this they weren't thinking, about 'Well, will our banking industry now finance these cookies that are sending people to the hospitals. Is that what we want?'


BEN KNIGHT: It's an intriguing battle to watch, as one of the most famous names in American politics goes up against a new, and powerful lobby group with big money behind it, and the promise of much, much more to come if they win.


This is Ben Knight reporting for AM.



I will add my friends dad who is the retired ceo of RJR tobbacco told us in the 80s that if marijuana were ever legalizd they have a plan all ready to impliment........since back then


And you guys think the lawyers leading this dog and pony show are working for 'our' benefit.......hahahahahaha!








Cannabis goes corporate: Dot-bong boom explodes as Big Marijuana flexes its muscles




June 17, 2014, 7:00 am







There is a new gold rush in America's west.


Decades of marijuana prohibition are coming to an end, on the back of a sea change in public opinion. Twenty states have now voted to make the drug legal in one form or another.


Next month, Washington State will be the second state to fully legalise cannabis. New brands and products are flooding the market, for anyone over the age of 21 to buy and consume.


Legal cannabis markets are expected to grow by 64 per cent across the United States in the next year.


Now, Wall Street is moving in. The $40 billion black market in cannabis is going mainstream.


Hundreds of new marijuana businesses - and 2,000 existing medical marijuana sellers - are gearing up for the recreational market to take off. The big players aim to make this an industry to rival beer.


But while there is broad public support for marijuana legalisation, opponents are ramping up the campaign to swing the pendulum back, arguing that America is creating a new Big Tobacco.


And one of that argument's chief proponents is former congressman Patrick Kennedy, the nephew of John F Kennedy and the son of senator Ted Kennedy.


Mr Kennedy has had his own battle with drugs and addiction.


Now he has formed a new organisation called SAM - Smart Approaches to Marijuana - and he is taking on big business.


"It's not about your civil liberty and your ability to smoke a joint now and again," he said.


"This is about a commercial, for-profit behemoth coming in to prey on your kids, addict them [sic] and make money off them ... and at your expense."


'Dot-bong' era begins as Big Marijuana moves into Seattle


Seattle is Washington State's biggest city and a big business town, home to corporate giants like Boeing, Starbucks, and amazon.com.


It is also becoming the headquarters for "Big Marijuana".


Already, the state has received 7,000 applications from businesses wanting to sell recreational cannabis, and the market is being flooded with new products.


Marijuana has been fully legal in Colorado since January this year, but Seattle is where cannabis is going corporate.


The big money is rushing in. The dot-bong era has begun.


"Interestingly, I have never used cannabis," says Michael Blue, a Yale MBA graduate and entrepreneur.


The son of a surgeon, from a conservative home in Arkansas, he is probably the last person you would expect to see going into this business.


The same goes for his two partners - Christian Groh and Brendan Kennedy, another Yale MBA graduate.


Four years ago they created Privateer Holdings, the first equity company dedicated to the marijuana industry.


Brendan Kennedy was working at a Silicon Valley bank when he came up with the idea.


"We were looking for holes in the marketplace," he said.


What he saw back then were opinion polls showing that for the first time, a majority of Americans were in favour of ending the prohibition of cannabis. Support for medical marijuana was even higher. Eight out of 10 Americans supported marijuana for medical use.


"When we first started going into this industry we asked ourselves, morally, 'Would we feel comfortable being in the cannabis industry?'" he said.


"I'm not sure I could work in the tobacco industry. I'm not sure I could work in the alcohol industry.


"But having talked to so many patients and physicians, and talked to so many activists who are interested in individual civil liberties, or patient rights - you know, we feel there's some moral imperative to succeed."


As the failures of America's war on drugs became clearer, and stories spread of cancer and epilepsy patients being helped by cannabis, state after state began putting cannabis on the ballot and voters began passing it.


But it is still a risky business. Marijuana might be legal in 20 states, but it is still illegal under federal law. The Obama administration has essentially told federal drug authorities to look the other way.


And business is thriving. Selling marijuana has gone way beyond simply packing ziplock plastic bags with a gram or two of dried buds.


Marijuana product range expands with hi-tech options


The marijuana industry is now hi-tech and brand-aware with electronic joints, similar to e-cigarettes, coming pre-loaded with cannabis oil promising "150 puffs guaranteed!" Marijuana-infused food products range from lollipops to nut bars to carbonated drinks.


Then there are electronic marijuana pens you connect via a USB port. The waxy substance inside is 90 per cent THC - the chemical that gets you high in cannabis - one puff on this is the equivalent of a whole joint.


Patrick Kennedy has enlisted president Barack Obama's former drugs adviser Kevin Sabet to his cause.


Dr Sabet is concerned about the health risks of these new products.


"They don't understand that today's marijuana can often be upwards of 90 per cent THC ... extracted in a wax that is combusted and inhaled," he said.


"And that can often lead to emergency room admissions. I mean for the baby boomers, [the fact] people are going to the hospital for ingesting a marijuana cookie, or one of these wax things, is totally foreign. And yet it is the reality for a lot of kids."


Privateer stays on the right side of federal law by not buying companies that directly deal with cannabis in the US. Its flagship buy was a website which is now the go-to domain to search and review strains of marijuana.


It took them a year to raise their first $7.4 million from wary investors. Now, they are about to close a fundraising round of $106 million. They will not even talk to investors who do not have a least $1 million to invest.


"If you look globally, it's a $US150 billion industry," said Mr Blue.


"It will only grow as further legalisation takes place."


Fears cannabis industry will target those who can't stop


The momentum for more states to legalise seems unstoppable. Public support is trending up but most importantly, Wall Street is moving in.


And that is what worries former US congressman Patrick Kennedy.


"What's really behind this legalisation is money, plain and simple," he said.


Patrick Kennedy is no longer in Congress. He pulled the pin on his career in 2010 to deal with a raging addiction to alcohol and prescription drugs that at one point, saw him crash his car into a barricade outside the Capitol Building.


"It's enormously humiliating," he said. "I would never have willingly chosen to humiliate myself and bring shame on my family, not just once, twice, three, four, five times.


"I mean, I have lost count of the amount of times that I said, 'Oh my God, look at what I've done to my family'."


Now married and the father of two children, he has been in recovery for four years.


"Just like the liquor industry. They don't make money off average drinkers. They make money off people like me, because I couldn't stop," he said.


"The mentally ill, or those who have predisposition for addiction and alcoholism ... they are really the candidates that the Big Marijuana industry is targeting.


"You capture an addiction, you've got a customer."


He is out to spread the message that cannabis is more addictive than people realise, far more potent than it used to be, and a danger to people at risk of mental illness.


But he has a hell of a task in front of him.


The fact is, plenty of Americans enjoy using cannabis and while a certain proportion become addicted, many find it does not ruin their lives.


And they have years of their own experience of doing it illegally to draw on.


Cannabis retailer campaigns for end to prohibition


John Davis, who put the money he earned from his career in construction into shops selling cannabis to the public, says the drug is not harmful.


"This is not dangerous. I have smoked this marijuana," he told the ABC at his dispensary in West Seattle.


"It didn't give me homicidal urges. Right? It made me enjoy a movie."


Unlike the Ivy League crew at Privateer, Mr Davis deals directly in cannabis.


And under federal law, that means he is risking serious prison time, but he says somebody has to do it in order to end marijuana prohibition for good.


"Look, Patrick Kennedy had a severe drug problem. That doesn't make him a policy expert," Mr Davis said.


"We have the highest prison population of any other civilisation in the history of civilisation.


"We jail people at an astonishing rate. For what? For drugs. Does that help the drug problem? Because it doesn't make the drugs go away."


Lobbyist hired to push pot's cause on Capitol Hill


But the battle is not being played out in Mr Davis' marijuana dispensary in Seattle. It is in Washington DC.


Because cannabis is still illegal under federal law, the cannabis industry is locked out of the banking system. The entire multi-million-dollar business operates in cash.


So the industry has hired a lobbyist to try to convince federal lawmakers to change the regulations.


Patrick Kennedy says if that happens, the money spigot will be opened up, and it will be all but impossible to turn off again.


"When you have those kinds of profits, you can saturate the political system. And most importantly, you can saturate the airwaves with your message," he said.


"It basically took 50 years before you got the political will to change our policy around allowing tobacco companies to market their product with impunity. So let's use that as a case study."


The US Congress - and the rest of the country – will be watching the Denver and Seattle experiments closely, but Mr Davis says there is no going back.


"The wall is falling, and everyone sees it," he said. "And everyone's astonished. But it doesn't stop."


"The end of prohibition is now, because prohibition is a bankrupt policy that doesn't work."


Patrick Kennedy says those who currently say they support legalisation have not been told what it means in practice.


"I think what's going to turn the American people off is less the notion of marijuana - although that's going to be a big factor - than the notion that you're going to have this big commercial, big money, corporation."


"There are definitely going to be consumers, and a good percentage of them are never going to leave you.


"Well, if you're an industry ... I mean that's just like you've hit the jackpot."


Watch Foreign Correspondent's report Cannabis Inc on ABC 1 at 8:00pm.*








Edited by purple pimpernel
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If Patrick Kennedy had been simply smoking cannabis and not doing those crazy narcotics, he would probably still have a job as a congressman and not saying he practically destroyed his family " one, two,.. three, four... Five" times.

Exactly. Kennedy is talking about Rx drugs and alcohol. Marijuana is a totally different animal. He should confine his criticism to the things he knows about and has personal experience with - Rx drugs and alcohol.

Edited by amish4ganja
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Cross addiction, that's a killer. To bad with all their money, why they keep playin in the gutters.


Course they gonna use their tool, got him lookin crooked, an you know they got him hooked  on something, besides the easy money...


Wise up chump!


Thanks to the OP, nice article.

Edited by solabeirtan
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I mean, I think all drugs should be legal in some format or manner,..... prison for drugs is ridiculous.  If Mr Kennedy wants to do ambien,... go for it,... like I care. :-)  The crime was driving his car on ambien.  I feel I have a right to say "Dude,... ambien aint no good for ya"..., but that's about it.

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What about the booze, but it's the double whammy effect, when you come up cross addicted. Makes it much more sinister, then you can probably add in tobacco to really put yourself in a terrible way.


I'm stilll living in the days before ACA when the only way to deal with Alcoholism or Drug Addiction was usually by incarceration. Fortunatley for me help was available and pretty much on a lark I thought I'd give it a look see! One off best ideas I ever had!


Victimization of the Victim Nation...

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face it , as long as there is a market someone is going to take it to the limit. Money is a powerful reward to turn down, especially if you are so poor you need to feed your family with a small profit... believe me there are a lot of very poor patients trying to get buy, and are praying a small crop with help lift there burden... its the ones that want to get rich off it.. thats where the greed comes in..

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Pat Kennedy is non-believable and un-credible when it comes to talking about drug policy.

"I did everything and it was bad, but it didn't affect me enough to not have bad judgement about drugs."


In fact, I think he is taking this anti-pot stance to use his semi-celebrity status to shine daylight on the hypocrisy and profiteering of pharma. Even if that's not what he intends, that's what he is accomplishing.


Or he may be counting on the reactionary hatred of the Kennedy name to coopt and thereby undermine the typically reactionary opposition to liberalization.


And I just figured out that the "third" drug Kennedy refers to MUST come after alcohol and tobacco, not opiates or benzos.


Kennedy's are nothing if not clever.

Edited by mettleurge
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I would hate to be the son of an arse hole who killed his girly by drunk driving over a bridge,,,,,,,every man for himself teddy,,,the kennedys suck they are all a bunch of crooks and thieves, probably gypsies too lol! 


all of you dems should realy be pissed at this idiot after all his family is the golden family of democrats, I bet teddy is smiling from the grave knowing his children grew up like him and his wife!



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And of course Kennedy is a Republican so that is why everyone should vote Democratic.


Nah, that's a joke. It's hard to resist sometimes.


I'm sticking with the Libertarians personally for drug policy as I'm a proponent for medical everything.


Want to do meth? See a doctor (or your local county health department) and get a card.


How about beer? Get a card.


Heck, even guns. Simply make gun ownership. Want an assault rifle. Get a card.


In an enlightened society substance abuse would be treated as a medical condition and not a reason to create an arrest and punishment industry.

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I would hate to be the son of an arse hole who killed his girly by drunk driving over a bridge,,,,,,,every man for himself teddy,,,the kennedys suck they are all a bunch of crooks and thieves, probably gypsies too lol! 


all of you dems should realy be pissed at this idiot after all his family is the golden family of democrats, I bet teddy is smiling from the grave knowing his children grew up like him and his wife!



Ted and the woman he was driving home that fatefull night, one of his brother  Johns secretaries, after a party they had to throw for them as a symbol of the gratitude for the loss of their Boss and their jobs etc.  Mary Jo came in and grabbed Teddy insisting he go with her. Come on Phaq, what you gonna do, esp when your drunk and cant get it up anyway. It was an unfortunate  tradgedy for sure. I don't think he was even driving. Hey they were f humans, wtf


They're all at peace now.  Obviously Pat has some issues too, who wouldn't ?


maybe you can try to let it go? Forgiveness brother it might help to cure you.

Wow you dont even like Gypsies either? Because they're Democrats  ?


Edited by solabeirtan
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Or he may be counting on the reactionary hatred of the Kennedy name to coopt and thereby undermine the typically reactionary opposition to liberalization.



I would hate to be the son of an arse hole who killed his girly by drunk driving over a bridge,,,,,,,every man for himself teddy,,,the kennedys suck they are all a bunch of crooks and thieves, probably gypsies too lol! 


all of you dems should realy be pissed at this idiot after all his family is the golden family of democrats, I bet teddy is smiling from the grave knowing his children grew up like him and his wife!




You stepped right into his noose there, dintchya?


Seriously, you think Teddy didn't do as much or more to legalize mmj than anyone?



Edited by Bush_killed_your_future
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