The products we design and sell have one thing in common––they help people express themselves by gardening and growing plants. We understand that expression is deeply personal. Indeed, we know that some of our consumers use our products to grow cannabis for their personal enjoyment or for the plant’s medical benefits.
As the leading provider of nutrients, plant supplements, growing media, air filtration and lighting used for hydroponic and indoor growing, our company is unique in its ability to help people who choose to produce cannabis authorized under state-law.
Forty-six states have now elected to end prohibition of cannabis and adopt alternative means of regulating its production and distribution within their jurisdiction. Their ultimate objective is responsible production, distribution and consumption of cannabis and combating illegal drug abuse. There are now roughly 15,000 licensed cannabis businesses in the United States, 200,000 people employed in the industry, and more than 2 million medical cannabis patients served by the industry.
Assuming the cannabis industry continues along its current growth trajectory, the total number of people employed in the field will reach 300,000 by 2021, which matches the number of people employed by data processing and hosting companies, medical and diagnostic laboratories and ambulatory health care services.
Cannabis is creating a legitimate income stream for state and local governments. According to New Frontier Data, medical and adult-use cannabis sales generated $745 million in tax revenue in 2017. By 2020, tax revenues from cannabis will grow to $2.3 billion in legalized states.
We believe the time has come for the United States to create a legal marketplace as other countries have already done. Given the current political backdrop, however, we recognize this is unlikely in the near-term. That is why we believe—at a minimum—Congress should honor the principles of federalism and states’ rights by passing legislation that respects the will of voters and state legislatures that have elected to adopt their own approach to authorizing the use of cannabis within their boundaries.
We also believe the federal government should allow this industry to function like any other business. This means state-licensed cannabis businesses should have access to banking and other financial services, operate with the same tax structure as other businesses and not be threatened by federal prosecution if they comply with state laws.
At the state level we have an opportunity to learn from the successes and failures of the states that have implemented adult use and medical cannabis programs. In states that allow for cannabis production, we support thoughtful regulatory programs that enhance the availability of cannabis, create stable economies and work to eradicate the illegal market for the product. This means setting up markets with fair licensing systems that are demand based and provide opportunities for large and small businesses alike, honoring the ability of consumers to participate in the industry by growing a limited number of plants annually for their own personal use and employing a sensible approach to taxation and regulation.
Indeed, evidence suggests that arbitrary limits on the number of cultivation licenses issued in legalized states increase the demand for cannabis grown illegally by limiting the availability of legal cannabis. This results in inflated prices, less competition and diminished consumer protections.
Several states allow for personal cultivation of cannabis or cultivation in cooperative groups called “collectives” to produce the cannabis they desire for medicinal or personal consumption. This approach has proven successful in providing an affordable mechanism to obtain cannabis, allowing patients to grow the cannabis that best treats their conditions. It also facilitates safe production of plants containing only those inputs the grower desires.
Overly-restrictive local bans and zoning rules have been used to limit market access and inflate costs, which drives consumers to the illegal market and undermines the state-regulated system. This is why we believe states should ensure local governments allow state-licensed cannabis businesses to operate in their jurisdictions. States should adopt measures that allow local governments to address legitimate public health and public safety issues while ensuring the illegal sales are not perpetuated in place of state authorized sales through overly-restrictive zoning requirements.
We believe these positions improve access to cannabis, which is especially important for those seeking the plants’ medical benefits. However, these positions also relate to the creation of a structured adult-use market and are a key to broader societal and economic benefit as outlined below.
Medical benefits
Research demonstrates numerous medical uses from cannabis. State data shows that there are now more than 2 million patients nationwide benefiting from access to cannabis.
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- There is evidence that cannabis is an effective treatment for chronic pain, helps treat seizure disorders and helps treat nausea associated with chemotherapy.
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- Cannabis has also become a common treatment for military veterans suffering from post-traumatic stress disorder (PTSD). Research published in Science Daily reported that as a result of cannabis use, subjects reported “decreases in re-experiencing trauma, less avoidance of situations that reminded them of the trauma, and a decline in hyper-arousal.” Veterans organizations like The American Legion fully support advancing search to determine the therapeutic impact of cannabis in treating PTSD and chronic pain.
- Mounting evidence suggests that the availability of medical cannabis is associated with reductions in some of the most substantial harms associated with opioids.
Consumer protections
Illegal purchases that have existed for decades are not subject to any consumer protections, health or safety requirements. Today, state-licensed businesses are subject to rigorous employees criminal background checks as well as product testing; standard health and sanitation procedures; and packaging and labeling requirements. They also must carry our one of their intended purposes, to prohibit people under 21 from purchasing cannabis, and they cannot sell other drugs.
Criminal justice
Further, in markets where cannabis is legal, it allows law enforcement resources to focus on more serious crime. The alarming truth is that between 2001 and 2010, there were more than 8 million cannabis-related arrests in the United States. Approximately 88 percent of those arrests were for possession crimes, which generally involve only small amounts of cannabis. Prior to any state legalizing adult-use cannabis, states spent a combined $3.6 billion per year enforcing cannabis possession laws.
Outdated drug laws continue to impact the lives of millions of Americans arrested for minor drug possession crimes, which result in lifelong harm. Convictions for cannabis possession can prevent otherwise law-abiding citizens from obtaining employment, housing, student financial aid or even a driver’s license. Past enforcement has also disproportionately impacted minority communities and young people within these communities. The Drug Policy Alliance reports that “in several states, marijuana legalization for adult use has had the unintended consequence of reducing historically high numbers of youth (under 18 years of age) and young adults (between 18 and 20 years old) stopped and arrested for marijuana offenses”. In these cases, states should examine alternative penalties and drug awareness education programs instead of incarceration or other severe penalties.
An economic boost
Cannabis legalization creates new economic activity, new jobs and tax revenue in legalized states. According to Leafly and Whitney Economics, in 2018, the cannabis industry in legalized states employed 211,000 people, which surpasses the total nationwide employment in the oil and gas extraction industry, the aerospace manufacturing industry and the logging industry. The 110% growth rate in three years surpasses some of the United States’ fastest growing industry sector like health care aides, wind turbine and solar voltaic installers.
Assuming the cannabis industry continues along its current growth trajectory, the total number of people employed in the field will reach 300,000 by 2021, which matches the number of people employed by data processing and hosting companies, medical and diagnostic laboratories and ambulatory health care services.
Cannabis is creating a legitimate income stream for governments. According to New Frontier Data, medical and adult use cannabis sales generated $745 million in tax revenue in 2017. By 2020, tax revenues from cannabis will grow to $2.3 billion in legalized states.
Improving public health and safety to strengthen communities
Several states have used tax revenue from cannabis to improve their communities. For example:
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- Colorado has appropriated more than $15 million in cannabis tax revenue to provide housing solutions and treatment services for the chronically homeless.
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- Oregon uses 40 percent of its cannabis tax revenue to support its public school fund and has deposited $34 million in the fund through 2017. The state also allocates 20 percent of its cannabis tax revenue to support alcohol and drug treatment programs.
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- Washington allocates 55 percent of its cannabis tax revenue to support health care coverage for its citizens.
- Estimates indicate that Nevada’s cannabis excise tax will generate $56 million over the next two years to support school construction projects.
Our continuing commitment
We support states’ efforts to develop responsible and effective regulation governing legalized cannabis. This support includes engaging with state and federal lobbying consultants and providing consistent, sustaining support to a 501(c)4, The Good Growth Alliance, to advance policy and educational efforts related to a variety of issues that impact society, our business and our customers and consumers; including legalization efforts.
Each state’s cannabis industry and regulatory system are still in the process of maturing. Our experience growing an expansive, thriving business enterprise, and the company’s history of collaborating with government entities and other stakeholders to address difficult regulatory issues can provide invaluable insight and expertise to officials grappling with the challenges inherent in building comprehensive regulation for the cannabis industry. We are committed to working with regulatory bodies at all levels of government to help achieve these goals.
