Tobacco Companies Looking to Monopolize Cannabis

It was only a matter of time—cigarette wholesalers are eyeing control over aspects of the lucrative recreational cannabis industry. Companies that track, distribute and tax cigarettes in Massachusetts are seeking to monopolize recreational cannabis sales in 2018.

Northeast Association of Wholesale Distributors, a tobacco trade group, asked state officials to require cannabis producers to sell their products through their company. “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 Northeast Association of Wholesale Distributors, told the Boston Globe. “Rather than reinvent the wheel, let’s use the most successful, proven encrypted tax stamp program we have: the one assigned to cigarettes.”

Caron served as a former state representative in Massachusetts. Caron has the support of the Swiss company SICPA which stamps and tracks cigarettes and prevents bootlegging. Massachusetts taxes cigarettes at a whopping $3.51 per pack, and the system prevents retailers from avoiding the middleman and the steep tax. “Sin taxes” in California, for instance, will eventually be applied to both cigarettes and cannabis products.

The system would look like the alcohol industry, where retailers are trapped in long-term business relationships with third party wholesalers. A three-tier system “gouges consumers and enriches middlemen,” said Jim Borghesani of the Yes on 4 campaign.

According to public records, Caron emailed state Treasurer Deborah Goldberg on November 10, less than 48 hours after voters approved recreational cannabis. Caron asked to be appointed as a commissioner of the Cannabis Control Commission, but was turned down for now. State Senator Patricia Jehlen, chair of the Joint Committee on Marijuana, spoke with Caron but would rather prefer an RFID-type tracking system like the system in place in Colorado.

Tobacco companies are getting desperate. In Massachusetts, cigarette sales fell from nearly 361 million packs in 2000 to 174 million in 2016. Public health campaigns and levied taxes are the reason cigarette use is in decline.

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