These California politicians once helped regulate legal marijuana. Now they’re working for the industry
SACRAMENTO — As California’s attorney general from 1999 to 2007, Bill Lockyer was on the inside as the state wrestled with a developing marijuana industry. But these days he’s watching the transformation from the outside, as co-founder of a licensed pot distributor in Lynwood.
Lockyer, whose four-decade public career included a stint as the powerful leader of the state Senate, is among a growing number of former government leaders, bureaucrats and regulators who have joined or established financial ties with the multibillion-dollar marijuana industry in the last few years.
More than two dozen government officials in California have made the leap. Most, like Lockyer, jumped in after voters in 2016 approved Proposition 64, which legalized growing, distributing and selling cannabis for recreational use.
Lockyer said he was drawn by his fascination with seeing a new industry spring up.
“What has been interesting to me — an academic interest — is watching a whole new business sector evolve, from an illicit market to a legal system, and how people do it and the companies that get created. It’s rare that you ever get to see that,†Lockyer said.
Other top California politicians who have entered business relationships with the cannabis industry include former Los Angeles Mayor Antonio Villaraigosa; former Rep. Dana Rohrabacher (R-Costa Mesa), who transitioned to the pot industry after losing a reelection bid last year; and former San Fernando Valley Assemblyman Felipe Fuentes, a Democrat whose lobbying firm has a cannabis client that he says is handled by his partner.
On the national level, former House Speaker John Boehner (R-Ohio), former Senate Majority Leader Tom Daschle (D-S.D.) and former Rep. Joe Crowley (D-N.Y.) are among those who now make their money off the legal marijuana trade.
Five former aides to Gov. Jerry Brown, who left office in January, have also gone to work for cannabis businesses or lobbying firms that assist such ventures. In addition, web giant Weedmaps hired a lobbying firm formed by two former advisors to Gov. Gavin Newsom.
And former senior officials at the state Bureau of Cannabis Control, the state Department of Food and Agriculture’s pot cultivation licensing office, the state Department of Justice’s drug enforcement unit and three former senior legislative aides are also advising pot firms, including one former official who helped write the state’s cannabis regulations.
“There is an opportunity to make a lot of money,†said Lindsay Robinson, executive director of the California Cannabis Industry Assn. “It’s dynamic and exciting.â€
California has the world’s largest market of legal cannabis sales, which is expected to reach a record $3.1 billion this year, growing to $7.2 billion in 2024, according to a study released last month by sales-tracking firms Arcview Market Research and BDS Analytics.
Cannabis firms that need help navigating bureaucracy stand to gain valuable knowledge from enlisting government veterans, said Lockyer, who retired from politics when his term as state treasurer ended in 2015 and is a founder of C4 Distro, a state-licensed distribution firm.
“As a general matter, business and government transmit on different wavelengths, and so there is some value in having somebody be able to translate to each side,†Lockyer said. “If there is somebody who understands business and government, there is some value they can bring to the business operation.â€
In addition to high taxes and complicated regulations, chief among the problems the new legal industry faces is a struggle to compete against a pervasive black market.
“Everybody is complaining,†Lockyer said of the legal industry. “A very common complaint is how much illegal activity there is.†The problem, according to the state’s former top cop, is the level of enforcement. “It doesn’t exist,†he said.
But the move of so many government insiders to the pot industry is worrying to Scott Chipman, Southern California chairman of Citizens Against Legalizing Marijuana, which opposed Proposition 64.
“The pot industry hiring ex-officials is particularly egregious because of the harm this industry does to kids, young adults, families, communities and the country in general,†he said.
Chipman said government officials should be barred for 10 years from lobbying on behalf of cannabis clients.
A bill by Assemblywoman Melissa Melendez (R-Lake Elsinore) that would have extended the ban on former lawmakers lobbying the Legislature — from one year to five years — recently died in the Legislature.
“No one should be naive enough to think that industries like the cannabis industry are not closely watching to see which legislators are inclined to support bills that favor their particular industry, and which legislators seem to have the most influence,†Melendez said. “This is all helpful information when trying to court future lobbyists to strengthen your political power.â€
Rey Lopez-Calderon, executive director of government watchdog organization California Common Cause, also supports a stronger revolving-door policy and said the exodus of government officials to the pot industry was predicted.
“It’s lucrative,†he said. “You have a new industry, and it obviously has a high reward potential, and these folks have influence.â€
Rohrabacher became a shareholder and member of the advisory board of Budtrader.com, an online cannabis social media site, after a congressional career in which he had long advocated for cannabis legalization, according to Brad McLaughlin, the company’s chief executive.
Rohrabacher said at the time that with his “knowledge of the system and my contacts, we will not rest until every American has the freedom to decide if medical or even recreational cannabis is right for them.â€
Industry firms that have hired government insiders as lobbyists include Weedmaps, which helps cannabis consumers find pot shops and delivery services through its website. Until recently, the company refused state demands to stop listing unlicensed cannabis sellers. Last month, it announced it would stop listing such firms.
Shortly after Newsom’s election, Weedmaps hired a lobbying firm headed by Kevin Schmidt, who for five years was policy director for Newsom when he served as lieutenant governor. Jason Kinney, a key advisor on Newsom’s gubernatorial transition team, also works for the firm.
Kinney said in February that he planned to focus on non-cannabis clients. When asked recently whether he is working on behalf of clients in the legal marijuana industry, Kinney said by email that the company “fully and publicly discloses all lobbying clients and activities on their behalf.â€
Another big industry player that has hired political insiders is Eaze Solutions, an online platform that arranges marijuana deliveries.
In January, it hired Elizabeth Ashford as senior director of corporate communications. Ashford served as chief of staff for Kamala Harris when she was state attorney general, and in key roles with Brown and former Gov. Arnold Schwarzenegger.
One of the lobbying firms hired by Eaze is Sacramento Advocates Inc., whose lobbyists include two former high-level aides to Brown, including Gareth Elliott, who is a partner. Eaze also hired a former aide to state Sen. Steven Bradford (D-Gardena), the author of major cannabis legislation, to be its government relations manager.
California’s legal market has struggled to get off the ground, with most cities and counties banning pot shops while the licensed firms complain of high taxes and thick government red tape. Politicians and government insiders who now work for the industry say they can use their knowledge to help make the system work.
“I think everyone would agree there is still much work to be done,†said Dean Grafilo, who served under Brown as director of the California Department of Consumer Affairs, which includes the Bureau of Cannabis Control, before he moved this year to the lobbying firm Capitol Advocacy. The firm’s clients include Surterra Holdings, whose subsidiaries make and distribute medical cannabis products, including oils, tinctures, vape pens and lotions.
Max Mikalonis was a top advisor to Assemblyman Rob Bonta (D-Alameda) and helped write new laws to regulate the marijuana market before he became a lobbyist with K Street Consulting, where he said he focuses exclusively on helping cannabis business clients.
“Both K Street and myself provide both legislative and regulatory advocacy and just plain advice to our clients on different topics,†he said, adding that he lobbied this year on behalf of cannabis client Event Horizon Technologies for a bill that would allow firms to provide trade samples.
Former regulators and state enforcement officers have also made the leap into the industry.
Joe Devlin was the chief of cannabis policy and enforcement for the city of Sacramento, where he created a system for licensing pot businesses while shutting down illegal operators. These days, Devlin has traded his suit and tie for shorts and flip-flops as he helps a start-up cannabis company navigate the maze of government bureaucracy to obtain permits to grow, distribute and sell the drug.
Devlin now works for Ikänik Farms, which is building a portfolio of cannabis retail dispensaries and cultivation facilities. He didn’t get a pay raise, he said, but the new job appealed to his entrepreneurial side.
Experts in government are critical to a burgeoning industry dealing with complex regulations, Devlin said.
“There is a need for people in the cannabis industry who understand how government works, and who understand regulation and understand compliance,†he said. “There has never been a policy topic that I have been part of that was even remotely this complicated.â€
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