Marijuana Legalization: Could It Create Big Tobacco 2.0?

Mike TuttleLife

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Back in 2013, when former head of Microsoft corporate strategy Jamen Shivley announced that he was intent on developing an upscale medical marijuana retail concern that he dubbed “the Starbucks of marijuana”, heads turned.

Shivley claimed this business as his birthright. The company he started is called Diego Pellicer (pronounced Pay-ee Sayer). Diego Pellicer was a real person. According to the company’s website:

“Diego Pellicer … was the Spanish colonial vice governor of Cebu, a major island in the Philippine archipelago, [and] grew to become the largest grower of hemp in the world.”

But Diego Pellicer is also Jamen Shivley’s great-grandfather.

When Shivley announced his intention to become the Jeff Bezos of pot, Mexican president Vicente Fox stood behind him, in hopes that such a legitimate concern would ease the illegal business running out of his own country.

A few months later, Shivley’s plan was catching some flack from the local pot growers and dispensers. They did not want this new thing to turn into another iteration of Big Tobacco.

Diego Pellicer CEO Ron Throgmartin reportedly thought it was inevitable that medical marijuana would stay small indefinitely. But Diego Pellicer kept a low profile and waited. Still Shivley believed that he could “mint more millionaires than Microsoft in this business.”

Now, in a piece in the Dallas Morning News, Kevin Sabet looks at the possibility of a Big Tobacco 2.0 with its hands in medical marijuana.

One area of expansion is in the marijuana vending machine business. “It is like a gold rush,” remarked one vending executive. Sabet reports that there is also a new private equity firm that only invests in marijuana companies.

Sabet sees the rise of vending machines, equity firms, and Shivley’s “Starbucks of marijuana” as a harbinger of no good to come. He compares these early days of marijuana legalization to the early claims of Big Tobacco that their product was actually good for you, recommended by doctors. But he argues that it is still an industry built on the premise of creating addicts.

“It is true that marijuana is not as addictive as tobacco (in fact, tobacco is more addictive than even heroin),” Sabet writes. "And marijuana and tobacco differ among other dimensions of harm. Tobacco, though deadly, is not psychoactive. And unlike marijuana, one can drive impairment-free while smoking tobacco.”

Sabet’s concern is that, although marijuana is less addictive than tobacco, it has intoxicating effects that tobacco does not.

But it would seem that these effects puts marijuana it in more of a parallel with alcohol. In fact, this is the approach that almost everyone takes with marijuana: keep it away from kids; keep it out of the vehicle; keep it away from the workplace. This is a very different model from tobacco.

The notion of what a bigger business model might do to the marijuana industry is worth looking at, but Sabet’s parallel seems to be flawed. A look at Big Alcohol might be more revealing and accurate.

Mike Tuttle
Writer. Google+ Writer for WebProNews.