Customer donations at cannabis shops may help fund new super PAC called Legalize America

By Steve Gelsi

Legalize America is an independent super PAC with backing from Curaleaf, Cronos Group and the U.S. Cannabis Council

A super PAC called Legalize America is launching Wednesday with backing from advocacy group the U.S. Cannabis Council and legal cannabis companies. It's described as the first super PAC aimed at cannabis reform in the U.S., MarketWatch has learned.

Curaleaf Holdings Inc. , Cronos Group (CRON.T) and payments specialist Dutchie are among the supporters of Legalize America, which will raise money from cannabis companies and from customers and dispensaries as the 2024 political season heats up.

The group is exploring a fundraising effort funded through round-up donations from customers at cannabis dispensaries that will start with a test program this summer at an unnamed location. Legalize America hopes to expand the program to a range of multistate cannabis operators around the country.

"We'll support candidates who are advancing reform and oppose those who are blocking it," said David Culver, senior vice president of public affairs for the U.S. Cannabis Council.

The option of making round-up donations has already been offered at some cannabis dispensaries to fund for other causes, such as the Last Prisoner Project, a nonprofit devoted to cannabis criminal justice reform.

Legalize America is a bipartisan group that will use all the traditional tools of super PACs, including scorecards of how elected officials vote, endorsements and targeted independent expenditure campaigns to support cannabis reform.

The group's initial priorities include working to pass the SAFE Banking law to open up the U.S. financial system to cannabis companies, as well as urging the Biden administration to change the current status of cannabis as a Schedule I controlled substance under U.S. law , either by making it a Schedule III drug or descheduling it entirely.

It will also work with the Food and Drug Administration and other federal agencies on regulating cannabidiol, or CBD, a move that could end up affecting federal rules around all cannabinoids, including THC.

While at least two-thirds of Americans support marijuana legalization and 23 states now allow adult-use cannabis sales, cannabis remains in the same category as heroin under U.S. law.

"Congress is stuck in the past," Culver said. "They're way behind what Americans want. It's not unusual for Congress to be a lagging indicator."

The round-up donation program has the potential to raise significant amounts of money, but the group did not comment on projected donations.

Legalize America is an independent organization, but the group's board members are all affiliated with the USCC. Matt Harrell, vice president of government relations at Curaleaf, is the chair of Legalize America's board, and Pete Meachum, vice president of government affairs at Cronos Group, is the board secretary.

An anti-cannabis organization called Smart Approaches to Marijuana has also been ramping up its work on Capitol Hill.

Also read:This group that opposes marijuana legalization is trying to 'take back 4/20'

Also read:Pot advocates call for expungement of cannabis records in rare hearing on Capitol Hill

Matt Karnes, founder of GreenWave Advisors, a cannabis research and advisory firm, said lobbying efforts on behalf of the cannabis industry remain "insignificant" compared with those of the opposition, which for the most part includes large pharmaceutical, tobacco and alcohol companies.

"Clearly, momentum is building in favor of federal reform as an increasing number of Americans support the end of cannabis prohibition," Karnes said. "To get legislation over the line, I do think the time has come for the industry, and in particular the larger multistate operators, to lean in with a more aggressive lobbying effort."

Meanwhile, Green Thumb Industries Inc. has hired lobbying firm Akin Gump, and Trulieve Cannabis Corp. has spent about $39 million to support getting an adult-use cannabis referendum placed on the ballot in Florida.

A PAC is a political action committee that raises money to support causes. Super PACs (independent expenditure only political committees) are committees that may receive unlimited contributions from individuals, corporations, labor unions and other PACs for the purpose of financing independent expenditures and other independent political activity, according to the Federal Election Committee.

Also read:Canopy Growth cuts 1,200 jobs in past year and issues 'going concern' warning as analyst eyes solvency of cannabis company

-Steve Gelsi

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06-28-23 1059ET

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