Pot lobby tries to harness green energy on Capitol Hill

Businesspeople, politicians and taxpayers are seeing green when they envision the burgeoning marijuana industry. And it isn’t buds they’re dreaming of. It’s cold, hard cash, from tax revenue to lobbying fees to campaign contributions.

In Colorado, lobbyists for youth programs, law enforcement and drug rehabilitation centers jockeyed for a piece of a $27 million pot pie that will grow considerably in years to come.

On Capitol Hill, “tax and regulate” is the phrase lobbyists use to pitch representatives on fixing federal laws that conflict with legalized marijuana in the states.

And those pitches are occasionally accompanied by checks to helpful politicians at the state and national level. The growth of the cannabis industry has the Center for Responsive Politics creating new classifications of campaign contributors for its popular OpenSecrets.org website.

It’s a clear shift in strategy around a drug that’s still illegal under federal law but legal in two states for recreational use and in 22 states for medical purposes.

“It’s been almost a full 180 in terms of the issue and credibility,” said Dan Riffle, a Washington lobbyist for the Marijuana Policy Project. “After the [2008 financial] crash, the tax windfall really became a convincing argument.”

In January, Colorado became the first state to open retail marijuana stores to anyone age 21 or older, two months after voters approved a 10 percent retail tax and a 15 percent excise tax on the drug.

In the first month, with only a few recreational stores open, tax revenues totaled $2 million. State officials estimate that cannabis sales will bring in more than $143 million in tax revenue annually in coming years.

How to spend that money brought out “everyone who wants to feed at the trough,” said state Sen. Pat Steadman, D-Denver, vice chairman of the legislature’s budget committee.

Steadman, who has been involved in marijuana regulation legislation for the five years he has been in the state Senate, convinced fellow lawmakers this year to take it slowly on spending the pot money. For now, the revenue from one year will be saved and spent the following fiscal year. At least $40 million a year must go toward school construction.

Lawmakers divided another $27 million among treatment programs, law enforcement and youth programs for 2014–15. It’s an effort to focus spending on potential outcomes of increased marijuana use, he said, and hedge against uncertainty in an industry that’s illegal at the federal level.

“You shouldn’t be authorizing spending of all this pie-in-the sky money [when] nobody knows that it’s real,” Steadman said. “If the feds come in and shut this all down … we haven’t made all these promises.”

Riffle geared up at a Capitol Hill Starbucks on a recent Monday morning for a day of meetings in House and Senate offices to push for a bill to end federal intervention in states that have legalized recreational or medical marijuana.

The primary sponsor is Rep. Dana Rohrabacher, R-Calif. But the measure has yet to have a hearing in the House, so Riffle lobbies plenty of other Republicans, trying to get them on board. Marijuana lobbyists and supporters are also trying to chip away at federal laws by offering floor amendments, and one recently garnered 195 votes, 23 short of what’s needed to pass the House.

“Dana’s a conservative Republican. There’s a number of conservative Republicans on that bill,” Riffle said. “People are hungry for information about this. It’s a new, exciting, energetic issue.”

The National Cannabis Industry Association recently hired as its lobbyist Michael Correia, who worked for a GOP congresswoman and the American Legislative Exchange Conference, a conservative policy group.

He is focused on two issues: allowing banking for existing cannabis businesses and changing tax laws so those in the industry are treated like other legitimate businesses. He’s therefore targeting Republicans on the key tax and financial services committees.

But Correia knows his work will take time, and legalization on a federal level isn’t part of his effort.

“This is being done at the state level and by the public,” he said. “Congress is not going to get in front of it.”

That’s where Robert Capecchi comes in. He monitors activity in 15 states for the Marijuana Policy Project. He’s heartened by Minnesota’s recent passage of a medical marijuana system, Maryland’s limited decriminalization and the potential for legalization in Rhode Island.

Capecchi said he’s hoping Rhode Island will be the first state to tax and regulate via the legislature.

Where a business group lobbies elected officials, campaign cash is sure to follow.

The National Cannabis Industry Association has a political action committee, although it has taken in only about $41,000 so far this cycle.

The Marijuana Policy Project has donated $48,500 to members of Congress or their leadership PACs from January 2013 through March 31, according to the Federal Election Commission.

“We actually held a fundraiser for Representative Rohrabacher a couple of months ago when we moved into our new office,” Riffle said. “We’re a conventional lobbying organization just like any other interest group … If you want to be serious about changing the law, those are the rules of the game in D.C.”

Among Rohrabacher’s contributions so far this year are $1,000 from the Drug Policy Reform Fund and $500 each from the cannabis industry PAC and its executive director.

When Steadman was invited to speak to a Colorado industry group last fall, the checkbooks came out, he said.

“There were at least 30 people. They were all writing their checks and passing them to the head of the table,” he said, noting the money went to his leadership PAC. “Some of them have gotten pretty sophisticated about that … They need to be a player.”

The industry may help deliver electoral victories as well. Some believe Colorado’s 2012 legalization vote helped President Barack Obama win the state, though he got fewer votes than legalization did.

After Beto O’Rourke declared his support for legalizing marijuana, he defeated the incumbent in the 2012 Democratic primary for Texas’ 16th Congressional District, in and around El Paso, and went on to win the general election.

Correia said the marijuana issue can win votes from young people, who overwhelmingly favor legalization, along with a lot of other demographic groups.

“Democrats understand that already,” he said. “Republicans are still trying to find the next demographic group to reach out to.”

But 2014 is only a start.

According to Capecchi, “2016’s going to be a big year.” Two years from now, he said, legalization ballot initiatives are expected in several states, and the money will continue to flow.