California Weed

Big money, frictions light up 2016 pot initiative drive

Medical marijuana plants are shown at a medical marijuana dispensary in Oakland.
Medical marijuana plants are shown at a medical marijuana dispensary in Oakland. AP file

Big donors, led by former Facebook president Sean Parker, are lining up to fund a 2016 California initiative to legalize marijuana for recreational use.

But behind the scenes, legalization efforts are splitting California marijuana advocates with national drug-policy groups over such things as including initiative language to protect marijuana users from job discrimination or over how tightly to restrict pot cultivation or cannabis industry operations.

With billionaires now readying to fund legalization efforts, some cannabis activists fear they will be left on the sidelines on an issue they pioneered and elevated to political relevance.

Parker, supported by other would-be major funders, has hired Sacramento political consultant Gale Kaufman and the capital political law firm Olson Hagel & Fishburn to draft a 2016 initiative and lead the marijuana legalization effort, according to five sources affiliated with cannabis advocacy groups or the marijuana industry.

Kaufman and Olson Hagel senior partner Lance Olson declined to return calls for comment, and Parker couldn’t be reached.

In the cannabis community, the Parker effort is considered the most likely to reach the ballot due to its financial clout alone. Marijuana advocacy groups such as Reform California and the Drug Policy Alliance, which until now have been pursuing initiatives of their own, are uncertain over what influence – if any – they will have on the 2016 measure.

Besides Parker, a billionaire tech executive who co-founded the file-sharing music service Napster, other likely initiative investors include wealthy heirs to the Hyatt hotel chain and Progressive insurance, according to multiple sources.

Previously, Justin Hartfield, an Irvine venture capitalist who founded Weedmaps Media, a website and mobile app that guides consumers to marijuana dispensaries, put up $1 million on April 20 for a separate committee backing legalization efforts. Hartfield also donated another $1 million to support marijuana-friendly political candidates.

Yet disputes persist between political camps over how broadly or narrowly to set marijuana market rules for California, which already boasts America’s largest pot economy with medical marijuana alone.

A coalition called Reform California, whose partners include many long-standing California marijuana advocates, is backing its own initiative to legalize possession of an ounce of pot and personal cultivation of 100 square feet of marijuana for adult recreational use.

The Reform initiative also proposes a tiered taxation system on the marijuana supply line from cultivation to retail sales. It also would require voter approval for city or county bans on marijuana dispensaries and other cannabis businesses, a step considered worrisome for some local government advocates.

The group says it has amassed an 80,000-name crowd-funding list of small donors and some unspecified larger donors, but acknowledges it had hoped to work with Parker or similar major financial players.

A national group, the Drug Policy Alliance, differs with Reform California over marijuana industry and cultivation rules as well as over initiative language on anti-discrimination protections for workers who have doctor’s recommendations for medical marijuana or use marijuana during nonworking hours.

Meanwhile, early drafts of initiative language from the Parker group – seen as too restrictive by some Reform California advocates – have added to tensions, according to people familiar with the different camps.

“We have all been in negotiations with each other both separately and independently,” said Dale Sky Jones, the chairwoman of the Reform California campaign, who said she has personally spoken with Kaufman as well as representatives for Parker. “It’s currently a disjointed effort. We are still talking and trying to find a path to one initiative.”

Reform California has hired Sacramento political strategist Jim Gonzalez, who managed the campaign for California’s 1996 Proposition 215 medical marijuana initiative. Also working with the group is Joe Trippi, who ran the presidential campaign of former Vermont Gov. Howard Dean in 2004.

The Drug Policy Alliance has been privately circulating a proposed California legalization initiative of its own but hasn’t submitted a measure for the ballot. The group, funded by liberal philanthropist George Soros, helped lead Oregon’s 2014 successful recreational marijuana initiative and backed winning 2012 legalization votes in Colorado and Washington.

Lynne Lyman, the Drug Policy Alliance’s California state director, said the DPA still hopes to influence efforts by “the funders’ group,” including Parker, so that a consensus initiative may emerge. But that prospect is far from certain.

“There is certainly friction for a variety of reasons,” Lyman said. “Some of it has to do with content. Some of it has to do with approach. For DPA, it’s primarily a social justice issue: This is about rolling back the war on drugs and reducing the hardships for people of color” from unequal marijuana enforcement.

She added: “Other people are more concerned about industry issues. It’s not trivial that we all come from different approaches and areas of priority.”

According to sources, other would-be donors aligning with the Parker Group include New Approach PAC, a Washington, D.C.-based political action committee tied to the family of late billionaire Peter Lewis, former chairman of Progressive Corp. New Approach PAC was a major campaign contributor to Oregon’s Measure 91 recreational marijuana initiative in 2014.

Also part of the effort are investment executives Joby and Nicholas Pritzker, descendants of the Hyatt Hotels founder. Joby Pritzker has been a board member for the Marijuana Policy Project.

Previously, Hartfield of Weedmaps announced his cash infusion into the recreational marijuana cause in April with the formation of a political action committee called Californians for Sensible Reform.

In his April 20 statement, he said he was putting his money behind “a generational cause and an economic imperative ... to get this billion-dollar industry out of the shadows and to fully monitor it and regulate it.”

The Parker group is said to be working on an initiative that seeks to appeal to a broader audience than constituencies of marijuana advocacy or business interests. Their effort follows a July report by a Commission on Marijuana Policy headed by Lt. Gov. Gavin Newsom that he said he hoped would influence authors of marijuana legalization measures.

The commission’s 93-page policy document didn’t spell out specific regulations or taxes on recreational marijuana. But it expressed support for “a new licensed market” for small and midsize cannabis businesses so that “the industry and regulatory system are not dominated by large, corporate interests.”

When the report was released, Newsom said he would “work hard” to defeat any marijuana initiative he sees “as looking to capitalize on the next California Gold Rush.”

Dale Gieringer, California director of the National Organization for the Reform of Marijuana Laws, said he saw recent ballot language for the initiative expected to be funded by the Parker group. After helping draft the Reform California initiative, Gieringer said he disliked the measure’s marijuana industry governing plan and said it fell short in rolling back criminal penalties for marijuana and in protecting medical cannabis users. “We have issues with it,” he said.

The frictions worry many marijuana advocates, who blame intense divisions within the cannabis community for helping defeat a previous legalization measure, Proposition 19, in 2010. “I think we can ill afford to lose another election we should win,” said Steve DeAngelo, executive director of Oakland’s Harborside Heath Center medical marijuana dispensary and an influential California advocate.

Until Parker apparently decided to take his checkbook in a different direction, Reform California sought to position itself as the group with the broadest political support to lead the initiative effort.

The Reform California coalition includes Richard Lee, a former Oakland medical marijuana entrepreneur who bankrolled Proposition 19 effort in 2010. Its initiative emerged after months of meetings with California labor and cannabis advocacy groups as well as the state NAACP, whose president, Alice Huffman, endorsed the measure.

But the Drug Policy Alliance and Marijuana Policy Project, which also participated in general policy discussions, notably walked away after Reform California filed the actual measure.

“Now everybody is waiting to see what the Weedmaps guy and Sean Parker are going to come up with,” said Omar Figueroa, a Sebastopol attorney for medical marijuana businesses. “This is a time of uncertainty.”

Figueroa is supporting two other legalization initiatives that have been submitted for the 2016, including one led by Dave Hodges, a former operator of the All-American Cannabis Club dispensary in San Jose.

Meanwhile, Gieringer, who said other initiatives may still emerge, said he expects “there is going to be discussion and negotiations and probably some polling done” before ballot language is settled.

“Hopefully, people will agree. I suspect they won’t,” Gieringer said. “And I think the funders will make a choice.”