To keep the cannabis industry happy before 2022 election, here’s what Newsom needs to do

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Governor Newsom celebrated his victory Wednesday night as preliminary vote counts indicated that he successfully defeated the recall effort. But Leafly Senior Editor David Downs says the rollout of cannabis legalization may cost him support from industry insiders. Photo by Fred Greaves/Reuters.

Governor Gavin Newsom doesn’t need to worry about losing his seat right now, but he'll be fighting to lead California again in a little over a year. When that time comes, he may need to appease the cannabis industry. 

Leafly Senior Editor David Downs talks about how Newsom has dealt with the burgeoning cannabis market, and whether pot will have a role to play when he’ll likely be on the 2022 ballot.

KCRW: Since Newsom took office in 2019, cannabis’ profile has risen in both California and nationally. Should the industry be specifically giving him kudos?

David Downs: “Gavin Newsom, I don't think gets enough credit for …  sticking his neck out super early on marijuana policy reform over the years, starting with his time as a mayor in San Francisco. 

He then helped lead and share the Blue Ribbon Commission to look into what Proposition 64 would ultimately read like. 

And then he oversaw the rise of the legal cannabis industry here in California — the biggest adult-use market in the world. 

When the pandemic hit in 2020, he led the way by designating cannabis as one of the “essential industries,” which led to a boom in sales for cannabis and a supercharging of the industry's growth. 

We're still in the middle of dealing with the growing pains of a lot of the things that he set in motion. So he's very much the pied piper of … marijuana policy reform on the national and the international level, despite the disagreements that some of the industry has with him.”

What have some of Newsom’s detractors in the industry said about him?

Ed Rosenthal, a major grower in Oakland, who was part of historical efforts to legalize and advance reform, endorsed Gavin Newsom.

But then immediately, you could see in the comments on Ed's Instagram posts — the full range of fringy types in cannabis that do have legitimate issues with the rollout of legalization in California. 

There is an extreme left and an extreme right in cannabis, and they wrap around and meet with regard to critics of … how things had rolled out in California. 

At the same time, the people that they were endorsing, like Larry Elder,  didn't really have any big solutions to the structural problems with California's newly illegal market. 

He was just tapping the latent frustration from a lot of players who continue to struggle to operate in this market.”

It seems like there are two camps: Policy people who are pleased with Newsom and purveyors who say there is a lot to be desired.

“California policy is this lens that brings into focus all of California's problems. And they really do stem from contradictory impulses in the electorate. 

Think about the tussle between local control, building housing, and the homeless issue that's playing out in cannabis. 

Think about the tussle between liberals and taxing, spending and wanting those freedoms versus actually enforcing the law and providing incentives for legal operators to act legally. 

Gavin Newsom sits at the top of a lot of things you can't control in California. And the rollout of legalization and the trouble with expanding more local stores are broader problems with how California handles growth and licensing.”

What will Newsom need to do to get the cannabis industry on his side for the 2022 election?

“I think he can really help by looking at the tax rate or looking at the regulations. They're in the process of merging three bureaucracies into one, and it remains to be seen if they can reduce the barriers to entry to illegal cannabis. 

In terms of the regulations there, if he puts forth local incentives to regulate and open stores, that's going to loosen the bottleneck in legal cannabis. 

He also needs to promulgate equity fixes that [are] around drug war victims who are trying to get access to the industry and how that process works. It's not really working smoothly so far. 

On the other hand, he has to deal with calls for increased enforcement and compliance, which for the most part have been non-existent due to COVID. So if you're a good actor in legal cannabis, you're seeing bad actors run circles around you, and enforcement to be non-existent. 

But overall, Republicans are going to have to put forth solutions to these intractable problems in a way that takes votes away from Governor Newsom. We didn't see that this year.

I don't know who the GOP has on their bench, or what their think tanks are coming up with, but in the war for hearts and minds and for ideas, Gavin Newsome remains to be the one to beat.”

Could the GOP win over the cannabis world if the party embraces a free market approach?

“They might like lower taxes and say they like lower markets, but they put 100% prohibition tax on cannabis and throw hundreds of thousands, if not millions of people, in jail over decades for this.

It'd be hard for them to convince a big chunk of pro-cannabis people that a conservative is the way to go.”



Matt Guilhem


Tara Atrian