JOINT VENTURES

Legal Weed’s No. 1 Enemy

Kevin Sabet, who’s fighting to slow the momentum of the cannabis legalization movement, says he will battle to the bitter end.

Photo Illustration by The Daily Beast

Kevin Sabet is courting billionaires.

“Our competition has done a lot better in the billionaire department than we have, but I’m working on it,” he says of his nonprofit, which is a leading opponent to legalized marijuana in the United States.

A three-time White House adviser, Sabet was recently flying to New Hampshire, where he would debate the merits of drug legalization with Harvard professor Jeffrey Miron at Dartmouth College.

The evening’s Ivy League debate, with Miron advocating for the legalization of all drugs and Sabet warning against ever-expanding legalization efforts, was representative of a significantly larger conversation now happening all over the world.

We’re now witnessing the most substantial drug policy reform in modern history. But where do we go next?

As president and CEO of boot-strapped Smart Approaches to Marijuana (SAM), co-founded by former Rep. Patrick Kennedy, Sabet would like to slow the momentum of the cannabis legalization movement. But he’s also a realist looking at the long game, and he understands the surging tide—and the financial investments that ebb and flow with it—is currently against him.

“It’s still a struggle,” says Sabet. “The industry is still very organized, and they’re pushing this very hard, so we obviously aren’t under any illusions that it’s easy.”

The industry in question is the burgeoning legal cannabis industry, considered among the world’s fastest growing markets and the same entity Sabet acknowledges as his “competition.”

“We don’t have a billionaire like George Soros or Peter Lewis’ endowment—and you know, we’ve never taken a penny from Sheldon Adelson,” Sabet adds. “It’s still amazing to me that we’ve been able to raise the money we have.”

An aside: My goal with these Joint Ventures columns is to tell illuminating stories about the modern business of legal cannabis, but I think it’s also important to shine a light on the business of the anti-legalization movement, too. Sabet’s name-dropping is a quick study on some of the most influential philanthropists in the cannabis space, both for and against, and knowing a little about each of them is a meaningful transition to understanding the business challenges facing Sabet and his colleagues.

George Soros isn’t only a conservative punching bag. The successful financier and philanthropist is also the chairman of the board at the pro-legalization Drug Policy Alliance, and his foundations have donated more than $200 million to drug reform initiatives. Before his 2013 death, Peter Lewis was the chairman of Progressive Insurance who donated tens of millions of dollars toward reform efforts.

On the flip side, Adelson is the influential billionaire who seems to donate millions of dollars to campaigns opposing cannabis legalization efforts every election.

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These are some of the biggest names in cannabis because they are, in part, responsible for much of the funding that pushes up (or pulls under) these all-important ballot initiatives. And some of this funding has proven to be elusive for SAM and other anti-legalization groups.

“Where we are able to match funds, we’re able to win,” says Sabet, speaking to the nine state ballot initiatives that were decided in November 2016. “In Arizona, we matched funds and we won, even if it was close: 52-48 [percent]. In California, frankly, I’m happy we even got 44 percent. To get that in the state where the leadership was against you and they spent more than $25 million when we spent only $2 million was an accomplishment.”

The funding battle that fueled California’s pot-legalizing Prop 64 is a breathtaking example of SAM’s uphill battle. The “Yes on 64” campaign did raise $25 million, including more than $8 million from Napster founder and ex-Facebooker Sean Parker. Meanwhile most of the “No on 64” campaign’s $2 million war chest came from Julie Schauer, a Pennsylvania-based retiree who strongly opposes cannabis use.

“We are not funded by corporations,” Sabet says, moving through security at La Guardia. “We have a couple small family foundations and a few donors who primarily give because they were touched by addiction. They’re seeing a massive industry unfolding before their eyes, and they want to push back. They know marijuana saps the potential of young people, and they don’t want to create a new industry that can dupe them like the tobacco industry did.

“But we’ve never taken a penny from Big Pharma. And when it comes to corporations, the construction industry and others, they should care about this issue. So I’d hope that someday we could get funds from businesses like construction that will be negatively affected by legalization.”

(Given the construction industry’s many workplace safety concerns and modern science’s inability to accurately determine one’s cannabis intoxication, this example is a familiar one from opponents to legalization.)

But there is also growth happening at SAM, a 501(c)(3) nonprofit, and its political sibling SAM Action, a 501(c)(4) not-for-profit.

“Last year was also a big year for us,” says Sabet. “We tripled our staff, and we now have six staff in D.C., including a former Bain & Company official, a former State Department official, a former aide to a first lady at the state level and a former deputy chief of staff to a member of Congress.

“I feel incredibly lucky about the staff we’ve been able to attract. And I’ve also had to learn to become a manager and a director of a business, and they didn’t teach me that at Oxford when I got my Ph.D.”

While the business side of an anti-legalization nonprofit has its fiscal challenges, a steady stream of ballot-box victories for “the competition” doesn’t help—and legalization measures went eight for nine in November 2016, with only Arizona voters saying no to legal weed on Election Day. But Sabet’s not looking to the next five to 10 years, he’s looking ahead to the next 50 to 100 years.

“We’ve seen how long it took for tobacco to lose favor—80 years, and of course they’re still making a ton of money,” Sabet says against the drone of airline announcements in the background. “That started from a very small group, Americans for Nonsmokers’ Rights, which started in 1976 in Berkeley. I’ve studied these groups and their successes and failures, and I have a long view on all of this.”

Sabet has a persistent optimism that helps him stand out from most anti-legalization voices, and he says he won’t ever give up on his mission—not even in the face of potential federal legalization.

“Even if we lose every state, Vermont and Rhode Island and all of the others, SAM will remain and stay strong as a counterbalance to the industry,” Sabet says. “In fact, we get stronger when initiatives pass. I can’t tell you how many more allies in Colorado have come forward and said to me, ‘I wish I knew this before we voted in November. I wish I’d given you money, funded an ad, funded a billboard.’

“I’d rather win and be done with it, but what I’m saying is, as we lose, we get stronger, and I’ve always been like that personally, too. I grew up playing competitive tennis. I always did better coming from behind. It’s a sports phenomenon, a mental thing, but it gives me extra motivation. So when I see the snarky tweets on election night, I don’t throw my head on the pillow and cry—I email my staff with a plan of action for the next day and get stronger.”