LOS ANGELES — In 1978, two market forecasters with the Brown & Williamson tobacco company wrote a report in which they imagined what might happen if marijuana was legalized.
While legalization would cause “a period of difficult reappraisal in tobacco company strategy,” they wrote, “marijuana products seem to be a logical new industry for tobacco companies.” There could be a drop in demand for tobacco immediately following legalization, but once the “novelty effect” of marijuana had worn off, “tobacco consumption again rises to near pre-legalized marijuana levels.”
And, the forecasters continued, “Two marijuana-containing products are highly probable: a straight marijuana cigarette and a marijuana-tobacco blend.”
At the time, any scenario of marijuana legalization might have seemed pie in the sky. In 1971, President Richard Nixon had declared a “war on drugs” and, in a 1972 document, tobacco giant R.J. Reynolds predicted only a 15 percent probability of legalization by 1980.
But now, 36 years after the B&W report, the medical use of marijuana is legal in 20 states and the District of Columbia, while two states — Colorado and Washington — allow the sale and possession of cannabis for recreational use by persons 21 and older.
According to a new study by public health researchers, those legislative moves may have paved the way for Big Tobacco to diversify into Big Cannabis.
“Legalizing marijuana opens the market to major corporations, including tobacco companies, which have the financial resources, product design technology to optimize puff-by-puff delivery of a psychoactive drug (nicotine), marketing muscle, and political clout to transform the marijuana market,” the study, titled “Waiting for the Opportune Moment: The Tobacco Industry and Marijuana Legalization,” says.
Authors Rachel Ann Barry and Stanton A. Glantz of the Center for Tobacco Research and Education at the University of California, San Francisco, and Heikki Hiilamo of the University of Helsinki, Finland, say the B&W report and other internal tobacco industry documents show that since at least 1970, three multinational companies — Philip Morris, British American Tobacco (the former parent of B&W), and R.J. Reynolds — have considered manufacturing cigarettes containing cannabis.
The study was published earlier this month in the Milbank Quarterly, a health policy journal.
“In the current favorable political climate for marijuana decriminalization, policymakers and public health authorities should develop and implement policies that would prevent the tobacco industry … from becoming directly involved in the burgeoning marijuana market, in a way that would replicate the smoking epidemic, which kills 480,000 Americans each year,” the authors recommend.
Tobacco companies have responded to the study by denying any interest in the marijuana market. “Our companies have no plans to sell marijuana-based products,” a spokesman for Altria Group Inc., the parent company of Philip Morris, told the Los Angeles Times. “We don’t do anything related to marijuana at all.”
But Barry notes that the companies have made similar denials in the past.
“There is a risk that the tobacco industry, with its history of manipulating consumers’ consent and regulatory frameworks, will take over the retail marijuana market,” she told MintPress News.
The B&W market forecast is part of UCSF’s massive Legacy Tobacco Documents Library, an archive of more than 80 million pages of documents that became available as a result of litigation against the tobacco industry.
The archive provides far from a complete record of the industry’s discussions about marijuana. “Because marijuana was not a focus of [the tobacco] litigation, there may be more information from the tobacco companies on this question that was not made available through the LTDL,” the Milbank Quarterly study says.
“We also found several documents that were attorney-client privileged and so were not available to us,” Barry said.
The study suggests that the marijuana market has an obvious attraction for Big Tobacco, since both marijuana and tobacco are smoked, can be consumed using a vaporizer, and may be ingested orally. Earlier this year, Altria acquired e-cigarette company Green Smoke and, the study says, the National Organization for Reform of Marijuana Laws has been helping tobacco and e-cigarette companies in opposing efforts to include e-cigarettes in clean indoor air laws.
“The association of marijuana and tobacco use has direct implications for the tobacco industry as marijuana becomes more accessible,” the researchers said.
The earliest documents quoted in the study date back to 1969, when Philip Morris asked the U.S. Department of Justice to secretly secure marijuana from the government for marijuana research. The company envisioned analyzing the smoke from marijuana in the same way it had analyzed smoke from tobacco.
The collaboration with the government, Philip Morris’ then-president wrote, would allow the company to explore “potential competition” and “a possible product.”
“[W]e regard it as an opportunity to learn something about this controversial product, whose usage has been increasing so rapidly among the young people,” another Philip Morris official said in an unsigned memo in 1970.
What became of that project is unknown — no files have been found in the National Archives. But around the same time, Philip Morris’ competitors were also eyeing the possibilities of marijuana, with the head science advisor of British American Tobacco writing that marijuana-laced cigarettes would be a “natural expansion of current smoking habits, which, if a more tolerant attitude were ever taken to cannabis, would be a change in habit comparable to moving over to cigars.”
If marijuana was legalized, an unsigned British American Tobacco memo from 1976 said, “one avenue for exploitation would be the augmentation of cigarettes with near sub-liminal [sic] levels of the drug.”
R. J. Reynolds, meanwhile, conducted marijuana research as recently as 1992, when the company decided to compare the basic properties of nicotine and the psychoactive ingredient of cannabis. The company “should know more about cannabinol in view of the possibility of its future more frequent use in certain European countries,” an executive explained in a memo.
Legal marijuana is now a big business. This year, it is expected to generate as much as $2.6 billion in revenue, mostly in California, and it is forecast to grow into an $8 billion industry by 2018.
But with the drug still illegal under federal law, the typical marijuana producer is a mom-and-pop operator. “Not a single cannabis-related company is bigger than $100 million, not even close,” Troy Dayton, CEO of cannabis venture capital firm The Arcview Group, told the AlterNet website. “Show me another industry of this size that doesn’t have such a player.”
One new company, Cranford’s Cigarettes, is selling all-marijuana cigarettes for $50 to $60 a pack in stores around Colorado. “With federal law, Big Pharma and Big Tobacco can’t step into the game right now,” Chief Operating Officer Chris Connors told AlterNet. “That’s why we got in.”
Colorado’s legalization law was passed in 2012 in part because of the efforts of groups like the Marijuana Policy Project. Spokesman Morgan Fox is sanguine about any threat that Big Tobacco might pose to the marijuana market.
“It’s hard to tell what the intentions of the tobacco companies would be if they were to enter the marijuana market,” he told MintPress. “But the fact that they do not have the same level of experience in the industry as those who have been involved in it for years suggests that they may have trouble gaining a significant market share.”
The tobacco industry’s marketing muscle might be hamstrung, Fox suggested, because states where marijuana is legal have imposed strict regulations on advertising and the addition of addictive chemicals to marijuana products. “Colorado specifically bans additives, tobacco/marijuana mixtures, and alcoholic marijuana products,” he noted.
A large number of marijuana consumers are also hostile toward tobacco companies, Fox said. Any concern, he added, about “what will happen to the marijuana industry if the tobacco industry enters the market is akin to worrying about the safety of the health food industry if McDonald’s started offering an organic menu.”
But the authors of the Milbank Quarterly paper say advocates of marijuana legalization should consider “the potential effects of the multinational tobacco companies entering the market … with their substantial marketing power and capacity to engineer marijuana cigarettes to maximize efficacy as drug delivery systems.”
The initial moves toward legalization, they note, have removed “some of the public relations and legal hurdles that have, so far, kept major corporations — including tobacco companies — out of the market.”
And even if Big Tobacco stays out of the market, UCSF’s Barry predicts that the days of “Micro-Marijuana” are numbered.
“[There] will be some other large corporate entity with the economic muscle and marketing power to dramatically change the retail marijuana market,” she said.