U.S. Cannabis Council CEO Steve Hawkins on the Federal Lobbying Group’s Goals for 2022

A 501(c)4 nonprofit based in Washington, D.C., the United States Cannabis Council (USCC), launched a mere 11 months ago with the mandate “to advance social equity, end the federal prohibition of cannabis, modernize federal and state regulations and promote high ethical standards within the industry.” It counts as founding members a number of multi-state operators (MSOs) and corporate players in the space – including Acreage Holdings, Cresco Labs, Curaleaf, Jushi, LivWell Enlightened Health, Canopy Growth, and Vireo, among others. Its membership also includes ancillary  businesses, associations, and advocacy groups as founding members, including Eaze, Flowhub, Scotts Miracle-Gro, Vicente Sederberg LLP, Cannabis Trade Federation, Marijuana Policy Project (MPP) to name a few.

Additional companies join USCC all the time, but as unwieldy as the model may seem at first glance, bringing together such a large, seemingly disparate group to “strategically align and unify its members’ collective voices to advance cannabis reform” was precisely the idea behind creating USCC, which chose as its interim and now permanent CEO veteran civil rights leader Steve Hawkins, who has also been serving as executive director of MPP since 2018. Hawkins, who previously served as executive director of the National Coalition to Abolish the Death Penalty (NCADP) and executive vice president of the NAACP, recently relinquished the MPP position to Toi Hutchinson in the interest of increased efficiency and effectiveness. Hutchinson, who  previously was the senior advisor on cannabis to Illinois Gov. J.B. Pritzker (D), was recruited to serve as MPP president and CEO, per a mid-December announcement.

USCC is one of several cannabis lobbying associations working the federal beat but is arguably the one that by dint of its membership brings with it a clout unique to the industry. That level of clout also brings with it the usual questions about whose interest is being advanced. Corporate industry is not generally known for its social awareness or largesse, as much as it may lay claim to the contrary. Social equity is a mainstay issue in the cannabis industry, however, so it is expected that companies in the space will issue proclamations and expend efforts supporting it. That does not mean that they do not have other more self-serving agendas, but USCC had been managing expectations and enjoying a generally uncontroversial first year of existence … until this November, when the tranquility was interrupted by a Daily Beast article claiming that “the country’s biggest cannabis companies—some of them publicly traded with valuations in the billions of dollars—are angling for regulations that would see government hand them what critics say is a near-oligopoly, according to [a] source who leaked an internal document to The Daily Beast.” The internal document in question was alleged to have come from a USCC board presentation, but according to Hawkins, who responded immediately with a statement, “The Daily Beast report is riddled with factual errors.” CBE also posted the Daily Beast story, prompting Hawkins to refute its claims on our website, but also beginning a conversation that included an offer to interview him about the so-called internal document, and more generally about USCC’s mission and progress as it approaches its one-year anniversary.

A Dominant Force

We began our conversation at the beginning, with the reason for the founding of USCC. “I think everybody involved with the founding realized that we really had a propitious moment in this Congress, where substantial cannabis reform was possible,” said Hawkins. “But there also was an understanding that it would not happen if we were fractured and disorganized, so USCC has brought together many of the largest cannabis companies in the space, but also prominent advocacy organizations including Marijuana Policy Project, which I come from, as well as hundreds of thousands of individuals, to really speak with one voice to end federal prohibition, and to ensure that we have an equitable and values-driven industry. And so that is what brought us together and keeps us together.”

Regarding other federal lobbying groups, Hawkins does not see them as competition. “Different organizations will tend to stress different points of focus, but what makes USCC unique is that we really have coalesced the lion’s share of the federal lobbying resources that are at the table. I would certainly estimate that that’s probably 80 percent [of available resources], and that’s what makes USCC unique and powerful, and already establishing some dominance in this space. I don’t think it’s uncommon on many issues for there to be four or five entities lobbying Congress, but there will be dominant players in the space, and I think USCC is the most dominant right now in the cannabis industry.”

I asked Hawkins what dominance looks like from a USCC perspective. Is it having the ears of more legislators? I asked him what the things are he looks for that tell him he’s achieving what he wants to achieve. “From the policy perspective, if I just look at USCC’s accomplishments in this first year, we brought our CEOs to Washington just recently and had a series of meetings with members of the House and Senate,” he said. “We were with Representative Nancy Mace (R-SC) when she introduced her States Reform Act. We’ve worked with Representative Joyce on the introduction of his bill, the Hope Act,  and we’ve helped to shift the narrative around SAFE banking from one where it was being pitched as just promoting the interest of big business, when we certainly know – and I certainly know from my civil rights experience – that it’s operators of color, small operators, who, without financial assistance, will see their businesses not succeed to their full potential and in many cases fail. And I think we’ve driven home through our efforts that SAFE banking is an equitable measure in itself. Those point to some of our accomplishments, but we also have a deep bench of experience around the table. The fact that we have organizations like the Marijuana Policy Project, the Cannabis Veterans Project, the Cannabis Voters Project, around the table gives us not only the raw perspective of industry but seeing how that gets balanced with the social equity measures that are very much part of the cannabis reform effort.

“So, I think this all makes USCC not only unique, but really best situated to accomplish the task at hand, which is to make sure first and foremost that we leave this Congress with a victory, and that we prepare for what ultimately will be the end of federal prohibition,” he added. “I think that’s just a matter of when and not if at this point, so I’m excited to be over USCC at what I think is the most important time for changing the laws in this country around cannabis and making this a vibrant industry for everyone to be able to participate.”

I asked about MPP, which also shares several staff members with USCC, and how and where their missions with converge or diverge. MPP, I noted, was traditionally state-focused, while USCC appears to have federal legislation in its sites. “The organizations are not diverging,” he replied. “In fact, if anything, we’re strengthening; we’ll continue to connect our back offices and share staff, and really that’s part of the maturity of where we all need to be. Why waste precious resources having all these individual structures? In any event, we will continue to have that, but having someone specifically over MPP really turbocharges all of these efforts. I will be very focused on the federal work, Toi Hutchinson at MPP will be very focused on the state work, but here’s the thing: we understand how they really interconnect with each other. There are efforts going on right now in Congress because members of the House and Senate can see the changes that are happening at the state level. I mean, in just the last 15 months or so we’ve had eight states legalize cannabis for adult use. In South Dakota, we’ll have to go back, but that clearly shows both in red and blue states that the public supports cannabis legalization. That will influence Congress, and so USCC is not only focused on the federal effort, but several of the companies within the space are also supporting state efforts.”

Is MPP’s mission still state-focused, albeit coordinated with USCC? “I can answer that in a couple of ways,” said Hawkins. “USCC is 61 members at this point. We have different views on a range of subjects, we work on deliberations to reach some consensus, and at this point we certainly don’t have much daylight, or any daylight, with what MPP is seeking. So, what are we all seeking? We all want to see legalization at the state level. We all want to see the day when there is an end to federal prohibition, and what that means would be the descheduling of cannabis. We all want to see a regulated industry and regulations that make sense at both the state and federal level. So, those are the examples of where there’s all the alignment. While MPP is focused on the state, it also has had some federal presence and that will remain, and while USCC is focused at the federal level, there is a state policy subcommittee, which by the way is chaired by the board chair of MPP, so there’s great overlap, and that’s great ensuring that each organization is informed by the work of the other.”

Banking and Beyond

I asked Hawkins about the SAFE Act. The news had just broken that it would not be included in the defense bill under consideration by the Senate, a body blow to the industry orchestrated by Senator Schumer, who reportedly wanted to see greater social equity protections before agreeing to advance cannabis banking, and I asked Hawkins what happened. “First of all, that fight is not over,” he insisted. “We will be pushing to make sure that the SAFE banking bill passes the House and Senate and is signed by the president before this term of Congress is over. It is absolutely imperative. It has broad co-sponsorship in both the House and Senate, and there is nothing not to love about the bill. It speaks to real human needs.

“We tried with the National Defense Authorization Act to have it included,” he continued. “Rep. Perlmutter worked in the House to make sure that it was included, and there was certainly a huge outpouring of support for it. At this moment, the Senate leadership continues to take the position that comprehensive reform must come before banking. I think everyone in Washington does not think that comprehensive reform is going to happen in this session of Congress. It certainly is being teed up. It may take a couple of sessions for us to get there, but it’s not realistically going to happen in this session of Congress.”

What does comprehensive reform mean? Was [Schumer] referring specifically to social equity, or is it a bigger package that he wants to see? “That’s a great question,” said Hawkins, “because the comprehensive reform is the Cannabis Administration and Opportunity Act, but as we saw, you have David Joyce, a Republican, and you have AOC, one of the most progressive members of the House, and they teamed up and kind of brought forward a bill called the Hope Act, which would provide federal resources for expungement. So, my view is – and this is the position with USCC – that we can walk and chew gum at the same time. There is potential to see expungement passed and the potential to see SAFE banking passed as well, and UNCC will certainly be working hard on both of those bills. And, you know, as this session of Congress moves into the second year, all of that is to say that [SAFE banking] is very much alive, and there are going to be efforts to pass it. There is still a standalone SAFE Banking Act bill in the Senate, and Senate leadership will be encouraged and pushed to allow that to come to the floor.”

I brought up the dreadful 280E, which still stalks the land, bleeding small businesses dry to the point of failure. I mentioned how adamant LivWell founder John Lord had been in his insistence that the repeal of 280E, which disallows federal business deductions for cannabis businesses that almost every other business takes for granted, would by itself allow mom-and-pops to survive. ‘Well, I think certainly 280E is one of our key priorities at the USCC, and John is absolutely right,” said Hawkins. “I’ve had those conversations with him, and he is absolutely right that 280E relief would be transformational for small businesses, the mom-and-pops; that’s where most of the operators of color certainly are, and women-owned businesses, and main street businesses. It’s small but transformational at the same time. The SAFE Act is transformational at the same time, so I think the work of USCC – and certainly given my background as a former NAACP executive – is to hammer home that people really care about equity and really care about making sure that people of color and small business operators have a stake in this industry. They have to get out of this mindset that somehow these things are disconnected. I don’t know if you saw Rep. McGovern’s (D-MA) comment. He’s chair of the House Rules Committee, and he basically tore into Senator Schumer, saying what’s wrong with this guy, doesn’t he understand the importance of this for the very people that he professes to be championing?

“You know, we bought into sort of a distorted image or perception around what is equity,” he added, “and I certainly see it as part of my job to make sure that people understand this in its totality, because
equity is expungement, it’s release, it’s ensuring that people have opportunities, and that the cannabis industry will be a big ecosystem. There will be large businesses, small businesses, mom-and-pops, ancillaries doing a range of things, but this is an industry that’s being strangled right now with these prohibitions, and it’s our job as the USCC to convince Congress to allow these very basic things that really make small business possible in the United States.

It occurred to me that as corporate cannabis continues to add new talent to its C-suites, if there was any time to hire more people of color for these positions, isn’t it now, and have they agreed to do that? “Well, I’m glad you raised that,” replied Hawkins, “because USCC is embarking on several initiatives that go to that aspect of equity, because how the industry reflects the diversity of the United States will be important, at the C-suite level, at the entry level, and at the mid-management level. So, USCC has started an internship program with the Congressional Black Caucus, where several very sharp young people will be interning with a number of companies within USCC. Secondly, we’re going to be helping co-sponsor several job fairs in the coming months, because from my time at the NAACP, I’m used to Fortune 1000 [companies] coming to NAACP job fairs and being active in terms of talent recruitment, and I want to make sure that USCC is doing the same thing, because it’s important that the cannabis industry like any other industry in the United States goes after the best and brightest talent that’s out there.”

Other news embargoed at the time of our interview had to do with the launch of a new task force. “That’s the other bit of good news we have,” said Hawkins. “We have started a diversity, equity and inclusion task force that is made up of some prominent civil rights leaders, like Marc Morial from the National Urban League and Derek Johnson from the NAACP; there are Black entrepreneurs in the space and several others, including Laura Murphy and Wade Henderson, both of whom are very well respected here in Washington. So, that task force has as part of its mandate to work with our companies to ensure that we see diversity in all ranks of companies, and that we think about these issues in terms of the consultants that are hired, the ancillary businesses that we work with, and diversity in the supply chain, so that’s exciting.

“You know,” he continued, “someone like Laura Murphy, who formerly was with the ACLU for many years and worked with Airbnb; Laura’s an old hand at helping companies think through these aspects. So, I’m certainly committed, and I know USCC is as well, to make sure that we have an industry that reflects the diversity of the country. On that note, if you look at USCC and our staff, we are diverse. You asked what makes us unique. No other association that proclaims to be a national association outside of the Minority Cannabis Business Association, is diverse; no other. So, that speaks to my values, that speaks to the quality of people that we’re looking to hire, and it speaks to USCC’s commitment to ensure that we seek out talent with the understanding that we need to make sure that our talent pool reflects the vibrancy and diversity of the country.”

Managing Diversity

Speaking of diversity, USCC has a diversity of views among the member companies, to say the least, and it also has a rather large board of directors representing differing points of view and different companies
and sectors within the industry. I asked Hawkins how they reach consensus with so many people, a question that will lead to the letter and the Daily Beast article. “First of all, I’m a veteran of having worked with several big boards. I think the NAACP has like 89 board members,” he said. “You reach consensus through working through your committee structures, through transparency, through building trust with one another, and deliberation. Sometimes it means we might take a little bit longer, but that’s fine, because everyone at USCC recognizes that it would be foolhardy if we had 30 different companies running around Capitol Hill all trying to angle for their unique position. That kind of disjointedness will get us absolutely nowhere. This is the group that has come together understanding that in unity, there is strength, and with that, USCC has the capacity to accomplish more than any one company could by itself, and that’s the special sauce.”

It sounds good, but don’t all companies want to lobby for legislation that even in seemingly insignificant ways gives them a leg up? Isn’t that the point? So, how do you find consensus? “Well, I think it may not be that complicated right now,” said Hawkins. “Take SAFE banking. Sure, there may be companies that would love to see open markets, or capital markets connected to that. There might be other areas that the SAFE Banking Act could be elaborated on, but what binds us is an understanding to keep our eyes on the prize. What binds us is an understanding that we need to get SAFE over the finish line, because creating financial services benefits everyone. And so, we’re at a point where, yes, there’s always going to be devils in the detail, but we’ve got some basic big targets here that everybody can get behind, and that’s my focus.

“I’ve run coalitions for the better part of 25 years now in one fashion or another, with a lot of divergent voices around the table, a lot more divergent than this group,” he added. “So, I think that USCC is and will continue to be unified around the main tasks that are before us, and that’s to get SAFE passed, it’s to work on tax relief, and it is to ultimately see descheduling. What everyone is clear-eyed on – and I think with the maturation of the industry there certainly are substantial pros around the table who have worked on the Hill quite a while; Bo Bryant, our Senior Vice President for Government Relations, brings years of experience to the table – everybody understands that most things in Washington happen piecemeal and not wholesale, and that’s pragmatism. It’s an understanding that rarely does anyone get everything in one fell swoop. The cannabis industry won’t be any different. And so, we then approach the SAFE banking bill with that understanding, we all want to get it passed, and we might see ourselves returning to other aspects of that bill down the road. I mean, when a bill passes, guess where it goes from there, over to whatever regulatory agency is overseeing it. Passing it is just half the battle, and our members recognize that, so we reach consensus through utilizing our committee structure. We have a big policy committee that has several sub parts; folks deliberate, they meet weekly, they’re very active, and ultimately, that’s when you see the level of comprehensiveness and our response to the Cannabis Administration and Opportunity Act that’s reflective of that committee process, which has worked so far for us, and I think it will continue to do so.”

The response, a 41-page deep dive into the proposed legislation and USCC’s response to it, is perhaps the most specific explication of the organization’s positions on a variety of issues, from taxes under consideration to what regulatory agencies should oversee which parts of the industry, and many others. A result of the deliberative process Hawkins alluded to, it reads as balanced and reasonable, but I reiterated to him that the Daily Beast story in a way expressed a tangible fear among many in the industry that big cannabis does want to promulgate legislation that will benefit itself only, and that’s why you go lobby Washington, DC. Those are the primal fears that people have, and we hear them all the time. They are often general complaints, but they’re real. Big companies do want legislation in their favor, and small companies want to survive and grow, and this is an unequal environment now. So, I asked Hawkins if there was anything he could say to appease those who are sitting out there in fear of corporate cannabis.

“First and foremost, with that Daily Beast article, you had a reporter who really mischaracterized a couple of slides in a presentation to our policy committee – it wasn’t even part of a full board discussion – and it reflected just one viewpoint, of which we certainly have had several different viewpoints about a range of issues,” he said. “But to go to your fundamental question, yes, there are individuals that certainly like to portray the differences or alleged differences between big and small operators. But here’s the reality, and this goes back to what we’ve been talking about. Everyone is suffering from the fact that there is no federal tax relief; everybody is suffering from the fact that their stores can be robbed, their employees hurt; everyone is suffering from the fact that they can’t do regular banking. And while big companies might benefit from laws, from any of these reforms, I think that the bigger boost is going to be to the smaller operators at the end of the day. The big companies that you’ve interviewed, Tom; they figured out banking. Sure, they could get a better interest rate, but they’re okay.

It’s the smaller operators that are going to suffer,” he continued. “So, I mean, I’m at a point in my career where my interest in working for a large company just to make them succeed would not bring any

meaning to my life. I’m at the USCC because I see the potential here for an industry that is going to grow substantially, that still has the potential to hire hundreds of thousands of people, and the civil rights person in me wants to see people of color have good middle-class jobs, have businesses that can thrive, and also to make sure that no one’s being arrested and thrown in jail for cannabis offenses. And I think I’m in a great job in a great organization that’s working on all of that. But it’s going to start with us winning these fundamental building block victories in Congress. So, if we can see on one hand, banking passed this session of Congress, I think we’ve got another six or seven months to get it done. And if we can see the Joyce-AOC bill move through the House, and that version move to the Senate, to see expungement, then I think we’ve had a very good year, and I think both are within the realm of possibility as we go into 2022.”

Our time is about out, but I wanted to ask about two issues dear to many: consumer cannabis taxes – specifically, being sin-taxed for a medicinal product – and allowing for home grows.

“So, quickly on taxes at the consumer level,” said Hawkins. “Yes, USCC recognizes that people can be taxed to the level where they are unable to really go into the regulated market, and for patients, we have to be looking at the potential to see state taxes brought down. It certainly is crippling. In California, we have to be thinking about if we see at some point a federal tax that’s too high, it’s going to drive businesses out [of business] because consumers just won’t go.

“On your second question around home grow,” he added, “it is not something that USCC has specifically focused on in any great detail, but we recognize that many states have passed home grow for medical patients living in the rural parts of Utah, for example, where it’s critically important that people be able to home gro. Until we have greater capacity for shops everywhere, and when we get over these opt-out jurisdictions, there has to be the capacity for people to home grow, and that’s not a huge threat to the overall market. Some states limit it to four [ounces], some to eight, and then of course there are some states that still are denying it. So, I hope that’s helpful.”

I asked if there was anything Hawkins wanted to add as our conversation wound down. “Just one other aspect of USCC to mention quickly,” he said. “We have joined an organization called responsibility.org that’s done a lot of work in the alcohol space. We’ve also joined the National Alliance to Stop Impaired Driving (NASID), of which I’m now on the board. We joined it because we know that this industry has to be responsible, we have to be thinking about underage consumption, we have to be thinking about impaired driving, and we’re learning from the alcohol industry, which didn’t take these matters seriously early on. So, that is an aspect of USCC that will develop even further, because how we understand responsible consumption and consumer education is part of being a mature and responsible industry, and we’re going to make sure that that is part of our central focus as well.”