Big Tech is Warming to Cannabis and the Cannabis Industry
On February 13, 2021, actor and cannabis farmer Jim Belushi posted on Twitter:
“So sick of Facebook / Instagram. They shadow banned my farms [sic] Facebook page Belushi’s Farm and our Instagram. PLUS, they constantly take down our content. Don’t they know canabis [sic] is a medicine?”
This tweet highlighted one of the lesser-known issues faced by the cannabis industry — an antagonistic relationship with “Big Tech.” In addition to social media outlets like Facebook and Instagram (both owned by Zuckerberg’s Meta), cannabis-specific content has previously been aggressively (but inconsistently) suppressed by companies like Apple and Google. In the latter’s case, the search giant prohibits advertisements for “substances that alter mental state for the purpose of recreation or otherwise induce ‘highs,'” a frustrating restriction that has led to a cottage industry of marketers offering clever workarounds.
However, some of this was relaxed in 2021. For example, at last check the Facebook page for Belushi’s Farm is up, and in July Apple adjusted their App Store Review Policies to exempt “legal cannabis dispensaries” from their prohibition against apps that “[facilitate] the sale of controlled substances,” providing a streamlined mobile experience for delivery services like Leafly. While some companies continue to dig in their heels — Google has clarified that apps that “facilitate the sale or marijuana or marijuana products, regardless of legality” are not welcome in the Google Play store — the tide is clearly starting to turn.
A critical turning point for the cannabis industry
Notably, in 2021, one of the largest tech companies in the world, Amazon (ranked higher on the Fortune 500 list than Apple) made a series of bold moves in support of the cannabis industry. In June’s “Update on our vision to be Earth’s Best Employer and Earth’s Safest Place to Work,” the company made two significant announcements.
First, they adjusted their standard drug testing policy and “will no longer include marijuana in our comprehensive drug screening program for any positions not regulated by the Department of Transportation.”
Second, they expressed their support for the recently introduced Marijuana Opportunity Reinvestment and Expungement (MORE) Act. This legislation would “legalize marjuana at the federal level, expunge criminal records, and invest in impacted communities.”
Further, they expressed the “hope that other employers will join us, and that policymakers will act swiftly to pass the law”. They followed up in September with a letter to Senators Schumer, Wyden, and Booker, expressing their support for the Cannabis Administration and Opportunity Act (still in draft form).
Finally, they’ve put their money where their proverbial mouth is and have lobbied on Capitol Hill in support of federal marijuana reform. The company disclosed that some part of their $4.7 million lobbying spend in Q3 2021 was dedicated to “[issues] related to […] cannabis reform, including the MORE Act of 2021 (H.R. 3617) and the Cannabis Administration & Opportunity Act (draft form – no bill numbers).”
Why is this important?
It’s important to remember that Amazon doesn’t just sell tangible goods like laundry detergent and video games – it’s a technology company that, through their cloud computing platform Amazon Web Services, essentially runs a large chunk of the internet (as was highlighted during the recent AWS outage). Beyond that, Amazon’s portfolio is stuffed with significant assets in all areas of physical and ecommerce, from grocery store Whole Foods Market to streaming site Twitch and even the online pharmacy PillPack. Some of the more optimistic industry voices even suggest that the purchase of a virtual pharmacy is evidence that Amazon is laying the groundwork for selling marijuana online once cannabis is fully legalized at the federal level.
The role of reputation risk
Any company that provides banking compliance software for financial institutions banking the marijuana industry should be acutely aware of the role that reputation risk plays in the decision-making process that banks and credit unions must go through when making the decision to offer services to state-legal cannabis businesses. Some are concerned that they will lose business if the public finds out they’re a “weed bank,” but it is important to remind them that Amazon, like Apple, isn’t in the business of taking unnecessary risks. Clearly, they’ve evaluated the current conflict between state and federal law and made the decision that endorsing or accommodating cannabis on their platforms doesn’t pose enough of a reputation risk that they’re going to ignore the market opportunity provided by the growing legal marijuana industry.
Looking to the cannabis industry future
Long-standing concerns about potential consumer backlash, or even fears that the federal government might one day abruptly shift their hands-off approach to state-legal cannabis businesses and start shutting these programs down, become less likely when the largest companies in the world have some skin in the game. State-legal marijuana isn’t going away soon, and big tech’s embrace of the industry should provide financial institutions with evidence — and some reassurance — of that.
Source: Venture Beat