Some Republicans are scrambling to get in on the ground floor of Michigan's budding marijuana industry just a few years after resisting it.
Lured by the promise of big profits, Republicans are becoming lobbyists, consultants, attorneys, and entrepreneurs in a new, emerging market that is expected to soon rake in more than $1 billion in annual sales.
"Marijuana is the new auto industry. You'd be crazy not to get involved," says Michelle Donovan, a conservative and attorney specializing in cannabis laws at Detroit-based Butzel Long.
Republicans' support for marijuana didn't happen overnight. But times have changed: There's money to be made now.
Take former state Rep. Mike Callton, a Nashville, Mich., Republican who's cashing in on recreational marijuana just months after he opposed the November ballot initiative that legalized it. The chiropractor now calls himself the state's "premier consultant" for legal marijuana and is encouraging municipalities to embrace the industry by opening their doors to cannabis shops and commercial growers.
"Yes, I'm a Republican, but this is what people wanted," Callton says, referring to the referendums that legalized medicinal marijuana in 2008 and recreational marijuana in 2018. "I work for voters; they don't work for me."
In addition to providing consulting services for local governments, Callton, who said he would never "touch" marijuana himself, helps businesses get approval from Lansing to operate medicinal dispensaries and grow operations.
Although he opposed the referendum to legalize recreational marijuana, he authored the bill that opened the door for medical cannabis dispensaries in 2016. Callton said he led the effort because the voters who overwhelmingly approved the 2008 ballot initiative to legalize medicinal marijuana wanted a convenient way to buy their medicine.
"People thought it was political suicide, but I believe in it," Callton says.
Arrested with a lot of pot
Former state Rep. Roy Schmidt, a Democrat-turned-Republican, not only became a supporter of the industry; he took advantage of it.
In June 2015, the longtime Grand Rapids politician was busted growing and possessing far more marijuana than the state's medicinal cannabis law allowed. Raids turned up 3 pounds of pot and 71 plants at two homes connected to him, and he was sentenced to 45 days in jail.
Then in September 2017, Schmidt was arrested on a charge of driving while under the influence of marijuana. He called the prosecution "a witch hunt" and an attack on marijuana users. A year later, a Kent County jury found him not guilty because prosecutors were unable to prove that the marijuana found in his system indicated that he was high while driving.
Since the trial, Schmidt has become an outspoken supporter of legal marijuana.
From bureaucrat to lobbyist
One of the most prominent and profitable roles Republicans are playing in the legalized market is lobbying.
Since Michigan is one of a few states that does not impose a "cooling off" period between public service and lobbying, conservative lawmakers, staffers, and bureaucrats are wasting no time using their inside experience and influence to help clients.
One of the most eyebrow-raising moves was in January, when in less than a month Republican Shelly Edgerton, appointed by Gov. Rick Snyder, went from running the state agency that oversees and regulates the marijuana industry to a top lobbying firm working on behalf of clients in the industry. Edgerton registered as a lobbyist and joined Dykema's prominent Cannabis Law team in Lansing, which pledges to help entrepreneurs and others in the pot industry with "administrative law and licensing," the key responsibilities of the Michigan Department of Licensing and Regulatory Affairs, where she was the director. Neither she nor the firm returned calls for comment.
Former state House Rep. Eileen Kowall, a White Lake Republican, also wasted no time becoming a lobbyist. Less than two months after term limits pushed her out of the Legislature, she registered as a lobbyist and signed a consulting contract with Michigan Green Technologies, a medical marijuana company, in February 2015. Kowall received $15,300 worth of shares from Cannabis Science, a Colorado-based company tied to Michigan Green Technologies, according to the U.S. Securities and Exchange Commission.
But SEC records show the shares were returned, and Kowall resigned her services because of a "conflict of interest" on Dec. 30, 2015.
At the same time, her husband, Senate Majority Floor Leader Mike Kowall, also a Republican, revived marijuana bills and shepherded them through the Legislature. John Dalaly, president of Michigan Green Technologies at the time, donated $400 to Sen. Kowall in November 2015.
Chiefs of staff embrace cannabis
The chiefs of staff for lawmakers who were key in advancing marijuana legislation left their Lansing jobs to join the marijuana industry. In November 2015, Brian Pierce quit as chief of staff to House Judiciary Chairman Rep. Klint Kesto, R-Commerce Township, and became a lobbyist for the now-defunct Michigan Responsibility Council, a medical marijuana association.
The spokesman for the Michigan Responsibility Council was Steve Linder, a Republican political consultant and fundraiser for the Senate Republican Caucus. In the Legislature, Kesto became a champion of the medical marijuana industry, sponsoring some of the bills, and collecting at least $13,900 in campaign contributions from cannabis interests between 2015 and 2016, according to campaign finance records.
Kesto's counterpart in the House, Rep. Rick Jones, R-Grand Ledge, received at least $16,750 from the medical marijuana industry and played a major role in advancing pro-cannabis legislation. Never mind that he led a failed effort in 2010 to ban "marjuana clubs," which were designed to make medical cannabis more readily available. Jones' chief of staff, Sandra McCormick, left to become the executive director of the Michigan Cannabis Development Association, which works on behalf of businesses seeking marijuana licenses.
Money to be made
Although Michigan voters legalized recreational marijuana in November, it's still illegal to buy. The Michigan Regulatory Agency, a new entity within LARA, will create the rules for recreational pot shops and commercial growers. By March 6, 2020, those dispensaries and commercial growers are expected to begin cropping up, and that means a "green rush" for those involved in the industry.
Recreational marijuana is expected to rake in $1.4 billion to $1.7 billion in annual sales in Michigan, according to projections from Marijuana Business Daily. That's good news for communities and schools because recreational marijuana sales will be taxed. According to an analysis from the nonpartisan Senate Fiscal Agency, cannabis sales could generate $287.9 million in tax revenue by 2023.
The state recommends that communities decide whether they want to allow dispensaries and commercial growers before December, when the state will begin taking applications from prospective ganjapreneurs.
Callton, the Republican who was opposed to the referendum legalizing recreational marijuana, is now encouraging communities to opt in and collect the tax dollars.
"There's no need for a Mexican cartel now," Callton says. "It's going to be a several-billion-dollar industry."
From our beginners guide to marijuana issue.
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