Cannabis boom continues despite corruption accusations
The Chicago tribune claims that Green Thumb Industries has been involved in bribery.
The marijuana industry is one of the few industries that has continued to grow amid the pandemic, and an alleged bribery investigation against a leading U.S. cannabis company did little to hurt sentiment The marijuana industry is one of the few industries that has continued to grow amid the pandemic; and in fact the majority of US cannabis operators have benefited greatly from it. And even reports of an alleged investigation into a cannabis company for bribery have harmed the sector for no more than a day. Earlier this week, the Chicago Tribune quoted unnamed sources as saying that federal investigators are investigating Illinois-based Green Thumb Industries, one of the largest marijuana operators in the country. The company's shares closed nearly 12% down Tuesday, while some others fell 5% each as the fear caught on. But the slump was short-lived, with stocks jumping back Wednesday, and Green Thumb closing more than 16% higher as New York legalized marijuana, making it 15th. The Chicago Tribune report claims that Green Thumb, which operates in 12 states and had $ 556 million in sales last year, may have illegally bribed powerful politicians to obtain cannabis licenses in Illinois and other states. "Investigators have been investigating campaign contributions and other steps Green Thumb Industries has taken to secure cultivation and distribution licenses in Illinois and several other states," the paper wrote. Over the years Green Thumb has hired numerous lobbyists and advisors, but it is common for large cannabis companies to contribute to political campaigns. Last year, cannabis companies spent a total of $ 5 million on legalization lobbyists. Still, that was far less than the alcohol and tobacco industry's lobbying spending, $ 27 million and $ 30 million, respectively. However, the Chicago Tribune found that the company had once hired Michael McClain, a longtime associate of former Illinois House Speaker Michael Madigan, who was recently charged with bribery. Last December, McClain and three others were indicted in a bribery scandal related to Illinois-based electricity company ComEd. As for Green Thumb, its founder and CEO Ben Kovler said they were unaware of an ongoing investigation. "These are baseless allegations that completely undermine the efforts Green Thumb has made since day one to legally develop our business ... We have not been subpoenaed or assets confiscated and we are actively reaching out to the authorities for action to deal with these allegations, "wrote Kovler. Fifteen States and Washington, D.C. have now legalized recreational marijuana for adults over the age of 21. Thirty-four states currently allow the medical use of marijuana, while 15 states have no laws that allow marijuana. A few other states were also preparing to legalize last year; however, the pandemic diverted attention from these efforts and made election campaigning impossible. Since the beginning of the pandemic, cannabis product sales have skyrocketed due to various closings and house arrest orders as the industry was classified as an "essential service". In the US, 68% of Americans are currently in favor of legalizing marijuana, a record high, while the legal cannabis industry market topped $ 13.5 billion in 2019 and hit $ 19.7 billion last year. In its new study, New Frontier Data predicts US cannabis sales will reach $ 35 billion by 2025. The biggest push so far came from the Senate Democrats, who announced last month that they would pass a sweeping law later this year that would lift the nationwide ban on marijuana.