Does the cannabis industry have a monopoly problem? – By Jenni Avins (Quartz) / July 5 2020
On June 24, US Department of Justice whistleblower John Elias testified that attorney general William Barr ordered investigations of 10 cannabis mergers in the 2019 fiscal year based on personal dislike of the industry. If that sounds like a lot, he said, it is. According to Elias’s testimony (pdf), those reviews accounted for 29% of the antitrust division’s full merger investigations during that period.
“These mergers involve companies with low market shares in a fragmented industry; they do not meet established criteria for antitrust investigations,” wrote Elias, whose job description includes prosecuting price-fixing schemes in the pharmaceutical industry. Elias claimed that his team prepared a memo for Barr explaining as much, but that Barr rejected the recommendation. “The rationale for doing so centered not on an antitrust analysis, but because he did not like the nature of their underlying business.”
Now, more than 30 members of Congress are backing a resolution to investigate and impeach Barr for abusing his power and misusing resources (pdf) based on Elias’s testimony.
While spending 29% of the antitrust division’s energy on a grudge against weed does seem unreasonable, it’s worth asking how unreasonable. After all, big money from venture capitalists, tobacco and alcohol conglomerates, and foreign investors has flooded the cannabis industry in recent years. The substance still isn’t federally legal in the US, but could the industry be at risk of a monopoly?
Continue to article: https://qz.com/1876862/why-are-antitrust-investigators-looking-into-cannabis-monopolies/
