The Stigma of Pot Charity Is Fading
More nonprofits are welcoming contributions from cannabis businesses.
Illustration by rgbspace/iStock
In 2011, Berkeley Patients Group, the country’s oldest existing cannabis dispensary, tried to make a donation to the Susan G. Komen Foundation, the largest breast-cancer charity in the United States. “They wouldn’t take our money,” said Amanda Reiman, who was then BPG’s director of research. In fact, BPG and most other marijuana businesses for years had trouble finding any nonprofits that would take their money, thanks to the stigma attached to cannabis. Even just a few years ago, Oakland’s Bloom Farms had trouble signing up food banks to take part in the company’s one-for-one meal program, in which a meal is donated for every sale made. Finally, the San Francisco-Marin Food Bank came through. “We said, ‘we feed people, and we need money; we’d love to work with you,’” Mark Seelig, the food bank’s public relations manager, told this magazine a year ago. Other food banks then began joining in. But even at that point, cannabis companies that had big checks to pass out were having a hard time finding anyone to take them.
Times have changed, radically and quickly. The stigma is lifting. Berkeley Patients Group recently announced that it would be giving a total of $1 million to 10 nonprofits and charitable organizations over 10 years. Bloom Farms now lists nine food banks up and down California to which it donates meals, and it notes that it has given more than 2 million meals to date — about a million of those just in the past year. Flow Kana, where Reiman now works as vice president of community development, makes charitable giving a major part of its business. The company manages a corporate social responsibility program, like many Fortune 500 companies do, of which charitable giving is a major component. Recipients of its largesse include community-service organizations, environmental causes, and social-justice initiatives.
The experience with Komen was a revelation for BPG, and for Reiman. National charities have to deal with a lot of politics, as well as with the fact that cannabis is still illegal under federal law. Nonprofits that get a lot of federal funding are especially vulnerable. They might want to take donations from the cannabis industry, but not at the risk of losing federal dollars. Meanwhile, “many of them are stuck worrying about ostracizing donors and partners,” some of whom might have retrograde opinions on the subject, said Steve Steck, founder of Heroic Vice, which offers advice on charitable giving to companies in industries like porn, liquor, and, for now, cannabis, that are seen as problematic. On the national level, “A lot of charities just don’t want to be the early adapter,” he said, adding that more will come around as the stigma continues to lift.
“We learned that hyperlocal giving is actually a safer route,” Reiman said. It also works better in terms of corporate goals. In California, governments often require license applicants to prove that they’ll be good corporate citizens. Giving to local organizations looks a lot better on an application than giving to a national one might. Eden Enterprises takes a proactive approach: “We take meaningful action before we start operating,” said Shareef El-Sissi, CEO of Eden, which manufactures and distributes cannabis products in the Bay Area and runs a dispensary, The Garden of Eden, in Hayward. Proving a commitment to a local community before even applying for a license goes a long way with local officials, he said.
Like other cannabis executives, El-Sissi said legalization in California has had a huge impact on the acceptability of taking donations from cannabis companies. Where once it was a strain for him to find recipients, “now it’s actually really easy.”
But it’s not without its challenges. Those include not only the aforementioned problem with national charities, but also the persistent squeamishness of some people, even here in the Bay Area. El-Sissi notes that he once tried buy gym equipment for a local youth organization run by a county sheriff’s office and was turned down flat. “We had to work with an intermediary to get them the money,” he said. Rather than just buying the stuff, the company gave $80,000 to a larger charity, which in turn made the donation, stripped of Eden’s name. (He didn’t want to identify the players in this situation).
“I don’t like having to fight to have an impact,” El-Sissi said. “But I no longer have to.” He noted that he wouldn’t even bother trying to talk anyone into taking his money now, since there are so many organizations willing to take it. “Are there some holdouts out there?” he asks. “Yes. But for the most part, we’re now looked at as the good guys.”
Another challenge seems likely to be more persistent: the low profit margins of many cannabis businesses, which are squeezed further by the costs of heavy regulation and, especially, high taxes. Etienne Fontan, director of the Berkeley Patients Group, said he was recently asked why his company gave “only” $1 million over 10 years as part of its “$1 Million for Good” initiative. Leaving aside the lack of charity of the question itself, the answer is simple: “We would have given more if taxes weren’t so burdensome,” Fontan said. BPG’s total tax burden, including state and local levies, amounts to about 34 percent, he said. That’s much higher than what most non-cannabis businesses pay.
It seems likely that cannabis will retain some of its stigma for years to come, but the fact that the problem has dissipated so much so quickly is thanks to the fact that unlike, say, liquor and pornography, cannabis has medical benefits, some proven and some still under study. That explains why recipients of BPG’s donation, including the Women’s Cancer Resource Center and the Berkeley Humane Society, say the “stigma” issue didn’t even occur to them. Untold numbers of cancer patients have gotten relief from cannabis, and veterinarians are increasingly looking at CBD products (which contain a palliative component of the pot plant, but are non-intoxicating) as potentially helping household pets deal with various ailments, including pain. “We’re just grateful that the cannabis industry is so interested in doing such good,” said Morgan Pulleyblank, the Berkeley Humane Society’s director of development and communications. “It helps us save more lives."