Peter Thiel, Hulk Hogan v. Gawker, and the Cannabis Industry at a Crossroads

Late last month, Forbes published an exposé, “This Silicon Valley Billionaire Has Secretly Been Funding Hulk Hogan’s Lawsuits Against Gawker.” For those unfamiliar with the situation, Gawker – a website that frequently skewers celebrities, politicians, and other public figures, in addition to sometimes breaking serious news –  in 2012 published a sex tape of Terry Bollea, better known as the professional wrestler Hulk Hogan. Hogan subsequently sued Gawker for invasion of privacy and in March of this year was awarded $140 million in damages by a Florida jury. Even prior to the current fracas around the case generated by the Forbes article, it was discussed as one with potentially wide-ranging ramifications for journalism and free speech. This article in the New Yorker is a thoughtful rumination on such issues.

The Forbes article revealed that Peter Thiel, famously a co-founder of Paypal and the first outside investor in Facebook, where he still holds a board seat, had clandestinely been providing financial support to fund the case to the tune of about $10 million, according to the billionaire himself. Thiel’s motivations were not due to a particular affection or connection to Bollea. The prevailing story is that Thiel had borne a grudge against Gawker since 2007, when the site supposedly outed him in an article. Worth noting, however, is that a sister site, Valleywag, was devoted to critical coverage of Silicon Valley generally, including some of Thiel’s odd ideas and less-successful ventures. Additionally, Gizmodo, another sister site to Gawker, recently called out bias in Facebook’s “Trending Stories” feature, prompting a Congressional investigation into the social network. This recent Gawker post contains links to some of the above-referenced stories that could conceivably have drawn Thiel’s ire.

In the interests of a modicum of impartiality, I do agree that some of Gawker’s practices – namely, making public the sex lives of various individuals – can be quite objectionable. As for Thiel; well, each individual can judge for themselves where they stand on his views and actions since he came into the public eye nearly 20 years ago. (Note: He’s a Trump supporter.)

What is to my mind beyond a reasonable doubt is that Thiel’s actions have no place in an open, free, and genuinely democratic society. For an individual of extraordinary means to attempt to secretly bankrupt a news organization by proxy because he finds its output to be personally or professionally disagreeable is utterly reprehensible. Such actions – if adopted by others and taken to their logical conclusion – amount essentially to plutocratic control over what news and information is available to the public. Such a situation undermines the ability of citizens to make intelligent, well-informed choices that are in their best interests, rather than in the interests of those controlling the flow of information.

The most recent analogue that I can think of in this country is Sheldon Adelson’s purchase of the Las Vegas Review-Journal, which he also attempted to keep secret; a deal that many believe was pursued specifically so that Adelson could have an outsized influence on the upcoming presidential election, as well as Nevada’s ballot initiative to legalize cannabis for adult use, to which he is opposed. Notably, the Review-Journal this week published an editorial arguing against the state’s legalization initiative, although previous editorials prior to the purchase of the paper by Adelson expressed support for legal cannabis.

When compared to the above situation, however, Thiel’s actions are much more insidious and potentially wide-ranging. Adelson only bought one newspaper; Thiel, if successful, could have a chilling effect on journalism in this country as a whole. If Gawker’s coverage of Thiel did in fact rise to the level of libel, then Thiel should have sued them outright himself. In his only words on the matter thus far, Thiel told the New York Times that he viewed his actions as “one of the greatest philanthropic things I’ve done” and that he did not believe attacking Gawker endangered other journalists or freedom of speech generally. I find these statements disingenuous at best and even hilarious in the darkest possible way. Also, I am not particularly comfortable with billionaires – or any one individual – deciding what may or may not constitute proper journalism and free speech for the rest of us.

I will leave the matter of Thiel, Hulk Hogan, and Gawker aside for the moment; many words have been written concerning it and I don’t know that I have much more to contribute to the general discourse that has not been said already. I will turn instead to the implications of Thiel’s actions for the cannabis industry, in addition to commenting on what I feel is the industry’s unhealthy aping of very questionable Silicon Valley models and “ideals” that are embodied in many of Thiel’s ventures, and analogous ones. In sum, I feel that the cannabis industry is now at a crossroads. Do we want the industry to move toward some sort of truly new model focused on mutual benefit and social good, or instead simply fall into the patterns of unchecked, irresponsible capitalism, in which few benefit and most get the proverbial shaft?

First, the direct implications: Thiel, via the venture capital firm Founders Fund, which he heads, is a large investor in Privateer Holdings. Privateer owns the Canadian medical cultivation operation Tilray, the Marley Natural brand, and, most importantly to this discussion, the cannabis news and information site Leafly.

Leafly has built itself into a go-to site for information on various cannabis varieties and products, and has in the past year vastly expanded and enhanced their news coverage. However, given Thiel’s apparent desire that journalism and speech heel to his personal preferences and business dealings, how are we to know what, if any, influence his financial backing of Leafly may exert on its content and commentary? And as Hilary Bricken points out in a talk I posted here recently, an advertisement for the Marley Natural line of cannabis products eschews facts, data, and potential product risks in favor of painting a hazy picture generally aligned with the positive notions people associate with Bob Marley.

Granted, that is what advertisements do. However – and I am not the first to suggest this – the cannabis industry must be extremely careful not to go the way of tobacco and fossil fuel industries. As we all know now, the tobacco companies were aware of the risks and damaging health effects of smoking, but hid them from the public by exerting financial and political influence. The result, when people eventually caught on, was a multi-billion dollar lawsuit, stricter regulations, and a general backlash against tobacco use from which the industry has never recovered. Similarly, fossil fuel companies are now being revealed to have known about climate change, while simultaneously trying to bury scientific findings that would have potentially put a crimp in their revenues, obfuscation that has serious implications for the future of our entire planet.

Based on Thiel’s actions in regard to Gawker, it is not unreasonable to imagine that he would be amenable to wielding his money and influence to obscure findings – such as, hypothetically, yet-to-be discovered potential health risks of cannabis use – that might hurt his investments financially. To be perfectly clear, I am not claiming that Thiel is pulling any strings at Leafly currently. However, to take money from someone is to become beholden to them to some extent; a return is expected, of course, and that is where the danger for cannabis may ultimately lie.

We in the cannabis industry are perhaps on more uncertain ground than we may think, a claim that I attribute to our overall lack of knowledge about the full effects of the plant and products derived therefrom. The acute toxicity of cannabis is clearly less than other legal substances, that is beyond question. However, we simply do not know the long-term effects of regular cannabis use, particularly in the various forms, potencies, and products that are now being developed in legal markets.

For the sake of all that partake in cannabis, especially those that are truly deriving medical relief from the plant, I hope that any potential detrimental effects are revealed to be negligible. However, it is also hard for me to believe that any substance is entirely benign; even quotidian consumables such as caffeine, sugar, and ibuprofen can take a negative physical toll when used excessively. The commercialization of any product is not aimed at promoting moderate or cautious use, but strives to sell as much as possible. As such, we must openly acknowledge, address, and adjust responsibly to any potential negative findings that are discovered as cannabis and related public health research advances, rather than sweeping them under the rug in the pursuit of profits.

Unfortunately, we have already seen the industry place profits over potential threats to public health in the form of cannabis industry groups working to prevent the implementation of pesticide regulation in Colorado. As larger, more influential players enter the industry, they bring with them the financial and political clout to perform similarly detrimental lobbying, and to greater effect. We must not let that happen and instead remain committed to openness and transparency. After all, to go the way of the tobacco industry as noted above would simply be the flip side of the misinformation and suppression of knowledge around the plant that cannabis advocates have been fighting against for decades.

Thiel’s involvement in cannabis via investment also points to recent trends in the industry with which I have become deeply uncomfortable. Namely, the adoption of the models and “ideals” of Silicon Valley businesses, in addition to the explicit entrance into the cannabis space of investors and companies that have sprung from the tech boom. The ubiquity in cannabis of the startup model pioneered by Silicon Valley companies is understandable; this is after all a novel industry in which it has been historically difficult to obtain traditional funding for new businesses. However, we now also have startup accelerators, virtual entrepreneur summits, “Uber for weed,” “Airbnb for weed,” “Instagram for weed;” you get the idea. Furthermore, as most readers well know, Facebook billionaire Sean Parker – a Thiel associate and former partner in the Founders Fund – is the primary financial backer of the legalization initiative to be voted on in November by Californians.

At first glance, the Silicon Valley ideal of “disruption” may seem to go  hand-in-hand with cannabis, which is a new industry that is establishing itself and growing rapidly in spite of its federal illegality. However, I argue that it is a dangerous and damaging approach for cannabis, as well as society generally. To begin with the latter point, when boiling down the business models of “disruptive” startups such as Uber and Airbnb, to simply take two of the most prominent examples, I find it hard to come to any other conclusion that, at its most basic, disruption equates to the simple skirting of existing laws and regulations. Of course Uber is cheaper than taxis; the company does not classify its employees as employees, it does not gain local permits or licenses required of other commercial taxi services, and it does not maintain the same level of safety assurances required of traditional companies. Additionally, it requires its employees – apologies, I meant independent contractors – to spend their own capital to acquire and maintain the vehicles that are central to the company’s operations. Many, if not all, of the same points could be made about Airbnb. A recent speech made by Elizabeth Warren concerning the dangers to workers posed by the “gig economy” lays out many of the above points, and others, in more detail.

Somewhat ironically, while some in the cannabis space valorize and seek to emulate such models, owners of licensed cannabis businesses in legal states are also facing competition from similar, “disruptive” operations in the form of illegal delivery services, as well as unlicensed dispensaries and cultivators. In almost every legal state, the “disruptive” black market – which manages to avoid taxes, licensing fees, and other regulatory costs (does that sound familiar?) – competes unfairly with and undercuts those operators that are working to play by the rules and maintain compliance. Most that are attempting to bring cannabis into full legality and legitimacy agree that maintaining compliant, responsible businesses is key to that effort, as it demonstrates to detractors that cannabis growers, processors, and retail or dispensary operators are not simply a new version of corner drug dealers or cartels.

The disdain for laws, regulations, and fair competition displayed by many of the startups that are the darlings of Silicon Valley is a dangerous attitude for cannabis business owners to attempt to emulate. It could put their business on uncertain legal footing in an already precarious field, as well as discrediting the industry overall. The recent example of SpeedWeed, a Los Angeles-area delivery service, is illustrative in this context. More fundamentally, tailoring government and regulatory systems to accommodate consumer choice is not democracy, as such startups sometimes claim. Note that the consumers making the choices and driving such policy changes are generally relatively affluent; after all, one needs to own a smartphone and have places to go (often for the purposes of leisure) to use the apps under discussion.

Still, “progress” barrels on. This despite the erosion by Uber’s model of the idea of “employee” and any protections that notion may have had formerly, or the blows that Airbnb is dealing to the availability of affordable housing. Do we truly want the cannabis industry to do the same; to place financial valuations over the goal of truly contributing  something to society that could possibly make it better for all? For me, the answer is no. I am drawn to this industry because it provokes questions and makes one rethink the underlying assumptions buttressing traditional, monolithic social structures as they exist currently. It has forced me to investigate and contemplate more closely the systems of agriculture and medicine in this country, in addition to business and economics generally. Again, the notion of “disruption” could be called to mind by the previous two sentences and, as much as I loath buzzwords and business-speak, it would perhaps not be inappropriate. However, here we confront the crossroads. I am not against the idea of disruption, but would like it to be done in a manner that is measured, responsible, and results in broader social benefit than is now occurring with the “sharing economy,” which has also been dubbed the “sharing the scraps economy” by Robert Reich.

So what is to be done? For my part, I will no longer visit Leafly. I will not ever purchase a Marley Natural product. I will not support any companies backed by Thiel or any other similar plutocrats. If I were a California resident, I would be extremely suspicious of why Sean Parker is at this moment, right as the cannabis industry is on the verge of booming financially, so motivated to see legalization come to fruition. I would not vote for any legalization initiative that does not allow home growing or include widespread decriminalization of simple possession. I would grow my own, legal or not, by planting a seed in the soil and watching the resulting sprout reach for the sun. A little non-violent civil disobedience is a good thing. It’s just a plant, after all, and plants are fun to grow, an enriching lesson I learned from working in cannabis. I will give what I grow away to friends freely, even though I could use a few extra bucks. I will give priority to quality and craft rather than branding and hype. For businesses in the cannabis space, we need to be extremely wary of who we take funding from; Uber again provides a cautionary tale, having recently taken $3.5 billion from the investment arm of the Saudi Arabian government. For some reason, I have doubts that the funds, which secured a board seat for one Saudi elite, will do much to improve the company’s ideas concerning social justice and responsibility.

In this day and age, it frequently feels as if any efforts to resist the whims of the monied classes are futile. However, the legal cannabis movement sprung from doing just that. Numerous established, powerful interests – from prisons to paper – have reason to want the cannabis industry suppressed, yet here we are; the industry is booming despite all the restrictions placed upon it, and seems to be gathering steam every day. Though early on in this essay I posed our current moment as a crossroads for cannabis, it is a near certainty that it will eventually be produced, processed, and traded like any other commodity. And ultimately, that is not the end of the world or even necessarily reason to lament. Still, though, we don’t have to happily participate in the race to the bottom that is our country’s current version of capitalism. Instead of “move fast, break things” – an original motto of Facebook made famous by Justin Timberlake-as-Sean Parker in the film, The Social Network  – let’s slow down and build things. Let’s step back and examine what we truly would like to construct around cannabis and work humbly, diligently, and responsibly toward that goal. Let’s deal with people that want to do more than make a(nother) buck. And once we do build it up, let’s not simply sell it off to some asshole like Thiel.

Update (6.10.16 @ 4:10 pm): Gawker has filed for bankruptcy due to the Hulk Hogan lawsuit.

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