Case Study

Read the case and then answer the questions at the end of the case (at least two or three good “solid” paragraphs per question in the case)

Marketing Medical Marijuana Legal and Ethical Issues

Bloomberg Businessweek reported in November of 2011 that 16 states in the United States allow some form of legalized medical marijuana. However, only Colorado allows medical marijuana clinics to operate as businesses. So Colorado is the fist, and so far the only, state to permit a for-profit medical marijuana marketplace. “Predictably,” as the business magazine stated, Colorado is now experiencing a marijuana “boom.” In 2000, when Colorado voters legalized marijuana for medical purposes with Amendment 20, and 2008, there were approximately 2000 medical marijuana cards issued to patients living in the state. By 2011, that number had increased to 127,000 people – all paying customers! Furthermore, there were 25,000 more people applying for medical marijuana cards as of the writing of the Bloomberg Businessweek article. Consequently, there are now many people, including out-of-state entrepreneurs, who want to start medical marijuana businesses in the state, who are convinced that they can make a great deal of money in this “green” business. In 2011, the magazine reported on a medical marijuana convention in Denver. One seminar stressed that aspiring medical marijuana entrepreneurs should practice a “little restraint” when they promote their businesses. One major problem is that selling marijuana is still illegal under federal law; and thus “green” entrepreneurs want to market their businesses but should not attract a lot of attention to them. That is the marketing medical marijuana paradox! Although described as a “business,” a medical marijuana business is certainly not a typical one. For example, financing is not available, and thus the “green” entrepreneur usually must be 100% self-financed. Nonetheless, Bloomberg Businessweek indicated that the customer base for medical marijuana is “undeniable,” as a 201 survey disclosed that 17.4 million people used marijuana. The challenge, therefore, for the “green” entrepreneur is to start and maintain a business in an increasingly competitive market where the product is on the national level, at least, illegal. Being insufficiently “vocal” in one’s medical marijuana advertising may result in business failure; yet being too strident or provocative in advertising one’s wares may bring the attention of the federal government, and consequently criminal prosecution. Nevertheless, one co-owner of a marketing firm stated in the magazine article that “green” entrepreneurs must go “all-out” and sell their product the same way that liquor companies sell beer or tobacco companies sell cigarettes. It is interesting to note that one survey indicated that 69% of medical marijuana cardholders are male; and thus the suggestion was made to use “sexy girls” in one’s advertising; otherwise, one marketing expert stated that a business would be handicapping itself. However, most medical marijuana businesses in Colorado are very reticent in their advertising and marketing and are hesitant about self-promotion. Television ads, billboards, and even websites are a rarity, Bloomberg Businessweek reported. The main source of advertising consists of ads in weekly “alternative” newspapers. Some medical marijuana clinics do have non-medical names, such as Daddy Fat Sacks and Mr. Stinkys; and in some papers there are supplements devoted to medical marijuana clinics. Some entrepreneurs have trendy and appealing names for their marijuana products, such as “mango salsa” and “apple butter.” There are also sidewalk sign-flippers, who are at times bikini-clad young ladies. Yet another marketing point of view advises that the businesses should move away from the sexy or black-market approaches, and instead have more of a pharmacy look and “feel.” One Colorado government regulator stated that he would like to see a requirement that a person be of “good moral character” before being granted a license to operate a marijuana dispensary. Accordingly, a person who had not paid his or her taxes, or who was behind in child support payments, would be denied a license. Yet, in essence, the medical marijuana business is, as described by a Colorado district attorney, an inherently risky business since at time the federal government can exercise its jurisdiction and declare the business and its principals illegal. Actually, in California, there was a federal “crackdown” and several businesses were closed. The fear is that the more the medical marijuana business is motivated by money and not, as initially, by compassion, the more the “green” business will attract the attention of federal prosecutors. But one point is very clear, and that is when it comes to marijuana there is a LOT of money to be made!!!

Bibliography Etc., “Medical Marijuana,” Bloomberg Businessweek, November 21-November 27, pp. 98-99.

Questions for Discussion

1. Discuss some of the legal issues involved in the medical marijuana business and how they should be resolved.

2. How would you advise an ethically egoistic medical marijuana entrepreneur when it comes to the advertising and marketing of his or her business? Why?

3. Is medical marijuana moral based on Utilitarian ethics? Why or why not?

4. Is medical marijuana moral based on Kantian ethics? Why or why not?

5. Should being of “good moral character” be a requirement for a medical marijuana license? Why or why not?

6. What should a “socially responsible” medical marijuana business be doing for the local community and for society as a whole?