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How will Gavin Newsom Handle Big Cannabis?

Jason Kinney, center, greets state officials and staffers near the state Capitol in Sacramento on the first day of the 2019 legislative session. PHOTO FOR CALMATTERS BY BYRHONDA LYONS

Gov.-elect Gavin Newsom’s new senior adviser, Jason Kinney, is a former lobbyist with deep ties to the cannabis industry. Who is he really serving?

The week Gavin Newsom was elected governor, three Sacramento lobbyists quit an influential firm where they had been partners for many years. Two filed paperwork to launch a new lobbying shop. The third, Jason Kinney, de-registered as a lobbyist and immediately became a key member of Newsom’s gubernatorial transition team.

The next week, Kinney, billed as Newsom’s senior adviser, shared the stage with three state regulators at a huge cannabis conference in Las Vegas. The event was sponsored by Axiom Advisors, the new lobbying firm Kinney’s former partners had just launched, and WeedMaps, a marijuana advertising website that was a client at their prior lobbying firm and is now represented by Axiom. The Axiom logo shone on a screen above the stage.

And when Kinney introduced himself to the roomful of marijuana entrepreneurs, he quickly mentioned Kevin Schmidt—his former partner now lobbying at the new firm.

“Right after the passage of decriminalization and legalization in Colorado and Washington, then-Lt. Gov. Gavin Newsom walked into an office and said to a bunch of us—(including) Kevin Schmidt, who was working in the lieutenant governor’s office at the time, who is here in this audience—he walked in and said, ‘California is going to be next,’” Kinney recounted, “’And we are going to do it.’”

They did do it. Now Kinney, who worked with Newsom to pass the marijuana legalization ballot measure in 2016 and currently serves on the governor-elect’s transition team as an unpaid adviser, is poised to cash in on a nascent industry that is expected to become a $5.1 billion enterprise in California in 2019.

It would be one more step through the revolving door for Kinney, who has made a lucrative and powerful career in Sacramento by moving from government to campaigns to industry lobbyist.

This time, the question is whether he is working for an incoming administration that he will soon seek to influence.

“Who is he really serving?” asked Jessica Levinson, a professor at Loyola Law School and former president of the Los Angeles Ethics commission. “Is he a hired gun for the marijuana industry? Is he a public servant working on a gubernatorial transition? The answer very likely is all of the above.

Kinney told CALmatters that his appearance at the pot industry conference “was routine, appropriate and not in conflict with my work on the transition.” He added that he has “made no decisions about my professional future beyond January 7th,” when Newsom is sworn in.

Schmidt said that as far as he knows, Kinney is focused on the transition and hasn’t decided what will come next. Neither of them ruled out the possibility that Kinney could join Axiom.

Nathan Click, a Newsom spokesman, said the governor-elect has imposed a “lobbying ban,” and that “those working on the transition have agreed to not lobby transition staff, as defined under the Political Reform Act.” The Act refers only to people who are paid more than $2,000 a month, or spend more than a third of their time, trying to influence government decisions. And the ban ends the day Newsom becomes governor.

Newsom told CALmatters that Kinney’s role in the transition is informal, taking calls from people who want to connect with the governor-elect and recommending potential job candidates. When asked about their relationship, Newsom said he would draw the line between business and friendship.

“I always separate,” Newsom said. “I have 20-plus years of separating those kinds of things.”

Until early November, Kinney and Schmidt were lobbyists for a high-powered firm called California Strategies. Kinney—a longtime political adviser to Newsom—also was the communications director for Proposition 64, the 2016 marijuana initiative Newsom championed.

Since it passed, California Strategies has reaped more than $1 million from cannabis clients—investment companies, tech platforms and growers seeking to influence the rules for the state’s marijuana marketplace. The lobbying firm’s cannabis clients donated at least $188,000 to Newsom’s campaign, a chunk of the more than $500,000 he raised from marijuana businesses overall.

Like any big-money industry, cannabis businesses are lobbying for laws and regulations to help them succeed. The next governor could shape the potentially lucrative marketplace based on who he appoints to oversee regulations, or whether he signs laws to, for example, decrease taxes on marijuana or create a cannabis-friendly state bank as an alternative for what is now an all-cash industry. Rules nearing final approval already are generating complaints from small farms and cities that they favor large growers and cannabis delivery companies.

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Published: January 02, 2019

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