The largest pension fund in the United States decided they won’t invest in tobacco but they have no problem with cannabis.
Back in 2000, the California Public Employees’ Retirement System (Calpers) sold all of its positions in tobacco stocks and enacted a ban on future investments in tobacco-related companies. According Calpers spokeswoman Megan White, “concerns over ongoing litigation and regulatory risks facing the tobacco industry prompted the Investment Committee to divest.”
However, their third-quarter filing shows that they have a small hold in Tilray stock. Tilray is a Canadian pharmaceutical company known as one of the leading medical cannabis producers in the world. When asked why Calpers would rather invest in cannabis stock than tobacco, White replied, “The board does not make decisions about buying stocks. The investment office has delegated authority.”
In December 2016, staff at Calpers suggested lifting the ban on tobacco investments, despite acknowledging the many negative societal implications of tobacco, primarily related to health and medical costs. Jim Currie, Executive Director of the Commissioned Officers Association of the U.S. Public Health Service had this to say about their proposal:
“I hope that you will not do this (end the ban) for two reasons: (1) you will not gain investment income by providing financial support to entities that are killing hundreds of thousands of people a year with their products, and (2) you have such a presence in the world of investment that your decision might well trigger a stampede in that direction.”
Additionally, a letter from the American Heart Association and the American Lung Association of California actually recommended that Calpers expand the restrictions. “Investing in tobacco would pit Calpers’s portfolio against the financial and physical well-being of its members and the rest of California,” the groups said. “We also urge Calpers to take this opportunity to close the loophole in its policy which currently exempts third-party fund managers from divestment requirements.”
Advocates of the tobacco ban aren’t pushing the company to cut ties with cannabis companies. “We have not considered marijuana at this time,” Currie said in an email, “ A spokeswoman for the American Cancer Society Cancer Action Network also commented that it “has not taken a position on [Calpers’] investment in marijuana stocks.
In any case, Tilray isn’t the fund’s only cannabis-related deal. Calpers also owns shares of Constellation Brands, who has a 38% stake in Canopy Growth, and they also own 37,100 American depositary receipts of GW Pharmaceuticals, a U.K developer of cannabis-based prescription medications such as Epidiolex.