Editor’s note: As the emerging U.S. cannabis industry may effect the alcohol industry, we occasionally crosspost content from our legal pot publication, Cannabis Regulator.
The future of America’s cannabis industry grew murkier last week when U.S. Attorney General Jeff Sessions rescinded an Obama-era policy towards marijuana.
Legal pot for years had operated in a grey space, federally. While technically illegal under U.S. law, cannabis companies had enjoyed the protection of the Cole Memo. Issued by former U.S. Deputy Attorney General James Cole in 2013, the memo effectively instructed federal prosecutors to remain hands off with legal cannabis in their states, so long as those markets appeared appropriately regulated by state officials.
Sessions, whose anti-pot stance cannot be understated, disseminated a new memo to federal prosecutors on Jan. 4. In part it read: “In deciding which marijuana activities to prosecute under these laws with the Department’s finite resources, prosecutors should follow the well-established principles that govern all federal prosecutions . . . Given the Department’s well-established general principles, previous nationwide guidance specific to marijuana enforcement is unnecessary and is rescinded, effective immediately.”
In other words, federal prosecutors no longer have directive to defer to state laws with legal cannabis. They are approved to crackdown — should they choose.
What does this mean for the legal cannabis industry? Overnight it went from quasi-protected status in the grey area of the Cole memo, to an industry that not only sells federally illegal products, but also now lacks protection from federal crackdown, despite state laws that legalize cannabis.
“This decision may very well lead to federal agents raiding licensed, regulated, and tax-paying businesses,” says Matthew Schweich, interim executive director for the Marijuana Policy Project, in a press release. “Attorney General Sessions has decided to use the power of the federal government to attack the ability of states to decide their own laws.”
Will the new memo motivate federal prosecutors to target cannabis companies in the near future?
The answer is: probably not.
After all, the Cole memo basically instructed federal prosecutors to remain hands-off — unless they observed threats to public safety. And while the Sessions memo does grant federal prosecutors the go-ahead to crack down on state-legalized cannabis, it reminds them of the “finite resources” of the Department of Justice, and directs them to “weigh all relevant considerations” before taking action.
Consequently, the discretion to prosecute remains with federal prosecutors — should they see anything that warrants action — as it more or less had within the (admittedly friendlier) parameters of the Cole memo.
For legal cannabis to survive and thrive under the Sessions memo, it must operate in a safe and secure way as it had under the Cole memo. So argues a statement released by the Colorado Department of Revenue’s Medical Enforcement Division in response to Sessions:
“Yesterday’s decision does not alter the strength of our resolve to keep marijuana out of the hands of children and criminals enterprises, prevent public health consequences associated with marijuana use, and prevent diversion to the illicit market. This is a renewed opportunity for the licensed community in our state to display the effectiveness of the commercial regulated system for tracking, testing and taxing marijuana that has made Colorado the worldwide regulatory and market leader.”
All this comes after a Gallup poll released last October showed that national support for legalized pot has reached 64%. “The trajectory of Americans’ views on marijuana is similar to that of their views on same-sex marriage over the past couple of decades,” the firm states in their poll. “On both issues, about a quarter supported legalization in the late 1990s, and today 64% favor each.”
Between growing national support and the increasingly important need for cannabis companies to act responsively, the future of the industry relies more so than ever on its ability to self-regulate in a manner than ensures the utmost protection of public safety. If companies do not give federal prosecutors significant reason to intervene, then the market should be able to remain intact — even with the heightened national threat of the Sessions memo.
Kyle Swartz is editor of Cannabis Regulator. Reach him at firstname.lastname@example.org or on Twitter at @kswartzz. Read his recent piece: What the Sweet Leaf Raids Mean For the Cannabis Industry