Nominee For US Attorney General Will Not Take Action Against State-Sanctioned Marijuana Industry

DISTRICT OF COLUMBIA: The Trump administration’s nominee for US Attorney General, William Barr, during Senate testimony on Tuesday affirmed that he would not use the power of the Justice Department to target marijuana-related activity in jurisdictions where the plant is legally regulated.

In response to a question posed by Democratic Sen. Cory Booker of New Jersey, Barr said, “My approach … would not be to upset the settled expectations and the reliant interests that have arisen as a result of the Cole memorandum.” The 2013 Cole memo, which was rescinded by former US Attorney General Jeff Sessions, directed prosecutors not to interfere with state legalization efforts and those licensed to engage in the plant’s production and sale, provided that such persons do not engage in marijuana sales to minors or divert the product to states that have not legalized its use, among other guidelines.

Although Barr said that he personally opposed the increasing divide between state and federal marijuana laws, he acknowledged that he will not “go after companies that have relied on the Cole memorandum.”

“It is encouraging that William Barr pledged not to enforce federal marijuana prohibition against the majority of US states that have reformed their laws. With this commitment, Congress has a clear mandate to take action and end the underlying policy of federal criminalization,” said NORML Political Director Justin Strekal.

William Barr is awaiting confirmation by the the Senate Judiciary Committee.


For more information, contact Justin Strekal, NORML Political Director, at (202) 483-5500.

US Attorney General Jeff Sessions Resigns

DISTRICT OF COLUMBIA: United States Attorney General Jeff Sessions on Wednesday announced his resignation from the Justice Department.

Sessions was a longstanding, vocal opponent of marijuana policy reform, who once opined, “Good people don’t smoke marijuana.” As Attorney General, his office rescinded the 2013 Cole memorandum which directed prosecutors not to interfere in state-sanctioned marijuana activity. However, that action encouraged numerous members from both parties to strongly criticize the office, and eventually led to the introduction of The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act of 2018 – bipartisan House and Senate legislation that seeks to protect jurisdictions that have legalized marijuana from federal intervention.

Sessions’ chief of staff Matt Whitaker will serve as acting Attorney General until a permanent appointment is confirmed.


For more information, contact Justin Strekal, NORML Political Director, at (202) 483-5500.

 

Oregon AG Rosenblum Statement On U.S. DOJ Rescinding Federal Marijuana Guidance

OREGON: Statement from Oregon Attorney General Ellen Rosenblum:

“Last year in Oregon, we collected over $60 million in state taxes as a result of our now legal marijuana industry. At the Oregon Department of Justice we will continue to make sure Oregon’s marijuana industry thrives under our carefully considered state regulatory requirements. The United States Attorney General Jeff Session’s decision today to rescind the Cole Memo, which has provided helpful guidance over the past five years to Oregon and other states that have legalized marijuana, is yet another example of this administration’s overreach. I value my working relationship with Oregon U.S. Attorney-nominee Bill Williams and I look forward to working with his office. States up and down the West Coast, and beyond, have spoken. This is an industry that Oregonians have chosen—and one I will do everything within my legal authority to protect.

Justice Department Issues Memo On Marijuana Enforcement

DISTRICT OF COLUMBIA:  The Department of Justice today issued a memo on federal marijuana enforcement policy announcing a return to the rule of law and the rescission of previous guidance documents. Since the passage of the Controlled Substances Act (CSA) in 1970, Congress has generally prohibited the cultivation, distribution, and possession of marijuana.

In the memorandum, Attorney General Jeff Sessions directs all U.S. Attorneys to enforce the laws enacted by Congress and to follow well-established principles when pursuing prosecutions related to marijuana activities. This return to the rule of law is also a return of trust and local control to federal prosecutors who know where and how to deploy Justice Department resources most effectively to reduce violent crime, stem the tide of the drug crisis, and dismantle criminal gangs.

“It is the mission of the Department of Justice to enforce the laws of the United States, and the previous issuance of guidance undermines the rule of law and the ability of our local, state, tribal, and federal law enforcement partners to carry out this mission,” said Attorney General Jeff Sessions. “Therefore, today’s memo on federal marijuana enforcement simply directs all U.S. Attorneys to use previously established prosecutorial principles that provide them all the necessary tools to disrupt criminal organizations, tackle the growing drug crisis, and thwart violent crime across our country.”

 

U.S. Attorney Bob Troyer Issues Statement Regarding Marijuana Prosecutions in Colorado

COLORADO:  U.S. Attorney Bob Troyer of the District of Colorado has issued the following statement regarding marijuana prosecutions:

“Today the Attorney General rescinded the Cole Memo on marijuana prosecutions, and directed that federal marijuana prosecution decisions be governed by the same principles that have long governed all of our prosecution decisions.  The United States Attorney’s Office in Colorado has already been guided by these principles in marijuana prosecutions — focusing in particular on identifying and prosecuting those who create the greatest safety threats to our communities around the state.  We will, consistent with the Attorney General’s latest guidance, continue to take this approach in all of our work with our law enforcement partners throughout Colorado.”

DOJ Task Force: Maintain ‘Hands Off’ Approach To States’ Marijuana Laws

DISTRICT OF COLUMBIA: A special Justice Department committee tasked with reviewing existing marijuana enforcement policies and making recommendations has failed to offer support for a federally led crackdown in legal marijuana states, according to documents obtained last week by the Associated Press.

The Task Force on Crime Reduction and Public Safety, a group consisting of federal prosecutors and members of law enforcement, did not call for changes in existing policy. Since 2013, the Justice Department has directed US attorneys in all 50 states not to interfere with state legalization efforts and those licensed to engage in the plant’s production and sale, provided that such persons do not engage in marijuana sales to minors or divert the product to states that have not legalized its use, among other guidelines.

The Justice Department and US Attorney General are not legally bound by the task force’s recommendations, which they have yet to release publicly.

 

What Would “Greater Enforcement” Mean for Washington’s Cannabis Businesses?

Justice Department has options to crack down, but may galvanize the push for even wider legalization

By Andy Aley

WASHINGTON: In statements that were perhaps inevitable but nonetheless surprising to the cannabis industry, White House Press Secretary Sean Spicer on February 23, 2017, provided the first official comments on how the Trump administration may address recreational marijuana.

Responding to a question from an Arkansas reporter regarding medical marijuana, Spicer indicated that the Trump administration sees “a big difference” between medical and recreational marijuana, stating that federal law needs to be followed “when it comes to recreational marijuana and other drugs of that nature.”

Spicer also indicated that enforcement decisions will primarily be a Department of Justice (“DOJ”) matter, stating that enforcement is “a question for the Department of Justice,” but that he believed there would be “greater enforcement of [federal law], because again, there’s a big difference between medical use, which Congress has, through an appropriations rider in 2014, made very clear what their intent was on how the Department of Justice would handle that issue,” which, Spicer stated, is “very different from the recreational use, which is something the Department of Justice will be further looking into.”

Although Spicer’s statements should probably not be considered as the Trump administration’s definitive policy statement on recreational marijuana use, they do raise a variety of concerns for cannabis businesses.

A New Direction for the Department of Justice

The August 29, 2013 DOJ Memorandum (the “Cole Memo”) is the closest thing the cannabis industry has to an official federal policy statement on DOJ’s enforcement of the Controlled Substances Act (“CSA”) in states that have legalized the possession, production, processing and sale of marijuana.

The Cole Memo is well-known throughout the cannabis industry, but to recap, it is essentially soft guidance to federal prosecutors regarding DOJ’s view on the appropriate allocation of federal resources regarding enforcement of the CSA.

The Cole Memo outlines eight general federal enforcement priorities related to marijuana in states in which it has been legalized, and notes that these enforcement priorities are less likely to be threatened in states with “strong and effective regulatory and enforcement systems to control the medical and commercial cultivation, distribution, sale, and possession of marijuana . . . .”  In these situations, the Cole Memo provides guidance to federal prosecutors that “enforcement of state law by state and local law enforcement and regulatory bodies should remain the primary means of addressing marijuana-related activity.”

The Cole Memo is, however, non-binding, and expressly states that it is “intended solely as a guide to the exercise of investigative and prosecutorial discretion” and does not provide “a legal defense to a violation of federal law, including any civil or criminal violation of the CSA.”  This means that DOJ is free to reverse course and begin enforcement actions related to CSA violations in states that have legalized marijuana.  The appointment and subsequent confirmation of Attorney General Jeff Sessions, who has been an outspoken critic of marijuana use, raised the possibility of a change within DOJ.

Spicer’s recent statements indicate that Attorney General Sessions would be free to pursue a policy change without interference from the White House.

Exactly what that change would look like remains uncertain, but keep in mind that despite state-level legalization, marijuana remains a Schedule I controlled substance under the CSA, and the federal government can seize, and seek the civil forfeiture of, real or personal property used to facilitate the sale of marijuana, as well as money or other proceeds derived from such sales.  In addition, there is potential risk of criminal investigation or prosecution for aiding and abetting violation of the CSA or for conspiring to violate the CSA.

DOJ’s best, and perhaps most likely to be used, enforcement actions are criminal prosecutions and civil forfeiture cases brought against individuals and businesses directly participating in the cannabis industry (producers, processors and retailers).  Those actions are simple to implement, as DOJ simply needs to allow Drug Enforcement Agency agents to conduct investigations of and/or raids on producers, processors and retailers, then tell federal prosecutors that they are free to seek the indictment of these individuals and businesses for violating federal law.

The Distinction Between Medical and Recreational Marijuana is Critical – For Now

Spicer’s statements also highlight the “big difference” between how the Trump administration views medical and recreational marijuana.  This view is reflected in federal law, which currently grants limited protection to medical marijuana users and, by implication producers, processors and retailers.  The “Rohrabacher-Farr Amendment”, which is a rider to the federal spending bill currently in effect, prohibits DOJ from spending funds to prevent states’ implementation of their medical marijuana laws.  In United States v. McIntosh,a 2016 case, the Ninth Circuit Court of Appeals held that this rider “prohibits DOJ from spending money on actions that prevent the [states listed in the rider from] giving practical effect to their state laws that authorize the use, distribution, possession or cultivation of medical marijuana.”

The Ninth Circuit rejected a broader argument that the rider prohibits DOJ from bringing federal charges against anyone licensed or authorized under a state medical marijuana law for activities occurring in that state, including situations where those activities do not fully comply with state law.  The court determined the rider “prohibits the federal government only from preventing the implementation of those specific rules of state law that authorize the use, distribution, possession, or cultivation of medical marijuana,” and that DOJ does not “prevent the implementation” of rules authorizing conduct when it prosecutes individuals who engage in conduct unauthorized under state medical marijuana laws.

Accordingly, prosecuting individuals who do not strictly comply with all state-law requirements applicable to medical marijuana remains permissible.  For cannabis businesses engaged in the production, processing or sale of medical marijuana, having robust policies and procedures in place to ensure compliance with state law is critically important.

Also notable is that the current federal spending bill expires on April 28, 2017.  If the current bill is not extended, or if this rider is not included in the next spending bill, this protection will be lost and all marijuana industry participants will be again exposed to the risk of federal criminal prosecution and civil forfeiture actions, in addition to other enforcement actions.

There is also ambiguity in states, such as Washington, with overlap between the medical and recreational laws.  In July 2016, Washington’s previously unregulated medical marijuana market was integrated into the regulated recreational marijuana market, with new laws taking effect that focused on creating a patient authorization database, a consultant certification program and a certification for “compliant products” for medical use.

Under Washington state law, participation in these medical marijuana programs is essentially voluntary.  Medical marijuana patients in Washington are not required to participate in the patient database, and producers and processors are not required to obtain “compliant product” certifications from the Washington State Department of Health.  Many producers and processors have not sought this certification due to the increased product testing and compliance costs, and many medical marijuana patients have refused to register for the patient authorization database due to privacy concerns.  Given the current landscape, however, cannabis businesses may want to reconsider their participation in state medical marijuana programs.

The Need for a Congressional Solution

Spicer’s comments should also serve as a reminder that the status quo – that is, DOJ’s discretionary decision to not enforce federal law against state-sanctioned marijuana activities – is not viable as a long-term solution for the industry.  Spicer’s statements are at odds with polling data on legalization of marijuana, with an October 2016 Gallup poll indicating that 60 percent of Americans support legalization, and a February 23, 2017 Quinnipiac University poll indicating that 71 percent of Americans (including majorities of both Democrats and Republican voters and in every age group) believe that the federal government should not enforce federal laws against marijuana in states that have legalized recreational or medical marijuana.

A renewed focus on federal enforcement is also certain to trigger resistance from states such as Washington, Colorado and Oregon that have seen positive economic benefits from marijuana regulation.  Since regulated sales began in Washington in 2014, the state has collected approximately $430M in additional tax revenue.  Fiscal year 2017 tax revenue in Washington alone is projected at $272M.  It is difficult to envision states willingly giving up this tax revenue while disregarding the will of their voters.

Indeed, earlier this month, amid uncertainty over the Trump administration’s approach to cannabis laws, Washington Attorney General Bob Ferguson and Governor Jay Inslee wrote to Attorney General Sessions asking that the guidance in the Cole Memo be maintained, and that any changes to the policy be coordinated closely with states that have established cannabis markets.  Ferguson has already responded to Spicer’s statements, stating in an interview that he intends to resist any efforts by the Trump administration to interfere with Washington’s regulated marijuana market.

Taking a “glass half-full” approach, Spicer’s statements could be what it takes to galvanize public support around re-scheduling or de-scheduling marijuana and to finding a viable long-term solution to the industry.  Industry participants and other stakeholders have an opportunity to use this potential shake-up to the status quo as an effective lobbying strategy in order to convince Congress that a well-regulated industry operating in the light with substantial state oversight is a better outcome, both economically and socially, than pushing it back toward an unregulated black market.

 Andy Aley is  co-chair of Garvey Schubert Barer’s cannabis practice

 

Federal Marijuana Protections Extended Through April

DISTRICT OF COLUMBIA: Members of Congress have re-authorized a federal provision prohibiting the Justice Department from interfering in state-authorized medical cannabis programs. The provision, known as the Rohrabacher-Farr amendment, was included in short-term spending legislation, House Resolution 2028, and will expire on April 28, 2017.

Initially enacted by Congress in 2014, the amendment maintains that federal funds cannot be used to prevent states from “implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana.” In August, the Ninth Circuit Court of Appeals unanimously ruled that the language bars the federal government from taking legal action against any individual involved in medical marijuana-related activity absent evidence that the defendant is in clear violation of state law.

Because the provision is included as part of a Congressional spending package and does not explicitly amend the US Controlled Substances Act, members must re-authorize the amendment annually. However, House leadership may prohibit federal lawmakers from revisiting the issue when they craft a longer-term funding bill this spring. Such a change in House rules would require members of the Senate to pass an equivalent version of the legislation, which would then need to be approved by House leaders in conference committee.

Former Deputy Attorney General James Cole Reflects Back On The Cole Memos

NEW YORK: Pot podcaster Cannabis Economy has released an in-depth interview with Former US Deputy Attorney General James M. Cole whose three memos reset Justice Department guidance regarding federal oversight of legal cannabis.  The conversation is Episode 140 on the Cannabis Economy podcast app on iTunes, Google Play or found through the iTunes Podcast App.

“You can’t prosecute every case involving a violation of federal statute that comes your way,” Cole said, explaining the rationale behind his so-called “Cole Memos.” which advocated for the Justice Department to focus on pursuing international drug cartels rather than cannabis producers in states that had legalized cannabis.

The burgeoning legal cannabis industry is an amalgam of agricultural, manufacturing, retail, medical and pharmaceutical businesses.   While medicinal marijuana has been legal in nearly half of the states in the US for years, recent ballot initiatives aim to legalize both medical and adult-use cannabis.  Many other ballot initiatives are just months away, this coming election day.  Canada has had federally legal medicinal cannabis for fifteen years and is on the precipice of federally legal adult-use cannabis.

Cannabis Economy’s host Seth Adler notes, “The Cole Memos are historic documents, specifically for legal cannabis and for commerce in general.  Jim Cole penned a three-part guidance for a nascent industry.  The guidance focuses explicitly on a working regulatory infrastructure within each legal cannabis state.  Responsible operators are working with state and provincial regulators to ensure compliance, no matter how difficult the task.”

He continues, and “no matter your opinion on Project Claudia- the Toronto dispensary raids from this past week- safe patient access to legal cannabis is paramount.”

Just hours after the Toronto dispensary raids; “Project Claudia,” Adler moderated a panel at the Lift Cannabis Expo with executives from Licensed Producers, Bedrocan and Supreme and the Executive Director of the Canadian Association of Medical Cannabis Dispensaries.  The panel is Episode 150, released today.

In Canada, unlike Vancouver and Victoria in British Columbia, Toronto does not have a regulatory framework for its dispensaries.  The federal regulatory framework- Marijuana for Medical Purposes Regulations (MMPR) does not account for dispensaries.  Thus the Toronto dispensaries are in a legal limbo, which isn’t necessarily grey.

So the Lift Cannabis Expo Roots panel had perfect timing recorded live last week just after the raids and available today.  The panelists discussed the impact of the very first Canadian Dispensary on the MMAR (Marijuana Medical Access Regulations) and subsequent MMPR.   The panelists also discussed the upcoming re-write of MMPR in August, and just what the regulatory framework will look like as Canada makes it’s way to legal adult-use cannabis next year.

How the Justice Department Seems To Have Misled Congress On Medical Marijuana

DISTRICT OF COLUMBIA: Last year, the Justice Department warned Congress that a medical marijuana provision in an appropriations bill could  “limit or possibly eliminate the Department’s ability to enforce federal law in recreational marijuana cases as well.” The “informal talking points,” according to a Justice Department memoobtained by Tom Angell, a legalization advocate and writer for marijuana.com, were “intended to discourage passage” of the provision, which was in fact passed and signed into law.

It turns out that the guidance was wrong. In the memo, written by the chief of the Department’s appellate section and dated Feb. 27 of this year, the Justice Department says the provision does not place “any limitations on our ability to investigate and prosecute crimes involving recreational marijuana.”