Sessions comments and Possible Impact of Trump on Cannabis Industry

Friends,

Many people are concerned with the nomination of US Senator Jeff Sessions as the next US Attorney General and the impact of that nomination on the regulated marijuana industry. Mr. Sessions has provided written responses to marijuana questions from a number of senators. Highlights include:

• “While I am generally familiar with the Cole memorandum, I am not privy to any internal Department of Justice data regarding the effectiveness and value of the policies contained within that memorandum… I will certainly review and evaluate those policies, including the original justifications for the memorandum, as well as any relevant data and how circumstances may have changed or how they may change in the future.”
• “I will not commit to never enforcing Federal law. Whether an arrest and investigation of an individual who may be violating the law is appropriate is a determination made in individual cases based on the sometimes unique circumstances surrounding those cases, as well as the resources available at the time.”
• A recent federal court ruling that a Congressional rider prevents the Justice Department from going after people complying with state medical marijuana laws “is relatively recent, and I am not familiar with how other courts may have interpreted the relevant appropriations language or the Ninth Circuit’s opinion. As an emerging issue, that is one that will need to be closely evaluated in light of all relevant law and facts… I will conduct such a review. Of course, medical marijuana use is a small part of the growing commercial marijuana industry.”
• On “good people don’t smoke marijuana“: “My words have been grossly mischaracterized and taken out of context… I was discussing the value of treating people for using dangerous and illegal drugs like marijuana, and the context in which treatment is successful.”
• “I echo Attorney General Lynch’s comments [on marijuana being illegal], and commit, as she did, to enforcing federal law with respect to marijuana, although the exact balance of enforcement priorities is an ever-changing determination based on the circumstances and the resources available at the time.”
• “I will defer to the American Medical Association and the researchers at the National Institutes of Health and elsewhere about the medical effects of marijuana. Without having studied the relevant regulations in depth, I cannot say whether they may need to be eased in order to advance research; but, I will review this.”

These written responses continue a pattern of vague responses from Sessions on the future enforcement of federal marijuana law in light of states’ efforts to legalize it. One thing that is clear is that the next four years will likely be unpredictable in many ways. However, we believe it is highly unlikely the federal government will initiate a massive shut down of the industry. More likely, though not certain as well, is that the Justice Department may expand the list of 8 priorities set under the Obama administration by the Cole Memo. There is likely some “low hanging fruit” in the industry and the federal government may seek to make an example out of a few bad actors.

In addition to the Cole Memo, the other main source of protection for the cannabis industry has been a Congressional appropriations rider prohibiting the Department of Justice from enforcing federal marijuana law in states where those actors are complying with state medical marijuana laws. No such protections exist for adult-use marijuana businesses under this rider. This appropriations rider is set to expire at the end of April 2017, but it is important to remember that Congress remains largely the same under the Trump administration and Congress has passed that rider several years in a row. However, Speaker Paul Ryan amended the House rules so the House will no longer be able to pass this rider without going through the normal committee process. This may make passage of the appropriations rider protecting medical marijuana businesses more difficult to pass. Even without that amendment, the cannabis industry would still survive, but it would be more vulnerable.

At McAllister Garfield, PC, we have significant experience in dealing with the Department of Justice, including defending a dispensary owner in federal court on money laundering allegations and working with the Department of Justice on our Indian Law projects. Moreover, in the past, we have met with former US Attorneys for Colorado Troy Eid and John Walsh and now acting US Attorney Bob Troyer, and we have a strong sense of federal priorities and concerns given this work. We are continuing to monitor the Sessions nomination and confirmation process. We will keep you updated as there are new developments on the issues above.