Earlier today, Attorney General Jeff Sessions issued a memorandum rescinding several Obama-era policies (notably outlined in the Cole Memo) regarding the possession, distribution, and cultivation of marijuana. Whereas the government has largely allowed states to decide how best to define and enforce their positions on cannabis, the Attorney General has now essentially green-lit prosecutors across the country to determine how to enforce federal drug laws regarding the substance, particularly alarming those in states that have moved to legalize.
We believe that further information is necessary to truly assess what impact, if any, this development may have on the industry. For now, our message is: Let’s not overreact.
Sessions saying that it is now up to individual AGs to determine how to handle cannabis, is not much different from the way things are being done now. The Cole Memo was simply a list of prosecutorial priorities. It never prevented the Justice Department from going after cannabis entities—it just stated that, unless certain things were happening (e.g., money laundering or sales to minors), the feds wouldn’t waste resources. Now that Justice is short-staffed and underfunded, it’s doubtful that there will be much movement on this front, except in, perhaps, more conservative jurisdictions. Moreover, the Cole Memo never addressed adult use, and Justice could technically have gone after that component of the industry at any time. The bipartisan Rohrabacher-Blaumenauer Amendment is still in effect, preventing federal funds to be used to shut down compliant, licensed medical facilities (although we still don’t know if the amendment will be part of the new spending bill; the events of today may make Congress more apt to include it).
While today’s news will not be particularly welcome to the countless numbers who benefit from legal marijuana, there is still much to be seen, and much more to be learned. We will continue monitoring the situation, and plan to provide a more in-depth analysis next week.