WEED KILLER
Federal rules rollback may deter growth of Mass. pot industry
U.S. Attorney General Jeff Sessions’ decision to rescind legal guidelines for states that have legalized recreational marijuana may mean fewer pot shops opening in the Bay State as prospective business owners and investors opt to steer clear of an industry that’s suddenly enveloped in federal uncertainty.
“What it may do is slow down the flow of investment that’s required to fuel these new businesses coming online,” said Giadha Aguirre De Carcer, chief executive of marijuana analysis firm New Frontier Data. “This is a volatile moment.”
Recreational pot was expected to bring in between $44 million and $82 million in tax revenue, according to state officials, and New Frontier is predicting that Bay State residents will purchase $1 billion in marijuana products by 2020.
But De Carcer said those projections may change now that Sessions has rescinded Obamaera guidelines for prosecutors that make marijuana cases less of a priority in states that have legalized the drug. Still, it’s unclear what comes next.
“It’s rhetoric with the potential of impact. I would say it’s a one-two punch,” said Jim Borghesani of the Marijuana Policy Project. “The first punch is getting rid of the Cole Memorandum, which pretty much kept prosecutors out of state systems regarding legal cannabis — whether or not the second punch lands remains to be seen. That punch would be federal prosecutors actually taking action against legal businesses in states like California, Colorado and Massachusetts.”
Under the new policy, U.S. Attorneys will be allowed to decide if they want to make marijuana a priority. In a statement Thursday, Massachusetts U.S. Attorney Andrew Lelling didn’t tip his hand, saying his office would “pursue federal marijuana crimes” but would use discretion.
Yesterday, ratings agency Fitch said marijuana tax revenue could decrease if Sessions’ move prompts prosecutions. Either way, the change comes at an inopportune moment for Massachusetts. The first dispensaries are slated to open in July, and many people are still deciding whether they should get in on the industry.
“Not only are the people who are actually going to run these businesses deciding, but the people who are going to invest in this industry are deciding,” Borghesani said. “They depend on private capital, and if that private equity looks and says, ‘This is too risky because of the unknowns, because of Washington,’ that could hurt the establishment of a cannabis industry.”