Reversal of Obama-era stance stirs pot industry
NEW YORK — The cannabis industry was rattled after White House spokesman Sean Spicer said Thursday that he expects the Department of Justice to increase enforcement of federal laws prohibiting recreational pot, even in states where it’s already legal.
Along with the District of Columbia, eight states have legalized recreational use among adults, including California, Maine, Massachusetts, and Nevada just this past November. That means one in five American adults can smoke, vape, drink, or eat cannabis as they please under state law.
Meanwhile, more than half of the nation’s states, including Arkansas, have legalized medical marijuana despite federal laws prohibiting its sale. The industry is estimated to be worth more than $ 6 billion and will hit $50 billion by 2026, according to Cowen & Co.
“Today’s news coming out of the administration regarding the adult use of cannabis is, of course, disappointing,” Derek Peterson, CEO of marijuana cultivator Terra Tech Corp., said Thursday in a statement. “We have hoped and still hope that the federal government will respect states’ rights in the same manner they have on several other issues.”
A crackdown on the industry would reverse existing federal policy. Former President Barack Obama’s administration largely deferred to the states. President Donald Trump has gone back and forth on the issue of legalization.
Some in the cannabis industry see the federal reversal as a contradiction of the administration’s stated positions on state’s rights and job creation.
“To have Mr. Spicer say in one sentence that they’re a state’s rights administration and in the very next sentence say they’re going to crack down … it just defies logic,” said Robert Capecchi, director of federal policies for the Marijuana Policy Project, an organization that lobbies for pot-friendly changes to drug-related legislation.
The industry is also an abundant source of revenue, according to Patrece Bryan, president of Cannabrand, a pot-focused marketing firm. New Frontier Data says the cannabis industry will create more than 283,000 jobs by 2020.
“This is absurd. For a president who ran under the banner of job creation, he actually needs to start looking at where the jobs are being created,” she said. “With Colorado generating $1.8 billion over a 10-month period, this is America’s new agriculture. Why would we take this revenue away from our country?”
The Drug Policy Alliance echoed Bryan’s point, noting that eliminating part of the legal cannabis market would mean “wiping out tax-paying jobs and eliminating billions of dollars in taxes.”
Still, not everyone was frantic about Spicer’s comments. The tacit endorsement of medical pot use was comforting, said Allen St. Pierre, a partner at Strategic Alternative Investments, which focuses on marijuana. Ian Eisenberg, founder of Seattle-based pot retailer Uncle Ike’s, was also sanguine.
“After the feds learn how well regulated Washington’s adult use and medical cannabis markets are, they will leave it status quo,” he said. Between July 2014 and April 2016, the state reportedly collected close to $200 million in tax revenue on cannabis.