Crackdown talk threatens pot markets
California prepares to fight federal action targeting state’s recreational weed business
The Trump administration on Thursday indicated a new appetite for enforcing federal marijuana laws — a move that might destabilize California’s fledgling legal-marijuana industry, although the impact is less certain on residents hoping to consume or grow cannabis without worrying about getting arrested.
In a memo sent to U. S. attorneys, U.S. Attorney General Jeff Sessions swept aside an advisory issued by the Obama administration that largely suspended enforcement by the Justice Department and helped propel the pot sector’s rapid growth.
This means the marijuana plants in your backyard, as well as your local dispensary, are suddenly vulnerable.
But experts say whether you’re prosecuted will largely depend on where you live, because Sessions said Thursday he’ll leave that decision up to each of the country’s 93 U.S. attorneys. And local police have no obligation to cooperate with federal prosecutors.
“If this is a priority, they can pursue it. Theoretically, the raids on dispensaries could resume,” said UC Hastings College of the Law professor Ha-
dar Aviram, president of the Western Society of Criminology. “But we don’t have to do their dirty work for them.”
In California, where the 2016 passage of Proposition 64 began moving a shadowy multibillion- dollar industry into a taxed and highly regulated structure, prosecution could be left largely up to the state’s four U.S. attorneys.
That approach could lead to vastly different enforcement within the state, said Marsha Cohen, another law professor at UC Hastings, calling it “the marijuana mess.”
The Bay Area doesn’t even have a U. S. attorney, creating even more uncertainty. The U. S. attorney for the Northern District of California, Brian Stretch, announced his departure this week, just several days before his last day on Saturday. His replacement has not been announced.
The news from the nation’s capital sent a chill through an industry that generated $8 billion in sales last year and is expected to grow to $23 billion nationally by 2020.
“It sends amessage to investors that this is a risky business and you ought to stay out of it,” said Robert J. MacCoun, a professor at Stanford Law School.
It also is likely to boost apprehension among the U. S. banks and credit unions that were considering jumping into the fast- growing niche. Currently cannabis is a cashonly business because federal laws prohibit banking activity with illegal businesses.
And for the 42 states that haven’t yet legalized cannabis, “it sends amessage that ‘you might not want to take this on,’ ” MacCoun said.
California’s state Bureau of Cannabis Control — which has approved hundreds of licenses for businesses seeking to legally grow, transport and sell marijuana — on Thursday vowed to continue issuing permits.
Dispensaries like Harborside, with locations in Oakland and San Jose, also said it was business as usual.
“There will be no change to the operations,” said Harborside founder Steve DeAngelo. “Every day, I instruct my employees to scrupulously observe California’s laws and regulations regarding cannabis. We did that yesterday, we are doing that today, and we will continue to do it tomorrow and well into the future.”
Lt. Gov. Gavin Newsom, the front-runner in this year’s governor’s race, accused Sessions of “trampling on the will of California voters.”
California, he said, “will stand together to pursue all legal, legislative and political options to protect its reforms and its rights as a state,” as it has on climate, environmental and immigration issues.
Californians voted to legalizemedicalmarijuana in 1996 and recreationalmarijuana in 2016.
Sales of recreationalmarijuana took effect on New Year’s Day, creating the largest legal pot market in the country. Hundreds of businesses have received temporary licenses from the state.
The state had taken comfort in the Obama era’s socalled Cole Memo, written in 2013 by Deputy Attorney General James M. Cole. It basically asserted thatmarijuana businesses needn’t worry about federal prosecution as long as they complied with state laws.
The four- page memo, granting federal attorneys a great degree of prosecutorial discretion as to how to deploy their crime-fighting resources, has been a critical document in the growth of the legal marijuana industry.
Sessions said prosecutors should use their own discretion, taking into consideration the department’s limited resources, the seriousness of the crime and the deterrent effect that they could impose.
“Will there be four different policies in California? Will Fresno beOKwith marijuana but you get arrested in San Francisco?” asked Hastings professor Cohen. “It seems totally unfair for the criminal justice system to be unclear.
“They have left a lot of this stuff alone for an extremely long time. It just wasn’t worth it,” Cohen said. “All these prosecutors are already awfully busy. They have no shortage of cases.”
But it takes more than a memo to win a conviction in court, especially if most people support its use, Co- hen said. “Juries might say: ‘Are you kidding?’ ”
Trump’s position on the issue is unclear, but he seems to favor the medical use of marijuana, but not the recreational use.
In February 2016, as a presidential candidate, Trump told Fox News: “By the way — medical marijuana, medical? I’min favor of it a hundred percent.” At the 2016 Conservative Political Action Conference, Trump seemed critical of recreational marijuana in Colorado, saying, “I think it’s bad. Medical marijuana is another thing.”
One thing is clear: The cannabis industry is already woven into the commercial fabric of the state. There are already cannabis lobbyists roaming the halls of the state Capitol, and Silicon Valley’s venture capital firms have invested in the industry’s growth.
“It is a battle they could take on,” Stanford’s MacCoun said, “but it is not a battle that they could easily win — and it could be very costly.”