In a not-at-all shocking move, Attorney General Jeff Sessions on Thursday rescinded the Cole Memo, a list of Department of Justice enforcement priorities that has been the tenuous legal foundation for the burgeoning cannabis industry since August of 2013. News outlets, nonprofits, and blogs went crazy, cannabis stocks plunged and investors ran for the hills. What happened was simply a restoration of prosecutorial discretion to individual U.S. Attorneys to make enforcement decisions within their own districts.
So what does this really mean, and what might happen to the cannabis industry as we know it?
The Cole Memo — an Obama Administration policy — was the basis upon which local and state lawmakers, entrepreneurs and investors moved forward with the formation, licensing and oversight of legal cannabis businesses. The perception became that cannabis really was legal and that the drug war was over. Communities embraced the idea of controlling and taxing cannabis, rather than leaving the production and profits to violent gangs and drug cartels; regulations were issued in states where voters determined cannabis should be treated as a commodity, rather than contraband. Dilapidated retail storefronts filled, abandoned warehouses were leased and, in “green zones”, real estate prices soared.
Advocates like me, however, still shouted from the rooftops that cannabis and hemp were illegal on the federal level but, in many cases, were drowned out in the cacophony of business opportunities.
Sessions’ move has now brought attention to the problem that we in the cannabis movement have had for several years since the federal government eased back on enforcement in 2014: a lackadaisical view of federal prohibition and acceptance of the failed status quo at the federal level. The industry was never fully sustainable, and never fully safe for its participants, as long as cannabis remained classified as a Schedule I substance by the U.S. government, because there was always the possibility that federal law enforcement would resume prosecutions, and prohibition kept the industry from fully accessing the American financial system.
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The actions by the U.S. government thrusts the waste of law enforcement resources back into plain view of the public — 64 percent of whom now support full legalization — and pits the local and federal governments against one another in a novel way. The recission of the Cole memo will now interfere not just with the profits of cannabis businesses, but also with state and local budgets that have come to depend on legal cannabis tax dollars, rather than on property forfeiture kickbacks from enforcing federal drug laws.
There will be consequences stemming from this announcement. If they can be targeted by federal law enforcement for providing their services, banks, attorneys, insurance companies, and potential investors will be more reluctant to provide investment capital, legal advice or other basic professional services necessary for cannabis businesses to function. Localities wobbling in their decision to license facilities likely will not provide safe access to legal cannabis out of fear of federal interference. Otherwise law-abiding businesses will be selectively prosecuted based on which district they are in. Those are the intended results: The Department of Justice wants to slow the growth of the legal cannabis industry, especially since they can’t seem to totally destroy it (yet).
Still, Sessions has directly lobbied Congress to rescind these minimal federal protections for the medical cannabis industry. He’s a long-time enemy of legal cannabis, going so far in April 2016 as to moralize about cannabis consumers (“good people don't smoke marijuana") and stand against any decriminalization efforts (“we need grownups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized, it ought not to be minimized, that it's, in fact, a very real danger.”)
His actions on Thursday may backfire, however, by providing a long-needed wake-up call in Washington that could finally bring about the changes necessary for a fully legal, sustainable cannabis industry in America; that is why I am actually optimistic.
Sessions' new marijuana policy may backfire by providing a long-needed wake-up call in Washington that could finally bring about the changes necessary for a fully legal, sustainable cannabis industry in America.
And Sessions’ actions put the Trump Administration at war with California — the world's 6th largest economy. The California attorney general, Xavier Becerra, said as much, as have several elected officials, including Lieutenant Governor Gavin Newsom, who tweeted “Jeff Sessions has destructively doubled down on the failed, costly, and racially discriminatory war on drugs, ignoring facts and logic and trampling on the will of CA voters. Have no doubt — CA will pursue all options to protect our reforms and rights.”
Perhaps Jeff Sessions is no longer a state’s rights advocate? President Trump, after all, identified marijuana legalization as a states’ rights issue on the campaign trail in 2015, and prosecuting state-legal businesses for violations of federal laws that many states voters have rejected, in part or in whole, hardly seems respectful of the will of voters, the principles of federalism or the very ideological foundations of the Republican Party.
But it takes an outrage to bring attention and change to the policies and the institutions that have supported prohibition, despite the American public’s perspective and votes.
It’s now up to Congress to uphold the will of the American people on marijuana, or allow the destruction of American jobs and the crippling of a nascent American industry.
Participants and investors in the industry now have a moral, legal, professional — and in some cases fiduciary — responsibility to work towards a federal law change. We are still just a movement (even though we started calling ourselves an industry) because most people who participate cannot bank or pay taxes like businesses in any other industry, and people are still languishing in prison for petty marijuana crimes in states that have since decided it is legal while newcomers to cannabis, usually educated, wealthy and white, are making millions. (And, let us not forget the desperate patients that could be denied safe access to their medicine because of the federal government's decision to allow more raids on and prosecutions of suppliers who may serve both the medical and legal adult markets.)
In the absence of interest from the executive branch, only Congress can take permanent action to remove cannabis from Schedule 1 and the Controlled Substances Act entirely. Only Congress can opt to regulate retail cannabis at the federal level just like alcohol, tobacco and firearms, to force the Drug Enforcement Agency to allow for more scientific research and the Food and Drug Administration to allow cannabinoid compounds in its regulatory process, which is needed for its acceptance in mainstream medicine.
One act of Congress — delisting marijuana — will simultaneously solve the banking problem for the legal cannabis industry, the IRS’s 280e code (that disallows all normal business deductions for cannabis businesses) and the crippling mandatory minimum sentences associated with getting caught by law enforcement with cannabis, which sadly still proves to be the most dangerous aspect of the plant, by far. The Trump Administration has clearly shown its hand on cannabis policy, despite its promises and statements to the contrary.
It’s now up to Congress to uphold the will of the American people, or allow the destruction of American jobs and the crippling of a nascent American industry because of one official’s outdated prejudice and refusal to accept abundant new research.
Dale Sky Jones is the executive chancellor of Oaksterdam University and an expert on cannabis policy reform, working with several state and foreign governments on educational programs. Oaksterdam University provides quality training for the cannabis industry and its regulators since 2007, online or on campus in Oakland, California.