Federal Marijuana Policy: Q&A With Attorney, Ex-DEA Agent Charles Feldmann

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By John Schroyer

Colorado attorney Charles Feldmann has worked with clients in the cannabis trade for years.

But he’s also been on the other side of the fence, working for the feds. Feldmann was a Drug Enforcement Administration agent from 1996 to 2001 and also once served as a Justice Department attorney, prosecuting Colorado narcotics traffickers.

These days, Feldmann focuses on investor relations in the legal marijuana trade, specializing in MJ securities, tax issues and funding.

Marijuana Business Daily spoke with Feldmann about the odds that the DEA will reschedule cannabis this year, the impact that could have on the industry, and his insights into the federal government’s attitude toward marijuana.

What was your role at the DEA?

I was a task force commander. Back then, the DEA was embedding prosecutors in some of their task forces. So I ran that team and then prosecuted all the drug cases that came out of the task force.

We were designated a high-intensity drug trafficking unit. Our jurisdiction was the Colorado Western Slope, so we were doing drug interdiction in northwest Colorado.

What do you apply from that time to your current work?

My transition was right around 2009, when there was a significant transition in the legal cannabis market in Colorado (with the DOJ’s Ogden Memo). I had numerous clients who were getting into the business, and they just wanted that background.

Obviously, the federal risk was far greater in 2009 than it is today. So a lot of my early work was literally just analyzing what the federal risk was and trying to manage that risk.

I was advising on what the consequences were for investors, landlords, actual license holders. And now it’s obviously evolved from there – as the federal risk has been mitigated significantly – to advising clients on how to stay 100% compliant.

Why do you think the risk of federal intervention has been mitigated?

Even when I was running the task force, marijuana was certainly far down our list of priorities. We were far more focused on methamphetamine production and heroin. Marijuana was a far lesser degree of something we would spend resources on.

And I think you’ve seen that as a consistent approach from the federal government, in terms of where they spend resources.

I still see several years of evolution and progress before we see some radical change at the federal level.

Do you think the DEA will actually reschedule cannabis this year to the less severe Schedule II? Or will the agency keep it at Schedule I?

I think there is a real potential to see a movement from Schedule I to Schedule II. I’ve had numerous sources indicate that’s a real potential. And whether that happens or not is a very closely guarded secret right now, so I don’t think anyone has a true insight on whether or not that’s going to happen.

But we are certainly preparing for the possibility of it moving from Schedule I to Schedule II. I don’t see it moving past that at this stage.

What would be the practical implications for businesses already in the legal cannabis trade if the DEA was to move marijuana to Schedule II from Schedule I?

I think for states like Colorado, that already have a very robust legal system for cannabis, there may not be much of any impact by a Schedule II move.

According to the federal government, Colorado’s entire system is illegal. So I don’t see Colorado just completely throwing away its entire system and moving to a Schedule II type system. They’re most likely to continue to operate the same way they’re operating today, and that’s without federal blessing.

For newer states coming online, states that are just getting started in cannabis, those states may very well just move into the entire Schedule II-type system. They may build their entire model to fit right under that pharmacy model. Why not? Now you’ve got the blessing of the federal government. You don’t have that risk out there anymore. So I could see new states heading in that direction.

Why do you think the DOJ continued raids on dispensaries after the Rohrabacher-Farr Amendment passed in 2014? Throughout 2015, there were still DEA-funded raids going on in parts of the country.

My best guess is they look at a lot of that as overreaching – kind of the breach of the separation of powers.

Still, I think they’re generally honoring that. You’re not seeing across the country (marijuana) being the DEA’s number one priority. But they retain their own jurisdictions and their own priorities to some degree. And I think that if they feel there’s a case that warrants that attention, they’re going to do it regardless of that bill.

Are there any other triggers that would cause the DEA to take action against a certain business?

Most of what I see is very consistent with businesses that are just outright flaunting a state cannabis system. They’re either completely black market or trying to operate behind the curtain, with significant quantities going over state lines. That’s what I see the most. Or they’re just flaunting, almost challenging, the federal government, which is more of the activist role.

This interview has been edited for length and clarity.

John Schroyer can be reached at johns@mjbizdaily.com