Industry insiders, state officials in recreational cannabis markets vow to stay the course

Prominent figures from the nine recreational marijuana markets in the United States reacted defiantly to the announcement that Attorney General Jeff Sessions is throwing out Obama-era protections for the legalized cannabis industry.

From Alaska to Maine, industry insiders in states with legal adult-use programs and politicians from both sides of the aisle spoke out against the action.

But most seemed relatively calm as they prepared to sort out what the demise of the Cole Memo might mean for the industry.

In fact, the majority opinion seemed to be that the marijuana industry should conduct “business as usual.”

Here’s a look at the U.S. recreational markets:

Alaska

Alaska’s recreational marijuana business owners shouldn’t get too skittish about the news, insiders said.

Legal cannabis continues to grow in popularity, and the state has come to rely on the tax dollars the program generates, said Cary Carrigan, executive director of the Alaska Marijuana Industry Association.

According to a statement from the industry, “This is a clear slap in the face to the American voters and residents of Alaska, who overwhelmingly and resoundingly have supported this industry at the ballot box.”

Carrigan pointed out that U.S. Rep. Don Young – a Republican who’s a member of the Congressional Cannabis Caucus – and Alaska legislators traditionally have been supportive.

Jana Weltzen, a cannabis attorney in Anchorage, also isn’t worried. She believes federal prosecutors in Alaska have bigger fish to fry.

“Alaska has some of the highest crime statistics in the nation,” she said, “so I’m guessing their focus is going to be on criminal activity that isn’t marijuana.”

She also noted that Gov. Bill Walker has been an ally to adult-use cannabis.

Walker, an independent, was one of four governors who sent a letter to Sessions last year asking the Department of Justice to maintain the Obama administration’s hands-off enforcement approach to states that have legalized cannabis.

“We feel comfortable with our Gov. Walker,” she said.

California

Up and down the Golden State, public officials and cannabis industry leaders said the marijuana sector will continue uninterrupted.

And companies say they’ll keep operating as normal and regulators don’t intend on changing course.

Lori Ajax, the chief of the California Bureau of Cannabis Control, said in a statement that she “fully expects” the DOJ and Trump administration to “respect the rights of states” when it comes to voter-supported legalization regimes.

But even if they don’t, there’s no indication the loss of the Cole Memo will affect any California policies.

“We’ll continue to move forward with the state’s regulatory processes covering both medicinal and adult-use cannabis, consistent with the will of California’s voters, while defending our state’s laws to the fullest extent,” Ajax said in the statement.

Other California officials offered similar stances.

Lt. Gov. Gavin Newsom, a Democrat, called the move “an ideological temper tantrum by Jeff Sessions,” and Los Angeles City Council President Herb Wesson said it was an example of “Washington running amok.”

“California will stand together to pursue all legal, legislative and political options to protect its reforms and its rights as a state,” Newsom said in a statement.

California Attorney General Xavier Becerra said he intends to “vigorously enforce our state’s laws and protect our state’s interests.”

“In California, we decided it was best to regulate, not criminalize, cannabis,” Becerra continued in his statement. “After all, this is 2018, not the 20th century.”

Wesson, meanwhile, issued one of the more strongly worded responses by a California public official:

“We will not be bullied by an out-of-town and out-of-touch politician,” he said. “The voters of California and Los Angeles have spoken, and we will continue doing our job of reasonably regulating the cannabis industry.”

Colorado

Government leaders in Colorado – which has the longest-running recreational marijuana program – came out against Sessions’ actions in force.

Democratic Gov. John Hickenlooper, who joined Alaska’s Gov. Walker in writing a letter last year objecting to Sessions’ position on cannabis, released a statement that said, in part, “today’s decision does not alter the strength of our resolve … nor does it change my constitutional responsibilities.”

Republican Sen. Cory Gardner said he’s prepared “to take all steps necessary,” including holding up the confirmation of Justice Department nominees, “until the attorney general lives up to the commitment he made to me prior to his confirmation.”

Brian Vicente, a cannabis attorney in Denver, said he thinks it’s unlikely there will be a dramatic enforcement ramp-up stemming from Sessions’ announcement and is heartened by the bipartisan backlash against Sessions’ actions.

“But it’s certainly possible that U.S. attorneys around the country, perhaps in certain areas that do have marijuana laws, may choose to make this more of a priority,” he added.

He offered the following advice for business owners:

“This is the time to double down on compliance. Make sure you’re following all state and local laws. Get your taxes up to date. Continue to be good neighbors. If all those activities are followed, I’m not too concerned about Colorado’s business owners.”

Colorado’s U.S. attorney, Bob Troyer, issued a statement saying, in part, that his office already has been following the principles Sessions issued – a sign that he won’t make any major changes in enforcement policies.

“We will, consistent with the Attorney General’s latest guidance, continue to take this approach in all of our work with our law enforcement partners throughout Colorado,” Troyer said.

Maine

Even though Mainers voted to approve recreational marijuana in 2016, Gov. Paul LePage, a Republican, has steadfastly stood in the way of creating a working program, and Sessions’ announcement likely will only solidify his opposition.

“It’s going to hamper the rollout of the market,” said David Boyer, the Maine political director for the Marijuana Policy Project.

Boyer hopes Maine’s federal prosecutor follows the will of the voters and doesn’t crack down on the adult-use market.

But there’s still work to be done to implement Maine’s adult-use program.

A legislative hearing is scheduled for Friday to propose a bill with a new regulatory framework. The measure was approved by lawmakers then vetoed by LePage in 2017.

In nixing the bill, LePage cited concerns over the federal illegality of cannabis. A subsequent effort to override the veto failed.

In order to implement the rec program – provided that LePage vetoes another bill – Boyer said it will require changing the minds of Republican lawmakers to get the necessary two-thirds vote to override the governor.

“But (LePage) is still in charge of these government agencies,” Boyer said. “He now has a little more cover to say that he’s not going to implement it even though the legislature passed it.”

Massachusetts

After Sessions’ announcement, Massachusetts Gov. Charlie Baker said the state plans to push forward with implementation of adult-use cannabis sales.

The Republican also called Sessions’ move “the wrong decision.”

Massachusetts voters approved recreational marijuana in 2016, and progress is being made toward a July 1 launch of sales. In December, the state’s Cannabis Control Commission approved a set of draft regulations.

The commission said in a statement that “nothing has changed” because of Sessions’ announcement.

“We will continue to move forward with our process to establish and implement sensible regulations for this emerging industry in Massachusetts.”

Kris Krane, managing partner of Boston-based 4Front Ventures, said Massachusetts cannabis businesses are in a different position than those in states that have already begun recreational sales because the Rohrabacher-Blumenauer Amendment remains intact.

“The justice department and these U.S. attorneys are still, regardless of the Cole Memo, prohibited from cracking down on state-legal medical marijuana businesses,” Krane said.

“In Massachusetts, at least right now, everybody that’s licensed and operational is licensed under the medical program.”

The July deadline to begin adult-use sales gives the state’s industry about half a year to assess what this really means, he added.

“The fact that Massachusetts has taken so long to implement their adult-use program may be somewhat beneficial,” Krane said. “It gives businesses time to assess what the new reality actually is.”

Nevada

Nevada’s recreational market hasn’t even hit full stride and it’s already outpacing expectations.

With each month setting records in sales – more than $38 million in October alone – lawmakers don’t seem too eager to slow the program.

Rep. Dina Titus of Nevada’s First Congressional District said in a statement Thursday that Sessions’ actions were a “direct attack on the state of Nevada, sovereign tribal governments and the rights of people in states, tribes and territories all across the United States.”

She went on to say rescinding the Cole Memo “undermines Nevada’s $622 million industry, threatens nearly $1 billion in new investments and jeopardizes thousands of new jobs and more than $60 million in tax revenue for the state.”

According to The Associated Press, Nevada Sen. Richard “Tick” Segerblom, a Democrat, said a federal crackdown could kill an industry on which the state now depends.

Republican U.S. Sen. Dean Heller of Nevada said Justice Department officials should meet with Gov. Brian Sandoval and state Attorney General Adam Laxalt, also Republicans, about how the policy change might affect Nevada, according to the AP.

Oregon

David Kopilak, a shareholder in Portland’s Emerge Law Group, said it’s tough to predict how Oregon’s U.S. attorney, Billy Williams, will respond to Sessions’ policy change.

Kopilak noted, however that Williams has “adhered” to the Cole Memo and has yet to go after a state-compliant marijuana business.

But Williams did aggressively pursue federal charges for marijuana possession against 19-year-old Native American Devontre Thomas, who faced a year in prison over 1 gram of marijuana.

When news of the prosecution went public, Williams faced a fierce backlash from Oregon voters and politicians and eventually dropped the charges against the teen.

Meanwhile, Gov. Kate Brown, a Democrat, issued this statement:

“Reports that Attorney General Jeff Sessions will roll back federal marijuana policy are deeply concerning and disruptive to our state’s economy.

“Over 19,000 jobs have been created by the market Oregon worked carefully to build in good faith and in accordance with the Cole Memorandum.

“The federal government must keep its promise to states that relied on its guidance.”

Kopilak also predicted that marijuana businesses already in operation would continue to stay open, but that people looking to break into the industry may now wait to see what happens.

“For those already in the business, it’s business as usual,” he said. “For those thinking about getting in but who aren’t in yet, it may have a chilling effect.”

Washington state

Much like Colorado, Washington’s program has been around too long to go anywhere now, according to industry watchers.

The state’s governor and attorney general as well as Seattle’s mayor all spoke out against Sessions’ actions.

Democratic Gov. Jay Inslee called the revocation of the Cole Memo “the wrong direction for our state.”

“In Washington state we have put in place a system in place that adheres to what we pledged to the people of Washington and the federal government,” he wrote in a statement.

“It’s well regulated, keeps criminal elements out, keeps pot out of the hands of kids and tracks it all carefully enough to clamp down on cross-border leakage.

“We are going to keep doing that and overseeing the well-regulated market that Washington voters approved.”

Washington state Attorney General Bob Ferguson added:

“I am disappointed … that AG Sessions plans to abandon the current federal policy on marijuana — a policy that respects states’ rights and focuses federal enforcement on key, shared areas of concern.”

Seattle Mayor Jenny Durkan, a former U.S. Attorney for Western Washington, said:

“Reversing course now is a misguided legal overreach and an attack on Seattle, the state of Washington and a majority of states where the voters have made their voices heard loud and clear.”

According to U.S. Attorney Annette Hayes, who represents Western Washington, (Sessions) “reiterated his confidence in the basic principles that guide the discretion of all U.S. Attorneys around the country, and directed that those principles shepherd enforcement of federal law regarding marijuana.”

It’s still too early to tell what this all mean for cannabis business owners in Washington state, said one marijuana lawyer.

“But marijuana businesses need to know that this is a huge shift in federal marijuana enforcement policy,” said Daniel Shortt, a Seattle-based cannabis attorney.

Washington DC

The District of Columbia is a unique marijuana market.

While adults are allowed to grow and possess cannabis for personal use, sales and purchases are not permitted under the district’s current law.

That means there are no recreational businesses for federal officials to go after.

The U.S. attorney for the District of Columbia, Jessie Liu, could not be reached for comment, and there don’t appear to be any statements or cases involving marijuana that might reveal how she will approach Session’s announcement.

Bart Schaneman can be reached at [email protected]

Reporters Omar Sacirbey and John Schroyer contributed to this report.

10 comments on “Industry insiders, state officials in recreational cannabis markets vow to stay the course
  1. AJL on

    The politicians work for the voters, not vice versa. The politicians who think they more than what the voters rallied for are going to be short lived. President Trump said this was a states issue and he should be held to that. If he gave his blessing to Jeff Sessions for this fiasco, it is disappointing. I LOVE where our economy is heading as jobs are now plentiful but Sessions needs to go and fast.

    Reply
  2. Malcolm Kyle on

    Here are several extracts from an article posted at the ‘Tenth Amendment Center’ on 30th Dec 2015, concerning Prohibition and Federal Law:

    “Of course, the federal government lacks any constitutional authority to ban or regulate marijuana within the borders of a state, despite the opinion of the politically connected lawyers on the Supreme Court. If you doubt this, ask yourself why it took a constitutional amendment to institute federal alcohol prohibition.”

    “FBI statistics show that law enforcement makes approximately 99 of 100 marijuana arrests under state, not federal law.”

    “Furthermore, figures indicate it would take 40 percent of the DEA’s yearly-budget just to investigate and raid all of the dispensaries in Los Angeles – a single city in a single state. That doesn’t include the cost of prosecution. The lesson? The feds lack the resources to enforce marijuana prohibition without state assistance.”

    “With nearly half the country legalizing marijuana, the feds find themselves in a position where they simply can’t enforce prohibition any more. The feds need state cooperation to fight the “drug war,” and that has rapidly evaporated in the last few years with state legalization, practically nullifying the ban.”

    “The lesson here is pretty straight forward. When enough people say, ‘No!’ to the federal government, and enough states pass laws backing those people up, there’s not much the feds can do to shove their so-called laws, regulations or mandates down our throats,” Tenth Amendment Center founder and executive director Michael Boldin said.

    Reply
    • Barry Belinky on

      AG McCarthy – I mean Sessions – is out of step with the country. The problem is that for Sessions the issue is not legal but moral. Logical arguments will never change his mind. The will of the people is ignored in deference to his moral views.

      Reply
  3. Dan Perkins on

    What concerns me is that none of the state or individual comment reflect the fact that the Justice Dept can call in DEA and raid state legal dispensaries. They can take product and cash and possible go to deposit institutions and confiscate cash.

    I think the recerionail is at greater risk than medical. Banks and credit unions will think hard about keeping money especially if the Feds come knocking at their doors.

    Reply
  4. Terry Lynch on

    As a retired small business owner, Sessions insults me. I worked hard all my life and all government has ever done is impede small business. I have never used marijuana, never wanted to, but if it is found to provide relief for some folks’ pain, Sessions should just plain butt out. The old hackneyed themes need to be sent out to pasture as should Sessions. By the way, I’m a Trump supporter and my Representative Mc Morris best take heed. Clean up this foolishness about cabanas or face a new day for congress. Fire Sessions.

    Reply
  5. Chuck Sloan on

    I’ve called both of my senators in my state, and voiced my displeasure with Sessions and president Trump and I think every one else should to. #do it#

    Reply
  6. junior04 on

    I’ve called both of my senators in my state, and voiced my displeasure with Sessions and president Trump and I think every one else should to. #do it#

    Reply

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