Morgan Fox: How the Gov’t Might Respond to Cannabis Legalization & What it Means for MMJ

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By Morgan Fox

November’s historic victories in Colorado and Washington have the whole country talking about marijuana. One of the biggest debates in the media at the moment is whether these laws will be implemented completely and what the cannabis industry will look like as a result.

All eyes are on these two states as the prospect of a boom in marijuana-related business looms on the horizon. This potential for rapid growth seems to be the primary concern for federal government officials as they determine how to react to the end of marijuana prohibition at a state level. And it is the Justice Department’s reaction that will determine how the industry takes shape.

There are a number of ways the DOJ could decide to act, each of which would have a profound impact on the MMJ industry.

Here are four possible scenarios:

#1. The government could decide to take Colorado and Washington to court. If that happens, officials could get injunctions against portions of the new statutes. However, there is no requirement that states enforce federal law. So, according to judicial precedent, there is no way to legally force the states to continue arresting marijuana users. The portions of the laws that could be challenged successfully revolve entirely around the state licensing cultivation and cannabis sales. In the event that regulating the industry is declared illegal, anyone operating a non-medical, unlicensed marijuana business or cultivation operation could be prosecuted under state and federal law.

#2. It is entirely possible, though unlikely, that the DOJ will tell Colorado and Washington that the government does not respect any portion of the new laws and will continue to enforce federal law to the letter. The legal right to do this is well established. But the fact of the matter is that the government simply does not have the resources to prosecute individual users or extremely small-scale growers. Not only is it economically unfeasible, but it would be incredibly dangerous politically in the current cultural atmosphere that favors leaving marijuana policy up to the states. Unfortunately, that means the Justice Department will focus entirely on the commercial industry.

In such a harsh business environment, the criminal market would thrive to the detriment of legitimate businesses and society in general. The bright side: In Colorado, there would still be opportunities for legal ancillary businesses to prosper. The allowance for limited personal home cultivation in Amendment 64 is still in conflict with federal law. But the lack of a licensing requirement means that the state will not arrest people for small gardens that are in compliance with the law. The vast majority of such gardens will not even show up on federal law enforcement radar. The home gardening supply industry will certainly benefit from this development, regardless of federal response.

#3. In the absence of judicial injunction or a draconian approach by the federal government, we could see other scenarios play out. If the DOJ continues with the approach it has taken recently with regard to medical marijuana, ancillary businesses will thrive while those directly involved in the cultivation and sale of marijuana will deal with the same uncertainty that those in the MMJ industry currently face. Compliance with state regulations will surely be a very important factor. Other variables – such as profits, location, community complaints and political prominence – will likely be considered when deciding which businesses to prosecute. This creates a risky business environment – but one in which smaller legitimate actors can still operate, as evidenced by the regulated medical marijuana industry in many states.

#4. There is always a chance that the Obama administration will decide to let these states implement their laws in full. Then the only concern will be the export of marijuana to surrounding states. This, however, can be prevented through cooperative action by a responsible business community and refocused law enforcement efforts. If done properly, the opening of this market to legal businesses can be a model for other states to follow, which would drastically increase the potential for development.

We now await more information from the Obama administration or the Department of Justice on how they intend to proceed. While businesses wait for word on how or if they can move forward, the federal government will certainly be looking at the legitimate marijuana industry very closely to see how it could work and if the subsequent economic growth and development will be worth taking a political risk. It is important that they see professionalism and potential in this industry if they are going to allow it to move forward.

Morgan Fox is communications manager for the Marijuana Policy Project, a Washington DC-based nonprofit that lobbies for cannabis reform.

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 6 Comments

  1. Derek Jones November 16, 2012
  2. hope November 20, 2012
  3. dax November 26, 2012
  4. Chris Lindsey November 26, 2012
  5. Marc November 27, 2012
  6. kaye October 16, 2014

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