Recreational cannabis states prepping for possible federal crackdown

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

By John Schroyer

California, Colorado and Oregon have begun taking steps to protect recreational marijuana businesses and consumers against a possible federal crackdown under the new Trump administration.

Oregon this month approved legislation to shield the identities of marijuana consumers from federal agents.

Colorado lawmakers are voting on legislation to permit recreational marijuana businesses to reclassify their inventory as medical cannabis – in the event the feds target adult-use businesses.

And California lawmakers are weighing legislation to bar local police from working with U.S. Drug Enforcement Administration agents who go after legal MJ businesses.

Since Donald Trump’s win last November, a raft of voices have urged the president and his attorney general, Jeff Sessions, to lay off marijuana businesses and maintain the hands-off status quo begun under the Obama administration.

Trump, however, has not articulated a policy stance on cannabis aside from off-the-cuff campaign remarks. It’s why lawmakers in California, Colorado and Oregon – all three recreational cannabis states – have begun taking matters into their own hands.

Karen O’Keefe, director of state policies for the Marijuana Policy Project, said the more ruckus states make about maintaining their own sovereignty when it comes to cannabis legalization, the better.

That’s why she’s encouraged by the legislation in the three rec states.

“We’re cautiously optimistic that the administration will keep Trump’s word from during the campaign, which was to let states make their own decisions about marijuana,” O’Keefe said. “Certainly, the more noise there is to make it clear that more than 70% of the American public does not want to see intervention, the more pressure it will create to make clear that they need to keep their word.”

She pointed to a pair of recent polls that found 71% and 73%, respectively, of Americans favor states’ rights over federal intervention on marijuana.

What’s being done

When it comes to action, only one state has taken the first step: Oregon passed into law SB 863 to protect the identities of marijuana consumers from federal agents that may be interested in prosecuting them. Oregon Gov. Kate Brown said she’s concerned about actions Sessions may take against MJ businesses and consumers.

Other states, however, are not far behind.

Colorado’s Senate has approved SB 192 to allow recreational MJ businesses to reclassify inventory as medical. So far, medical marijuana businesses remain protected by the Rohrabacher-Farr Amendment, which prohibits the Department of Justice from using federal money to interfere in state MMJ programs. But the amendment doesn’t cover rec companies.

Whether the bill will get past the House is still an open question (the measure faced a House committee hearing Monday, but was rescheduled for later consideration).

Kristi Kelly, of the Colorado-based Marijuana Industry Group, declined to comment on the measure’s chances. But she said the bill is asking for “a one-time protection for people who have already been licensed by the state, in the event of the unforeseen. Yes, we hope that this becomes a law.”

California weighing options

In California, the legislature is considering a bill that would prohibit local police from coordinating with DEA agents if they try to interfere with state-legal MJ businesses. But the measure, AB 1578, has passed only one committee and hasn’t had a vote in either the Assembly or the Senate.

Lt. Gov. Gavin Newsom wrote Trump in February, arguing that “creating a legal and tightly regulated marijuana marketplace has massive public support.” And the state did retain former U.S. Attorney General Eric Holder as counsel, specifically to battle possible federal policy changes from Trump. (It was under Holder that the Cole Memo was issued.)

But it’s unclear whether marijuana will be a priority for Holder, said Sacramento-based MJ consultant An-Chi Tsou.

“Although he’s obviously a huge asset in the fight against the Trump administration that California’s going to have, I think he’s more of an ace in the hole on the cannabis issue,” Tsou said.

And Tsou believes AB 1578 is a long shot that Gov. Jerry Brown may not sign even if it does reach his desk.

Tsou did note Trump and Sessions haven’t yet made life harder for marijuana businesses. If they do start trying to shut down state rec MJ laws, however, that’s when California officials may kick into gear.

“I don’t think there’s a huge push for taking any immediate action, because Sessions hasn’t taken action anywhere else, let alone California,” Tsou said.

Stay out of our stash

The most high-profile proponents of letting states continue to chart their own regulatory courses on marijuana have been the governors of Alaska, Colorado, Oregon and Washington, who all signed a letter to Trump in early April asking him “to engage with us before embarking on any changes” to federal marijuana policy.

A bipartisan group of 11 U.S. senators also sent a formal letter to Sessions in early March, requesting that he “clarify DOJ’s policy regarding state marijuana laws,” and expressing support for the continuation of the 2013 Cole Memo.

Other elected state officials have also been vocal advocates of keeping the Department of Justice leashed up when it comes to possible enforcement of federal law.

For instance, the attorneys general of both Colorado and Washington have said they would take the federal government to court if the DOJ tried to quash the adult-use marijuana industries in their states, and Colorado Attorney General Cynthia Coffman – a Republican – even offered to give Sessions a tour of the Colorado industry so he can “see what we have done.”

O’Keefe said that when it comes down to brass tacks, the industry probably doesn’t have much to worry about.

“I’ve worked on this issue since 2003, and every administration has been hostile initially to MMJ,” O’Keefe said. “I’d suspect that it would be more likely, if (the Trump administration) were to ramp up enforcement, that it would be around the margins, under the pretext or to further enforce some of the eight criteria under the Cole Memo, or make slight modifications to it.”

John Schroyer can be reached at