Week in Review: A Game-Changer for Cannabis Industry or More False Hope?

Ask cannabis professionals and advocates what they think about last week’s announcement from the Department of Justice, and you’ll likely get an answer filled with superlatives. Some are calling it the biggest development for the cannabis cause in decades and a decision of historic proportions. Others are going so far as to say it is a game-changer that will usher in the end of marijuana prohibition.

These could indeed be apt descriptions of the DOJ’s decision to let Colorado and Washington state proceed with their adult-use marijuana laws and issue new, industry-friendly directives to federal prosecutors on cannabis issues.

There is plenty of reason to be optimistic, after all. As Medical Marijuana Business Daily wrote in an analysis piece last week, the development could lead to changes in everything from banking access and taxes to the funding climate.

But some observers are sounding a more cautious note, saying we’ve been here before – most notably with the so-called “Ogden Memo,” which serves as an example of how the Obama administration has said one thing and (in some cases) let district attorneys do another.

“There are some weasel words in this,” Dale Gieringer, director of the California chapter of the National Organization for the Reform of Marijuana Laws, told the LA Times when asked about the DOJ’s latest move. “They’re not going to make a priority to do something, but that doesn’t mean they won’t do it.”

Indeed, some professionals who took the government at its word and moved forward with medical cannabis businesses while complying with state laws have been burned badly, with a handful even ending up in jail.

Anyone in the industry would do well to keep that in mind.

If you operate a medical marijuana business or hope to launch a company targeting the adult-use market, it’s best to proceed cautiously. Although last week’s development is promising, it doesn’t mean you’re completely in the clear. The most important thing is to keep your expectations in check, as “irrational exuberance” at this critical point in the industry’s future could sink your entire business.

Entrepreneurs and business owners still face sizable risks in both the medical and recreational markets, including possible prosecution and, at worst, jail time. It could be months before we have a better sense of whether the government will back up its words with action – or in this case inaction, in terms of letting state-legal cannabis industries develop.

Also last week, an Oregon group signaled its intention to push for a marijuana legalization ballot measure in 2014, hoping to join Colorado and Washington as the only states that have approved the possession, sale and use of cannabis for recreational purposes. Oregon voters shot down legalization in 2012 by a relatively wide margin. But the climate now is much more favorable in general, and the measure’s odds of passage are much better.

Several other states such as Alaska, Maine and Rhode Island will also likely seriously consider – and possibly pass – recreational marijuana laws in the next few years.

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