National News

Justice Dept. Shift Threatens Legal Marijuana

Posted January 4, 2018 9:38 p.m. EST
Updated January 4, 2018 9:43 p.m. EST

FILE-- Cannabis at Harborside, a medical marijuana dispensary in Oakland, Calif., Oct. 20, 2016. The Trump administration on Jan. 4, 2018, will free federal prosecutors to more aggressively enforce marijuana laws, effectively threatening to undermine the legalization movement that has spread to six states, most recently California. (Jim Wilson/The New York Times)

WASHINGTON — The viability of the multibillion-dollar marijuana legalization movement was thrown into new doubt Thursday when the Trump administration freed prosecutors to more aggressively enforce federal laws against the drug in states that have decriminalized its production and sale, most recently California.

Attorney General Jeff Sessions, long a vocal opponent of the legalization of marijuana, rescinded an Obama-era policy that discouraged federal prosecutors in most cases from bringing charges wherever the drug is legal under state laws.

“It is the mission of the Department of Justice to enforce the laws of the United States, and the previous issuance of guidance undermines the rule of law,” he said in a statement. In his memo to U.S. attorneys, he called the earlier policy “unnecessary” and pointed to federal laws that “reflect Congress’s determination that marijuana is a dangerous drug and that marijuana activity is a serious crime.”

Democrats and some Republicans condemned the move. Sen. Cory Gardner, R-Colo., threatened to retaliate by holding up Justice Department appointments that required Senate approval. Gavin Newsom, the Democratic lieutenant governor of California, vowed to encourage cooperation among states that have legalized marijuana.

“This brings states together around issues of freedom, individual liberty, states’ rights,” he said in an interview, “all of the principles that transcend red and blue.”

California began allowing the sale of recreational marijuana Monday, joining Alaska, Colorado, Nevada, Oregon and Washington. Massachusetts and possibly Maine are expected to begin sales this year. In all, 29 states and the District of Columbia have at least partly legalized the substance — including for medicinal use — though it remains illegal under federal law.

The move seemed certain to increase the confusion surrounding whether it is legal to sell, buy or possess marijuana in those parts of the United States where state and federal law conflict. Federal law has long prohibited those activities.

In 2013, after voters in Colorado and Washington state voted to decriminalize marijuana for recreational use, the Justice Department deliberated about how to handle the resulting disconnect between state and federal law. Ultimately, federal prosecutors were instructed to deprioritize most marijuana-related prosecutions in those states.

Justice Department officials would not say whether they intended to carry out a crackdown and begin prosecuting commercial growers, distributors and shopkeepers, or were instead merely trying to sow doubt and slow growth in the semilegal industry.

The dissonance between federal laws that outlaw marijuana and a growing number of state laws that allow and regulate it make uncertainty a fact of life for marijuana businesses and consumers. They say they live constantly with shifting legal terrain, losing their bank accounts and lines of credit and never knowing how vulnerable they may be to losing their business or being federally prosecuted.

“It’s a really scary time for us,” said Jaime Lewis, whose Denver-based company, Mountain Medicine, sells marijuana-infused honey sticks, chocolates and cookie bites across Colorado.

Lewis said she emailed her 15 employees Thursday to tell them that things were “business as usual,” and added that she still had access to her credit union and had no plans to close her business.

Gardner accused Sessions of violating promises he had made not to interfere.

“With no prior notice to Congress, the Justice Department has trampled on the will of the voters in CO and other states," Gardner wrote on Twitter, adding: “I am prepared to take all steps necessary, including holding DOJ nominees, until the Attorney General lives up to the commitment he made to me prior to his confirmation.”

The White House press secretary, Sarah Huckabee Sanders, maintained that President Donald Trump was not going back on a campaign promise to refrain from using federal authority to shut down sales of recreational marijuana in states where they were legal.

The Justice Department move, she said, “simply gives prosecutors the tools to take on large-scale distributors and enforce federal law. The president’s position hasn’t changed, but he does strongly believe that we have to enforce federal law.”

Gov. Kate Brown of Oregon, a Democrat, said that she was still exploring her options, but that the net effect of Sessions’ move was to “rip the framework from underneath us.”

Marijuana has become an important industry in Oregon, she said, with 19,000 new jobs, many in rural areas, and $100 million in state tax revenue over the past year and a half put toward schools, law enforcement and other programs.

Gov. John W. Hickenlooper of Colorado, a Democrat, said he doubted that the move would have much immediate effect on his state’s legalized marijuana industry. He expressed skepticism that U.S. attorneys would want to siphon resources from other prosecutions so they could close a marijuana dispensary operating under state regulations.

“What are you going to cut back on: heroin enforcement or sex trafficking, to shut down a little marijuana shop?” he asked.

He said he hoped Congress would pass legislation giving individual states some federal latitude to write their own marijuana regulations, taxes and other programs when their voters did approve legalization.

But during a conference call with reporters, Patrick J. Kennedy, a former Democratic congressman from Rhode Island who serves as an adviser to Smart Approaches to Marijuana, a group that opposes legalization, praised the move as a boon to public health. Marijuana users should receive treatment, not go to jail, Kennedy said, adding that the country should not allow a new profit-driven commercial push for drug consumption akin to the liquor and tobacco industries.

Sessions has put the industry on notice, said the group’s president, Kevin Sabet, a prominent critic of legalized marijuana and former drug-control policy official in the Obama administration. Sabet referred to marijuana sellers as the “new tobacco industry,” and said the drug posed more harm to brain function and public health — particularly for younger users — than legalization advocates cared to discuss.

“All these people are going to wake up today with a bit of a heartache because they thought were scot-free, when in reality, they’re not,” he said. The federal government’s hands-off approach under the Obama administration allowed a new industry to flourish. In Colorado, one of the first states to broadly legalize the drug for adult use, marijuana sales top $1 billion a year and thousands of people work in the industry, in jobs like “bud trimmers” and marijuana tour guides for out-of-state visitors.

Huge grow warehouses developed inside old industrial neighborhoods, and companies that produce marijuana-laced candies, infusions and drinks have large-scale production facilities — all of which may now have a bull’s-eye on their backs.

“I do expect to see the larger investors and businesses targeted,” said Sabet, who praised the step. “I’m not sure whether local mom-and-pop marijuana shops will be affected.”

Ramsey Hamide, an owner of Main Street Marijuana, one of Washington state’s largest cannabis retailers, agreed that the move could have important financial implications.

“The immediate concern is how it is going to impact banking — that’s a significant issue for the industry,” he said. “If the banks are feeling like they’re not protected and that they have to pull our access to banking, it is going to really make things difficult with regards to payroll and how we transact with our vendors and our tax obligations monthly to the state for the excise taxes.”

California’s marijuana industry, by far the largest in the country, is still celebrating the debut Monday of recreational marijuana sales. More than 100 dispensaries began selling marijuana across the state, and many more are expected to open in the coming weeks as San Francisco and Los Angeles begin issuing licenses.

Henry G. Wykowski, a leading cannabis lawyer in San Francisco, said he had been inundated with questions from his clients on how they should defend themselves.

“We as an industry will aggressively defend our rights to engage in an activity that is authorized by state laws,” he said. “They have challenged us before,” he said of federal authorities, “and we stood up for our rights and we ultimately prevailed.”

California was the first state to legalize medical marijuana more than two decades ago, and the industry is entrenched. The state produces far more marijuana than it consumes; the surplus is sold illegally across state lines. Those sales have been the prime target of law enforcement officials but have proved difficult to control.

Nationwide, the marijuana market in states that authorize medical or recreational marijuana is estimated at around $6 billion and projected to grow to $9 billion by the end of the year, according to Marijuana Business Daily, a trade publication. Chris Walsh, the editorial director, estimated that there were about 4,500 medical and recreational shops across the country. That number is projected to increase significantly this year as the rollout of licenses proceeds in California.

“They are not going to put this industry back in the bottle,” Walsh said.