This post is an update of a previous blog Sessions versus Marijuana: What are his Options? and covers the Attorney General’s current efforts to repeal the legalization of cannabis in states and his rescission of the Cole Memorandum. (As a quick reminder: nine states and the District of Columbia allow for recreational marijuana use and 30 allow for medical use.)
The beginning of 2018 has further demonstrated many states are ready to modify their cannabis laws and to further welcome marijuana use into civil society. This trend can be seen in recent laws which range from decreasing the penalties of possession to California opening the world’s biggest legal pot market, to Vermont becoming the first state to legalize marijuana through their legislature (after Sessions announced his new marijuana policy). Vermont’s law won’t allow sales, only for personal possession and growing. California’s legalization could triple the size of the US’s legal marijuana industry within a decade and a cannabis financial analyst estimated that their industry could be worth $5.1 billion in 2018.
When state and federal laws conflict regarding a prohibition on marijuana, banks have to respect the federal laws. The federal government regards marijuana as an illegal drug and controlled substance, banks are regulated by the federal government, thus banks may not accept money generated by marijuana as its sale is an illegal activity. Not having access to banking leaves marijuana-related businesses having to deal in cash, making it both inconvenient and also dangerous to conduct business; having piles of cash makes you inherently more vulnerable to crimes like robbery. Credit cards also cannot be used within the industry, making paying for the product difficult and putting customers at increased risk as well. Many businesses are necessarily getting creative around methods of payment, like accepting bitcoin, but the volatility of cyber-currency isn’t all that business friendly either. When speaking to this issue, Senator Jeff Merkley wrote:
“An inability to access the banking world means you create a massive all cash industry that is an invitation to money-laundering, gang activity, unlawful diversion of funds and an invitation for people to steal those gym bags full of cash when dispensaries deliver funds. I don’t understand why the attorney general and the DoJ want to increase crime in America.”
So, what is at stake?
In a recent Our American States podcast, Susan Frederick, a senior federal affairs counsel at NCSL, walked through Sessions’ actions and explained what’s at stake. States will mostly be affected in three different areas: political, economic, and criminal. The political fight is clear, with state laws pitted against federal laws, politicians at all levels are caught in the crossfire. For example, Colorado Governor Hickenlooper, a businessman himself, has repeatedly found himself at pretty much a total loss for how to advise Colorado businesses to proceed, simply hoping common sense will prevail in the end.
Economically, many states have regulatory schemes in place to receive taxes on the products; taking away this revenue stream would impact the economies of all of these states. Karmen Hansen, a program director in NCSL’s health program, broke down the statistics on states; with Colorado gaining 247 million dollars in 2017 from legal marijuana sales and an estimated 639 million since 2014.
Finally, on the criminal justice side, the states who have implemented different marijuana, less strict, policy have noticed cost savings because instead of spending the money to send people to jail over small amounts of marijuana, they are receiving money in the form of fines or fees, transitioning marijuana low-quantity possession from a criminal to civil offense.
How is All of this Going to Play Out?
The lack of clarity or guidance for future policy is a huge issue for business. Sessions and his team have not provided a “blanket category” to be exempted from marijuana prosecution – essentially leaving the fate of businesses and potentially consumers up to the discretion — or personal viewpoints — of their local prosecutors. For example, Colorado Attorney General, Bob Troyer (appointed by Sessions), issued a statement regarding marijuana prosecutions in Colorado, saying the office has already been focusing on “identifying and prosecuting those who create the greatest safety threats to our communities around the state” and that they will continue to focus on high threats, not your grandmother and her glaucoma medicine.
Other state decision makers, such as Attornies General, Representatives, and Senators, have come out against the Justice Department rescinding their current policy on legal marijuana enforcement. Directly after Sessions repealed the Cole Memo, Colorado Republican Senator Cory Gardner stated:
“Before I voted to confirm Attorney General Sessions, he assured me that marijuana would not be a priority for this administration. Today’s action directly contradicts what I was told, and 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. In 2016, President Trump said marijuana legalization should be left up to the states, and I agree.”
Even the Kochs released a statement in January in support of legalizing marijuana and against Sessions rescinding the memo. They stated “citizens have spoken on marijuana” and the United State Justice Department can “choose to be on the side of individual liberty and states rights” by not interfering. Many people view the war on drugs as misguided attempt to enforce drug policy, not appropriate for the current state of our society, including the Kochs.
“The administration would be better suited working with members of Congress to reform outdated sentencing laws. However well-intentioned these laws were upon implementation, they have ruined lives, torn apart families and communities, and have burdened taxpayers, doing little to keep people safe.”
The Bills
This year, there has been a ton of trending legislation surrounding marijuana – most notably the REFER Act of 2018 (Restraining Excessive Federal Enforcement & Regulations of Cannabis). This bill would withhold any federal spending used to impede state-level legal recreational marijuana – essentially preventing Sessions from interfering with states’ rights to decriminalize cannabis. The bill has six bipartisan House cosponsors: Barbara Lee (D), Earl Blumenauer (D), Jared Polis (D), Dina Titus (D), Suzanne Bonamici (D), Charlie Crist (D), Walter Jones Jr. (R), Ro Khanna (D), Zoe Lofgren (D) and Don Young (R).
When speaking about this bill, Justin Strekal – the Political Director for NORML – said Lee (the bill’s sponsor) “truly understands that the federal government needs to get out of the way of states that are ending the absurd and racist policy of marijuana prohibition” – adding – “It’s a bill with a fun name and a serious purpose.”
A search done in late February of 2018 came back with 1369 bills having to do with marijuana, clearly all 50 states are continuing to grapple with this issue, mindful of the growing national interest in putting an end to the probation (61% of Americans support legalization as of 2018).
Other trending marijuana legislation is shown below from around the country.
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