Sessions Rescinds Hands-Off Policy re Legalized Marijuana

Well the other shoe has finally dropped today – Sessions has rescinded the Cole Memo that barred federal enforcement of marijuana laws in states where marijuana is legal. The Cole Memo set forth the Obama Administration’s priorities in regard to the enforcement of marijuana laws. These priorities included keeping marijuana out of the hands of minors, preventing diversion of marijuana to other states, and keeping organized crime out of the legal market. As long as states that legalized marijuana maintained these enforcement priorities they were safe from federal interference, until now.

As a practical matter, rescision of the Cole Memo leaves enforcement up to federal prosecutors in each state where marijuana is legal. It is unlikely that the U.S. Department of Justice has the manpower and/or funding to take on California, Washington, Colorado, Oregon and other states that have legalized marijuana. Rather, we may see selective enforcement of federal marijuana laws in jurisdictions where a US Attorney General seeks to target a specific marijuana business.

What we do know is that both Washington State’s Governor and Attorney General strongly oppose Session’s efforts to undermine marijuana legalization and will forcefully defend the state’s marijuana laws. It would also appear that any action taken by a US Attorney General at least in Washington State to enforce federal marijuana laws would be politically disastrous.

Session’s action, however, will certainly cause more banks to close marijuana business accounts and will cause even more trepidation among investors. Although Session’s rescision of the Cole Memo will not cause the demise of legal marijuana, it definitely creates further confusion and uncertainty, which halts progress towards a more stable industry.

One thing to consider is that this could finally be the point at which Congress takes on the Justice Department and acts to protect the marijuana industry. Frankly, we would all be much better off if Congress did take action to protect states that have legalized marijuana rather than relying on executive actions that are subject to change from administration to administration.

I expect that we will know more about the ramifications of today’s events in the next few weeks. Stay tuned to this blog for more information as the situation develops.

For more information on the regulation of marijuana businesses in Washington State, please contact Heather Wolf.