On November 8th, citizens of California, Nevada, Massachusetts and Maine voted to legalize recreational marijuana. Medical marijuana measures were also enacted in Florida, Arkansas, North Dakota and Montana. Now that marijuana in some form is legal in 28 states, one would think that removal of marijuana as a Schedule I drug under the Federal Controlled Substances Act is inevitable, right?
November 8th also brought the election of Donald Trump as President. Trump has previously stated that marijuana legalization should be left to the states. Proposed members of his administration, however, strongly oppose legalization of marijuana. If for instance, Rudy Giuliani or Chris Christie becomes Attorney General, we could see the federal government taking a very different stance on marijuana enforcement than that of the Obama administration. On the other hand, the majority of Americans support marijuana legalization and the trend of state legalization of marijuana is clear. Nonetheless, the best outcome we can likely hope for with the Trump administration is for the federal government to maintain the enforcement priorities set forth in the Cole Memo and to let the states to continue to regulate recreational and medical marijuana as a legal industry.
Problems will continue to impede the legal marijuana industry even if the federal government continues to take a hands off approach. Federal illegality means that marijuana businesses will continue to struggle to open bank accounts and will be blocked from obtaining commercial bank loans. Marijuana businesses will also continue to be restricted from taking federal income tax deductions and exemptions. Other issues raised by federal illegality include the inability to claim bankruptcy protection, the inability to register federal trademarks and patents, and the enforcement of contract claims in federal and state courts.
Declassification of marijuana as a Schedule I drug and normalization of the legal marijuana industry will likely have to await another administration and another congress. Until that time, it will be up to the states to continue to lead the effort to end marijuana prohibition.
For more information on the regulation of marijuana businesses in Washington State, please contact Heather Wolf.