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Justice Department Investigations Are ‘Protecting Consumers’ Access’ To Marijuana, Top Official Says



Although a Justice Department whistleblower told Congress that resources were improperly expended investigating marijuana industry mergers due to the attorney general’s bias against legalization, a top department official says that those actions are better understood as helping to ensure consumers have affordable access to products in a competitive cannabis market—a curious position for the federal government to take.

The dispute was the subject of a contentious hearing before the House Judiciary Committee last month at which Democratic lawmakers slammed Attorney General William Barr over the allegations that he inappropriately directed DOJ’s Antitrust Division to scrutinize 10 proposed marijuana business transactions because he opposes the industry.

But in a little-noticed letter to lawmakers earlier this month, Makan Delrahim, assistant attorney general for the Antitrust Division, said that the investigations were actually “consistent with protecting consumers’ access to cannabis products, not with animosity toward the industry.”

“As the Division was deciding whether to open an investigation, it faced significant matters of first impression regarding the role of antitrust in this industry,” he wrote. “Effective antitrust enforcement seeks to preserve market conditions that will lead to lower prices and higher output, quality, and innovation.”

Delrahim pointed out that the division had “no prior experience—let alone subject matter expertise” in the marijuana industry, and so a proposed transaction involving MedMen and PharmaCann presented a unique opportunity to look at the cannabis market.

“In particular, the Division was forced to consider whether the antitrust laws could or should be applied to protect and promote lower prices and increased output of a substance that is facially illegal under federal law,” he said in the letter, which was first reported by Politico. “Ultimately, the Division determined, in consultation with others in the Department, that it should analyze proposed transactions in that industry to determine whether ‘the effect of such acquisition may be substantially to lessen competition,’ as required under” federal law.

At the House Judiciary Committee hearing, the whistleblower, John Elias, argued that there wasn’t an appropriate basis for the probes, which at one point accounted for one-third of the Antitrust Division’s cases and caused cannabis companies to submit at least 5,965,000 documents for potential review by officials. Career staff had recommended against scrutinizing the transactions, only to be overruled by political appointees.

Delrahim argued in his letter that Elias’s testimony is “misleading and lacks critical facts,” and stated that he “did not work on, oversee, or otherwise have any first-hand involvement in the matters about which he testified.”

The department’s Office of Professional Responsibility, to which Elias’s complaint was referred, ultimately concluded that no rules had been violated in ordering the investigations, regardless of the allegation about Barr’s prejudice against the cannabis industry. That said, the matter is also separately being looked into by the inspector general, according to a June memo.

Delrahim explained in his letter that the probes took up so much time and resources because the division had to “build out an understanding of the industry from scratch.”

“Moreover, the sale of cannabis is subject to unique, state-specific regulatory and legal structures; because it cannot be transported across state lines, learning about the industry in one state reveals nothing about likely competitive effects of a transaction in another,” he wrote.

Three dozen House Democrats filed a resolution last month calling for an impeachment inquiry into Barr’s conduct, with the measure saying he “abused the power of his office to initiate pretextual antitrust investigations into ‘unpopular’ American corporations in the cannabis, automobile, and technology industries.”

Read the full letter defending DOJ’s marijuana industry investigations below:

DOJ Defends Marijuana Indus… by Marijuana Moment on Scribd

Lawmaker Revises Misleading Comments On Marijuana Protections In Congressional Report

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Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy.


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