Politics
Justice Department Memo Says Marijuana Investigations Were Appropriate, But Another Probe Is Ongoing
An office within the Justice Department that investigates misconduct concluded this month that allegations about the attorney general directing improper antitrust investigations into marijuana company mergers due to personal bias were unfounded. But that doesn’t mean officials are completely off the hook, as another probe of the matter is still underway.
In a June 11 memo, which was referenced at a House Judiciary Committee hearing on Wednesday that included testimony from one of two whistleblowers who made the allegations, the Justice Department’s Office of Professional Responsibility (OPR) determined that no rules were violated and the Antitrust Division (ATR) did its due diligence in the multiple cannabis investigations.
The whistleblowers initially took their complaints to the executive Office of Special Counsel, which referred the case to OPR. When OPR approached the division with the allegation of impropriety, officials contended that because of their lack of experience assessing the industry, which “was rapidly expanding and consolidating,” the antitrust investigations were appropriate despite claims they were influenced by Attorney General William Barr’s animosity toward the marijuana industry. They also argued that, in contrast to the argument that there were “no competitive concerns” at issue, the federal-state marijuana policy conflict “made it impossible” for them to reach that conclusion in a timely manner.
The investigations resulted in the production of millions of documents from 10 cannabis companies, including MedMen and Pharmacann. Ultimately, across six of the 10 investigations for which data are available, 5,965,000 documents were produced by the marijuana companies under inquiry. The division ended up closing the cases.
“The cannabis industry provided a unique challenge to federal and state regulators alike, and it was reasonable for ATR to seek additional information from the industry through its Second Request process,” OPR said in the memo, which was first reported by Politico. “In addition, contrary to the whistleblowers’ allegations, the documents provided by ATR reflect significant, and successful, negotiations among ATR and the cannabis companies concerning narrowing the scope of the Second Requests.”
“Furthermore, the internal memoranda recommending the closure of the investigations reflect that ATR staff conducted a significant amount of analysis regarding the competitive impact of the proposed mergers, and often explained how the actions of state regulators offset any competitive concerns,” it added.
However, Elias said that what he found “very concerning” about the situation is that Barr reportedly ordered the antitrust investigations out of personal animus and intended to slow the industry’s growth. OPR did not directly respond to that claim, but the memo did state that it agrees the Antitrust Division has significant “latitude” when pursuing these cases.
“Accordingly, even if the whistleblowers’ allegations were true, OPR finds that ATR’s Second Requests would not have violated any relevant laws, regulations, rules, policies, or guidelines,” the document says. “Because OPR concludes that ATR acted consistent with all applicable laws, regulations, and DOJ guidelines in its review of the proposed cannabis mergers, OPR is closing its investigation.”
While OPR’s investigation into the whistleblower complaint is closed, Elias said at the hearing that the allegations are also being separately reviewed by the Justice Department’s inspector general.
Barr’s alleged personal opposition to the cannabis industry doesn’t seem consistent with statements he’s made in various congressional hearings, where he’s expressed interest in resolving the state-federal conflict over marijuana policy. Last year, he said that while he personally opposes legalization, he would prefer for Congress to pass a bill respecting the rights of states to implement their own cannabis policies rather than maintain blanket federal prohibition.
Read the full OPR memo on Justice Department marijuana merger investigations below:
DOJ memo on cannabis mergers by Marijuana Moment on Scribd
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Photo courtesy of Mike Latimer.
