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One Year After Jeff Sessions Rescinded A Federal Marijuana Memo, The Sky Hasn’t Fallen

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Exactly one year ago, then-Attorney General Jeff Sessions stoked fears in the marijuana industry by rescinding an Obama-era Justice Department memo that encouraged federal prosecutors to generally not interfere with state cannabis legalization laws.

But in the year since, the government has not launched a crackdown, five more states legalized cannabis in some form—with Vermont lawmakers voting to do so on the very same day Sessions made his move—and federal prosecutions for marijuana-related offenses during the 2018 fiscal year, which ended in September, declined by almost a fifth.

While the Obama guidance, known as the Cole memo, provided the legal industry with some sense of comfort, advising U.S. attorneys to exercise discretion and enforce federal law in a limited number of circumstances, its rescission hasn’t halted the progress of the reform movement. If anything, Sessions’s decision to do away with the document seems to have emboldened marijuana-friendly lawmakers at the state and federal levels.

In Congress, an outpouring of condemnation and vows to protect legal states against federal interference followed last year’s announcement. Sen. Cory Gardner (R-CO) went so far as to threaten to block Justice Department nominees unless the Trump administration committed to grant states the autonomy to set their own cannabis policies. And later in the year, he got the president’s backing on a bipartisan bill to exempt legal states from federal marijuana enforcement under the Controlled Substances Act.

“I don’t know what Jeff Sessions’s intentions were when he rescinded the Cole memo, but strictly from a cannabis policy reform standpoint it really helped to advance the ball,” Neal Levine of the Cannabis Trade Federation told Marijuana Moment. “He started a chain reaction that directly led to the STATES Act, a bipartisan piece of legislation that addresses the majority of the issues the cannabis industry faces and is supported by the president. We now have a real opportunity to pass game-changing legislation into law in during this Congress.”

Mason Tvert, a spokesman for the Marijuana Policy Project, called the Cole memo repeal “more like thunder than lightning.”

“It spooked a lot of businesses, investors, and elected officials and elicited responses that had real-world ramifications,” he said. “But it did not actually strike a direct blow to the industry. Business deals fell through, banks may have shied away from providing services, and governments slowed their pace of adopting reforms, but ultimately there was never any noticeable change in federal enforcement of marijuana prohibition laws. The industry and the reform movement have continued to advance and still made significant strides in the 12 months that followed.”

There seems to be a consensus among leading marijuana policy reform advocates that Sessions’s move, even if it had negative short-term financial implications for some businesses, ended up inadvertently helping to advance the legalization agenda in the long term.

“I think that [the rescission] certainly backfired and had some unintended consequences for Mr. Sessions in that any real change that came out of the rescission of the memo arguably was supportive of the industry and that it really galvanized support for states’ rights and marijuana reform at the federal level in Congress in a way that we’ve really never seen before,” Aaron Smith, co-founder and executive director of the National Cannabis Industry Association, said in a phone interview.

“I’m sure that was not the intent, but I think what it did was it really created a situation where members of Congress on both sides of the aisle, particularly Republicans, were forced to take sides because there was a real threat. They look at the same polling numbers we look at, they know that this is an increasingly popular issue and, for the most part, came out in support of states’ rights.”

It’s also worth noting that the Justice Department, which remains largely operational in spite of the federal government shutdown, has so far declined to interfere in state-legal medical marijuana activities—even though a rider blocking the agency from spending money for such enforcement has expired for now.

Of course, Trump’s new attorney general nominee, William Barr, could always direct the agency to adopt a more intensive enforcement protocol, but there haven’t yet been any signals that he considers federal marijuana prohibition a priority.

All told, the post-Cole memo world might have left federal prosecutors without explicit guidance, but the sky hasn’t fallen and the legalization movement marches on—by most accounts stronger than ever.

Federal Marijuana Prosecutions Are Dropping In Era Of Legalization, Chief Justice Reports

Photo courtesy of Gage Skidmore.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

Politics

After New Mexico Lawmakers Fail To Pass Marijuana Legalization, Governor Says Voters Could Decide

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Marijuana legalization failed to happen legislatively in New Mexico this year, but now Gov. Michelle Lujan Grisham (D) says she’s open to letting voters decide on the policy change.

A bill to legalize cannabis in the state advanced through one Senate committee last month, but it was rejected by another with just days left in the legislative session, which ended on Thursday. When lawmakers reconvene in 2021, the governor said it’s possible the legislature will pursue the reform move through a constitutional amendment that would be referred to voters at the ballot box.

Lawmakers would still have to vote in favor of advancing such a proposal to get it on the ballot, but it may be more palatable to some to let voters make the ultimate decision on whether to legalize marijuana in the state.

“We could,” Grisham said on Thursday in response to a question about whether the state could pursue a constitutional amendment to legalize. “I mean, I’m open to any number of pathways.”

She added that brining advocates and experts to the table while crafting a “regulatory design” for a cannabis market is an “incredibly transparent” process, but it also means “you get a lot of questions about how it works.”

“Overwhelmingly in every county, New Mexicans believe that that’s a productive economic path forward,” the governor said. “My job is to keep with them, making the case and trying to the best of our ability to answer any question, deal with any conflicts and to make sure that when we do anything, our expectation is that New Mexico does it the best and that we set aside and move aside by addressing them, any unintended consequences or potential risks.”

Listen to the governor’s remarks on a potential marijuana legalization constitutional amendment below: 

“I’ll probably do a little of both, and I have no doubt that the legislators will do that as well,” she said.

A constitutional amendment to legalize marijuana was approved by a Senate committee in 2015, but it did not advance further. It was reintroduced the next year, but it didn’t get a committee vote.

Grisham, who was elected in 2018, has made clear that cannabis reform is a legislative priority, including legalization in her 2020 agenda. She also discussed the need to establish a well-regulated and equitable marijuana market during her State of the State address last month.

The House of Representatives passed a bill in 2019 to legalize marijuana and let state-run stores control most sales. The proposal later advanced through one Senate committee but did not receive a floor vote. Lujan Grisham did sign a more limited bill to simply decriminalize marijuana possession that lawmakers approved during that session, however.

After legalization failed to advance last year, the governor established a working group to study the issue and make recommendations.

Following a series of hearings, the panel released a report in October that said any legalization bill should include automatic expungements of past records and provisions to ensure equity in the industry for communities most impacted by the war on drugs. It also said that home cultivation of marijuana by consumers should either be prohibited or licensed by the state.

In December, the governor’s working group released a poll showing overwhelming public support for cannabis legalization.

Kentucky House Approves Medical Marijuana Legalization Bill

Photo courtesy of Mike Latimer.

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House Candidate Gives Marijuana To Voters At ‘First-Ever Congressional Weed Party’

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“Get your blunt!” Illinois Democratic congressional candidate Anthony Clark tells a voter in a newly released campaign video. “We’re having a pretty dope day party.”

Ahead of the state’s March 21 primary election, Clark, an Air Force veteran and special education teacher in Chicago, has made marijuana a key campaign priority. On Thursday, he released a video shot at what he’s calling the “first ever congressional weed party in Chicago.”

“We just wanted to do something different,” Clark explains in the video. “I feel like we’re all out here in the struggle, we’re all out here living, we’re all out here grinding on a daily fucking basis.”

Clark has said that he first experimented with marijuana in high school but rediscovered it as an adult after being injured in a Seattle shooting. “Weed has literally saved my life. I’m a veteran with PTSD,” Clark says in the video. “It’s time we changed this narrative that exists, eliminate the stigma.”

Adult-use cannabis sales have been legal in Illinois since January 1.

“We’re gonna celebrate that, but there’s still a ways to go,” Clark tells party attendees, a blunt in one hand and a shot glass in the other. In Illinois, he adds, public funds are still be spent on “jailing street dealers…who are predominantly black and brown in the poor communities.”

Clark’s candor around his own cannabis use appears to have helped his campaign against incumbent Rep. Danny Davis (D), who’s held the seat for the predominantly black district since 1997. Earlier this month, the Chicago Sun-Times endorsed Clark over Davis, saying the district “deserves a representative who is impatient to change the world, which might be Clark’s best trait.”

In a separate campaign video released in November, Clark smoked marijuana on camera and said he’s transparent about his cannabis consumption because “if we really want to make change and we have a platform, you just have to be courageous with your platform.”

“I think I have to be just as open about my cannabis use because lying to individuals, I think, plays a direct role in enabling status quo, in enabling the oppressors, the top one percent, to remain,” he added.

Some supporters say it was Clark’s bold stance on cannabis that first got them involved in the campaign. “I first heard about Anthony Clark on Facebook,” one supporter, identified as Miriam, says in the new video, “and I seen him and a group of three people smoking a blunt.”

“It’s ending the stigma,” she says. “It’s ending the harsh stigma.”

Clark ran for the same congressional seat two years ago. He earned 26% of the primary vote but lost to incumbent Davis, who has generally supported cannabis amendments in Congress but hasn’t made the issue a key focus for his office. This year observers expect the challenger to do even better on primary day.

Much has changed in the state since 2018, after all, especially around cannabis. Last year Illinois became the first U.S. state to legalize adult-use sales through its legislature, and state officials so far have been broadly supportive. A day before marijuana became legal, Gov. J.B. Pritzker (D), who made legalization a part of his own election campaign, pardoned more than 11,000 people with low-level cannabis convictions. When stores opened, Lt. Gov. Juliana Stratton (D) was one of the first in line to buy edibles.

At his State of the State address last month, the governor said legalization “gives us a chance to collect tax revenue from the residents of Wisconsin, Missouri, Iowa and Indiana” and provides “a second chance to hundreds of thousands of people who had a low level cannabis conviction or arrest on their record.”

Licensed marijuana stores in Illinois sold $40 million worth of recreational marijuana products during the first month of legal sales. State officials say $8.6 million of that came from out-of-state cannabis tourists.

Congressional Candidate Smokes Marijuana And Talks Legalization In Campaign Video

Photo courtesy of Facebook/Anthony Clark

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Federal Reserve Sends Reminder That Hemp Businesses Can Get Bank Accounts

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A Federal Reserve Bank district is making clear that financial institutions no longer have to automatically treat hemp businesses as suspicious under reporting rules.

In a post on the St. Louis Federal Reserve Bank website, the institution clarified that since hemp was federally legalized under the 2018 Farm Bill, banks no longer have to file suspicious activity reports just because a business transaction involves the crop.

“Properly licensed industrial hemp producers can now be treated the same as other bank commercial customers for anti-money-laundering regulatory purposes,” the notice published this month states.

However, it reiterated that marijuana transactions will continue to be flagged, as the intoxicating variety of the cannabis plant remains federally prohibited.

“Unlike marijuana, hemp contains very low levels of tetrahydrocannabinol (THC), the chemical that causes an altered state when ingested or smoked. Hemp that contains less than 0.3 percent THC is considered legal,” Carl White, the senior vice president of the Supervision, Credit, Community Development and Learning Innovation Division at the Fed district, wrote. “The legal marijuana business is not affected by the change in status for hemp production, because marijuana is still considered a controlled substance under federal law.”

But as others have recognized, the central bank district said that despite “the change in the legal treatment of hemp, many bankers have been reluctant to work with the industry because of regulatory concerns.”

To that end, the the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network (FinCEN) issued guidance last year clarifying that “banks are not required to file a Suspicious Activity Report (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations.”

Even so, it is apparent that some financial institutions remain reluctant to bank hemp businesses, and so the Fed is seeking to put them at ease with the new explanatory post.

“The main takeaway from the regulators’ statement is that banks no longer need to automatically fill out Suspicious Activity Reports (SARs) when working with a hemp producer customer because hemp production has been legalized,” the St. Louis-based bank said in the new post. “They can follow standard procedure and file a SAR if suspicious activity warrants.”

“Bankers with questions about the 2018 farm bill and hemp can contact the USDA, state agriculture departments or tribal governments. Because the U.S. Food and Drug Administration retains some regulatory authority over hemp products, banks can contact that agency with questions about hemp-related food, drugs or cosmetics.”

The post notes that “banks should be looking out for additional guidance” on federal hemp rules from financial regulators. It’s not clear when that will be issued, however.

While marijuana policies remain complicated given federal prohibition, there is significant interest among Federal Reserve Bank districts in ensuring that those rules are clarified as well. The presidents of three such institutions called for guidance on marijuana banking last year.

The Federal Reserve Bank Of Kansas City also recently issued a report on Colorado’s cannabis market and determined that it would continue to grow as support for legalization rises, though it may not grow as fast as it initially did immediately following legalization.

Twelve GOP Lawmakers Thank Senate Chairman For Delaying Marijuana Banking Bill

Photo courtesy of Pixabay.

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