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January 4, 2018 – FOR IMMEDIATE RELEASE
Comments on January 4, 2018 US DOJ Decision Announcing the Rescinding of the ‘Cole Memorandums’
Since it remains undisputedly illegal under Federal law, the state-licensed legal marijuana industry currently primarily operates under a presumption of prosecutorial forbearance and perceived rather than actual risk.
The Cole Memo is a 'feel-good' US Dept of Justice guidance that does not actually restrain local US AGs from enforcement but sets Dept priorities with regard to marijuana, e.g., sales to minors or diversion of product out of state. The Rohrbacher-Blumenauer budget amendment (which prohibits use of federal funds for DOJ enforcement of federal marijuana laws against state-sanctioned medical marijuana licensees) is likely to be renewed at the end of January.
However, it is politically unfeasible and therefore unlikely that it will be upgraded to include 'recreational/adult-use' licensees, setting up the possibility of battles between legal states and the federal government.
Nonetheless, the 'genie is out of the bottle' for this industry, especially in light of now-historical evidence of substantial generated tax revenue and there's no turning back. It is inevitable that there will be casualties, speedbumps and hiccups as this industry grows up, and this is an example.
Given that much of industry confidence is based on the perception of (as opposed to actual) risk, this development will undoubtedly have an at least temporary chilling effect particularly on new investment and banking.
However, it is also likely to drive marijuana-related businesses to higher levels of accountability and compliance, making their businesses less susceptible to targeted enforcement and overall more sustainable in the long run and this would be a positive outcome.
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