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Jeff Sessions Waives Sword of Damocles
By Steve Schain
With Jeff Sessions threatening to singlehandedly crush $7.2 billion legalized marijuana industry spanning 30 states, generating millions in taxes and providing 10 of thousands of jobs, much confusion abounds.
While unclear if merely a “knee jerk reaction” to California program’s launch breadth of coverage, unless and until the United States Department of Justice (“Justice Department”) provides an official statement, publication, or other specific information, neither legalized marijuana’s current status – nor the Federal Government lack of Congressional mandate or funds to derail state programs – has changed.
The Comprehensive Drug Abuse Prevention and Control Act of 1970 prohibits marijuana’s manufacture, distribution, dispensation and possession and lists it next to heroin as a Schedule I controlled substance having “a high potential for abuse” for which there’s “no currently accepted medical use in treatment”.  21 U.S.C. §§ 801, Et. Seq (1970).  Those manufacturing, distributing, or dispensing marijuana, or touching it at some point along the supply chain (ex., planting, cultivating, harvesting, processing/extracting, testing, packaging, disposing, transporting, and dispensing), are deemed “Plant-Touching” Marijuana Related Businesses (“MRBs”).  Id.; “FIN-2014-G001: BSA Expectations Regarding Marijuana-Related Businesses,” FinCEN, February 14, 2014.
Presently, 30 States, the District of Columbia and the Commonwealths of Guam and Puerto Rico have legalized marijuana programs protected from federal interference by the Rohrabacher-Farr Amendment which, in turn, incorporates the Justice Department’s “Cole Memorandum” Policy.
Originally passed as an attachment to the Commerce, Justice, and Science Appropriations bill for fiscal year 2014, repeatedly renewed, and commonly known as the known as Rohrabacher- Blumenauer Amendment, the law prohibits the Justice Department from using federal funds to prevent certain states “from implementing their own State laws that authorize the use, distribution, possession or cultivation of medical marijuana.”
The Rohrabacher- Blumenauer Amendment incorporates the findings of Justice Department “policy clarifying” memoranda restraining U.S. Attorneys’ CSA enforcement in legalized marijuana states (hereinafter, collectively referred to as “Cole Memorandum”).  While reiterating marijuana’s CSA illegality, the Cole Memorandum instructs focusing federal resources on “most significant threats in the most effective, consistent, and rational way” listing “8 enforcement priorities” of preventing: distribution of marijuana to minors; marijuana sale revenue going to criminal enterprises, gangs, and cartels; diversion of marijuana from states where it is legal under state law in some form to other states; state-authorized marijuana activity from being used as a cover or pretext for trafficking of other illegal drugs or other illegal activity; violence and use of firearms in marijuana’s cultivation and distribution; drugged driving and exacerbation of other adverse public health consequences associated with marijuana use; growing of marijuana on public lands and attendant public safety and environmental dangers posed by marijuana production on public lands; and marijuana possession or use on federal property.
Impact if Cole Memorandum is Rescinded
If the Justice Department rescinds the Cole Memorandum, nothing will change.
The $7.2 billion legalized marijuana industry spanning 30 states, generating millions in taxes and providing 10 of thousands of jobs will continue and the Federal Government will lack both the Congressional mandate and funding to use Federal resources to derail state programs
If the Cole Memorandum is rescinded, Congress may be forced to strengthen the spending restrictions governing the Justice Department surrounding cannabis when its enacts its new budget.  While not necessarily changing the status quo necessarily, it may increase the ambiguity as to what comprises full compliance with state laws.
Steven SchainSteven Schain

Steven Schain

2019 National Law Journal “Finance, Banking, & Capital Markets Trailblazer” award winner, Steve Schain is Senior Counsel at Smart-Counsel, LLC, a 100% female owned boutique Cannabis law firm.  Steve  represents entities, governments and individuals in litigation, regulation and compliance, financial services, license applications and entity formation. Reach Steve at [email protected]

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