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Sessions Memo: Release the Krakens

By Mark Goldfogel

Attorney General Jeff Sessions’ decision to eradicate the four memos that stood as the legal foundation of the cannabis industry is somewhat shocking and certainly worthy of comment.  Opinions of my friends in the industry would lead me to believe that this may spark the rebellion to end marijuana prohibition once and for all. I tend to agree.

The attorney general’s decision to reverse the memos which allowed states to develop regulated programs invalidates the programs, but not the industry. His decision seems to place enforcement in the hands of state district attorneys who would be empowered to decide on a case by case basis. It turns the industry into a giant game of Whack-A-Mole.

The legitimate cannabis entrepreneur’s motto of “We will build the most compliant operation” has evolved into “Don’t get caught.”  Most of the infrastructure to grow, process, and sell cannabis has been built by the effort of 30 states including D.C., 45 if you include hemp.

Seed-to-Sale tracking has gone from being fully validating to fully incriminating. One subpoena to any Seed to Sale software provider would chill the industry overnight. Nobody thinks that is likely to happen, but few anticipated Sessions’ memo move. Is his true goal to eliminate the industry or to foster wild unrestricted growth?

It is entirely possible that “Don’t get caught” as a model for doing business will lead to an even larger boom for the industry than following the no longer relevant Cole guidelines. The gray market will flourish. The green market will continue to follow state guidelines and hope for the best while it supplies even more product to a new secondary grey market. If the goal of the administration was unrestrained industry growth, they have succeeded.

I also believe that Jeff Sessions’ decision to eradicate the memos will prompt state legislators to pass of the Secure and Fair Enforcement (SAFE) Banking Act of 2017. In a previous blog I posted that Texas Representative Pete Sessions was the key holdout in having this bill’s previous version come to a vote.  One problem is that banking and all legitimized cannabis activities are predicated on guidelines outlined in the memos that are no longer relevant. The word paradox has never been more apt, and I live here.

The AG’s decision to eradicate the Cole guidelines may do for the cannabis industry what eliminating environmental requirements is doing for the development of natural resources.  Until we have a new administration, this industry is going to grow with reckless abandon and irrational exuberance. “Don’t get caught” will compete with “compliant” with very little legal consequence.  Consumers in every state, legal or illegal, will have unprecedented access to every make, model and shape of cannabis. The most widespread distribution of cannabis will continue to be oils that are nearly untrackable, extremely valuable and can be modified into everything from vape pen juice to chewables.

The industry does not even seem fazed by the core foundation of the industry being revoked in a memo. Why?  Because the core foundation of the industry resides in millions of people enjoying the liberty of consuming this plant for countless reasons. Their access just became notable in quality and quantity and largely unregulated. For those states with no legal cannabis program, more grey market weed is headed your way, regardless of the state it was grown in.

The courts will be overwhelmed trying to distinguish between state licensed, medical, caregiver, and drug dealer. The Justice Department may continue to reap a bounty in raid seizures, but there won’t be many convictions.

Just imagine how successful the Smokey character was in the cult movie Smokey And The Bandit.  A pound of weed can profit you $4k for driving across country. A gallon of cannabis oil could be over $20k.

If unmitigated widespread growth of the cannabis industry was the intention of Jeff Sessions, he did an amazing job. Weeds grow best when untended.

Mark Goldfogel

Mark Goldfogel

Mark Goldfogel is an entrepreneur, consultant, writer, and speaker. He is credited with having first proposed “Seed to Sale Tracking” as a means of diversion control, taxation, and health and human safety to the State of Colorado. He co-founded the cannabis industry’s first compliance inventory control system and was a key advisor to The Fourth Corner Credit Union, a financial institution with a banking charter to support the “Hemp and Cannabis Movement.” He has advised States, non-industry companies wishing to enter the industry, and startup companies capitalizing on the opportunities and avoiding the potholes of the budding cannabis industries. For a free copy of his book, Smoking Something, The Cannabis Paradox10, (Amazon $24.20) please send an email to [email protected].

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