Pubdate: Thu, 04 Jan 2018
Source: Los Angeles Times (CA)
Copyright: 2018 Los Angeles Times
Authors: Evan Halper, Joseph Tanfani and Patrick McGreevy



Atty. Gen. Jeff Sessions ended an Obama-era federal policy that
provided legal shelter for marijuana sales in California and five
other states that have allowed recreational pot, placing at risk
thousands of marijuana businesses operating legally under state laws.

The Justice Department move on Thursday plunged California's fledgling
recreational pot market into further uncertainty, and was met with a
bipartisan backlash from lawmakers in states where marijuana is now
sold legally to any adult who wants to buy it.

"It is the mission of the Department of Justice to enforce the laws of
the United States," Sessions said in a statement, which added that the
Obama-era policy that directed federal prosecutors not to target state
marijuana businesses "undermines the rule of law and the ability of
our local, state, tribal, and federal law enforcement partners to
carry out this mission."

States that have legalized girded to fight.

"In California, we decided it was best to regulate, not criminalize,
cannabis. Unlike others, we embrace, not fear, change," Atty. Gen
Xavier Becerra said. "After all, this is 2018 not the 20th century. At
the California Department of Justice we intend to vigorously enforce
our state's laws and protect our state's interests."

Lt. Gov. Gavin Newsom tweeted on Thursday: "Have no doubt -- California 
will pursue all options to protect our reforms and rights."

With the California industry expected to generate up to $7 billion
eventually, the Justice Department announcement was likely to chill
potential investors in the state's pot market, industry leaders predicted.

But California's state Bureau of Cannabis Control, which on Monday
began processing hundreds of applications for businesses seeking to
legally grow, transport and sell marijuana. showed no sign of slowing
after Sessions' announcement.

The bureau's chief, Lori Ajax, vowed to continue issuing permits
"while defending our state's laws to the fullest extent."

Legally, California and other states can't prevent the federal
government from enforcing federal drug laws. "There is nothing that I
can see the state attorney general could possibly do to preclude a
marijuana prosecution under federal law," said industry attorney Aaron
Herzberg. He said the U.S. Supreme Court has ruled on the matter. "The
federal supremacy clause governs."

Politically, however, officials in states that have legalized pot feel
they're on stronger ground, given the growing public acceptance of
legalized marijuana and the sheer scale of the rapidly expanding
legalized industry.

Sessions notably did not order federal prosecutors to begin a
stepped-up assault on marijuana, instead saying he would leave the
decision up to each of the country's 93 U.S. attorneys. That approach
could lead to vastly different federal law enforcement from state to
state or even within larger states that have several U.S. attorneys'
offices. California, for example, has four.

The attorney general has, however, expressed specific concerns about
marijuana policies in California. In a remark after a news conference
last month, for example, he said he was disturbed about California's
role as a pot-exporting state, noting that much of the state's crop
ends up on the black market.

Whether federal prosecutors have the resources, or even interest, to
thwart the national movement toward more permissive cannabis
regulation remains to be seen. The move on Thursday to rescind the
Justice Department's so-called "safe-harbor" policy, however, is
certain to spread anxiety throughout the multibillion-dollar pot business.

In California, a spokesperson for the U.S. attorney in Sacramento said
the office "will evaluate violations of [federal] laws in accordance
with our district's federal law enforcement priorities and resources."
A spokesman for the U.S. attorney in San Francisco largely echoed that
statement, adding that the office will work with "state, local, and
federal law enforcement and allocate resources accordingly."

The U.S. attorney's office in San Diego went a step further, issuing a
statement saying Sessions' decision "returns trust and local control
to federal prosecutors in each district when it comes to enforcing the
Controlled Substances Act."

Thom Mrozek, a spokesman for the U.S. attorney in Los Angeles, said he
did not have any specific comment about whether the office would
change its policy toward marijuana prosecutions.

Six states have legalized recreational use of marijuana: California,
Oregon, Washington, Nevada, Colorado and Alaska. Voters in Maine and
Massachusetts have also approved legalization measures, but they have
not taken effect.

A much larger group, 29 plus the District of Columbia, have legalized
marijuana for medical purposes. The new Justice Department policy does
not put medical marijuana at risk in the same way as recreational pot,
at least for now.

A law passed by Congress strictly limits the federal government from
interfering with medical marijuana sales. The 9th Circuit Court of
Appeals, which has jurisdiction over federal cases in California and
eight other western states, has interpreted that law to bar any
prosecutions in medical pot cases.

Sessions has sought to have the federal ban lifted, and Justice
Department officials suggested their new policy could be extended to
threaten medical pot, as well, if the law changes or if the 9th
Circuit's interpretation is overturned. They left unclear whether they
might pursue prosecutions of medical pot in states outside the 9th
Circuit's jurisdiction.

One of the authors of the federal law, Rep. Dana Rohrabacher (R-Costa
Mesa), said Thursday that Sessions "has just delivered an extravagant
holiday gift to the drug cartels."

"By attacking the will of the American people, who overwhelmingly
favor marijuana legalization, Jeff Sessions has shown a preference for
allowing all commerce in marijuana to take place in the black market,
which will inevitably bring the spike in violence he mistakenly
attributes to marijuana itself," Rohrabacher said.

Justice Department officials said the policy reversal won't
necessarily mean a rush of new marijuana prosecutions. But they made
clear their intent was to end the safe harbor for the industry to
operate in and increase the level of unease for growers and dispensary
owners -- along with anyone who does business with them.

When asked whether the new policy could mean trouble for banks that
deal with marijuana businesses, for example, a senior Justice
Department official who briefed reporters on condition of anonymity
said: "It's clear aE& that certain banking activities that relate to
marijuana are against federal law."

"I can't say where it will or won't lead to more prosecutions," the
official said, referring to the new policy. "We believe that the U.S.
attorneys' offices should be opened up to bring all the cases that
need to be brought."

Hilary Bricken, an attorney who represents a range of businesses in
the marijuana industry, said that leaving the policy up to each U.S.
attorney had eliminated any clarity on the law. As the marijuana
industry braces for "varied and selective" enforcement, business
owners would need to learn where their local U.S. attorney stands on
marijuana issues, she said.

"Some of them are going to be drug warriors. Others are not going to
be concerned with this," Bricken said.

The picture will be even more complicated in many areas because Trump
has not yet nominated U.S. attorneys in many districts. So far, 46
U.S. attorneys have been nominated and confirmed, meaning that about
half the offices nationwide are led by interim appointees.

One leading Republican senator threatened Thursday that confirmation
of future nominees will be at risk if Sessions persists in his
anti-marijuana effort.

"What happened today was a trampling of Colorado's rights, its
voters," Sen. Cory Gardner (R-Colo.) said in a Senate floor speech in
which he angrily accused Sessions of going back on commitments to
respect the will of voters in states that have chosen to legalize.

"I will be putting today a hold on every single nomination from the
Department of Justice until Atty. Gen. Jeff Sessions lives up to the
commitment he made to me," declared Gardner, who is a member of the
Senate's Republican leadership.

The top federal prosecutor in his state, U.S. Atty. Bob Troyer, said
Thursday that his office won't be changing its approach to pot cases.
He would continue to focus on "identifying and prosecuting those who
create the greatest safety threats to our communities around the
state," Troyer said.

The Obama administration put its policy in place in response to the
legalization of recreational marijuana in Colorado and Washington
state. Those rules had prevented federal prosecutors from targeting
marijuana businesses operating legally under state law and allowed the
recreational cannabis trade to bloom in the states where voters have

Sessions began signaling long ago that a crackdown was coming, but
pro-marijuana lawmakers and regulators had responded with defiance,
declaring that legalization was so far along that there was little the
Department of Justice could do to stop it.

His anti-pot crusade, however, has been at odds with the more
laissez-faire stance of President Trump. Trump said unequivocally
during his presidential campaign that he opposes a crackdown on
recreational marijuana, saying the issue of legalization should be
left to individual states.

Gardner posted on social media Thursday the segment of a news
interview in which Trump said as much.

The difference in positions raises the question of whether the White
House would back the Justice Department if federal marijuana
prosecutions ramp up dramatically.

Marijuana legalization is more popular than it has ever been, with a
recent Gallup poll finding it is favored by 64% of Americans. It has
majority support across party lines, even among Republicans for the
first time ever, the polling indicates.

Yet the announcement by Sessions puts the fledgling marijuana industry
in a defensive crouch. Marijuana businesses were already struggling to
navigate untested state regulations and the challenge of finding
insurance and banking businesses willing to risk working with them.

"While dismantling the industry will prove impossible, the move by
Sessions will create more uncertainty in an industry that already has
its fair share of risks and unknowns," said Chris Walsh, vice
president of Marijuana Business Daily. "We certainly could see some
types of regional crackdowns."

Groups that oppose legalization agreed that the Justice Department was
unlikely to shut down the commercial pot trade. But they welcomed the
prospect of creating new problems for it. Kevin A. Sabet, head of the
anti-legalization group Smart Approaches to Marijuana, expressed hope
the policy change "will slow down the rise of Big Marijuana and stop
the massive infusion of money going to fund pot candies, cookies, ice
creams, and other kid-friendly pot edibles. Investor, banker, funder

Civil rights groups had a different take. The ACLU warned federal
prosecutions "will have a disproportionate and disastrous impact on
people of color," who use pot at similar rates than whites, but have
historically been far more likely to be prosecuted for it.

Sarah Armstrong, director of industry affairs for Americans for Safe
Access, which advocates for legal access to cannabis for therapeutic
use and research, said the Justice Department announcement was "really
very upsetting and scary for patients who don't know, when they walk
in the door, if there's going to be a raid."

Even a crackdown solely on recreational marijuana could jeopardize
medical users, Armstrong said, because many dispensaries will be
serving both patients and other customers.

The 2013 policy which Sessions will rescind is known as the "Cole
memorandum," named after former deputy attorney general James Cole. It
had provided clarity not just to marijuana businesses and users, but
also to state and local law enforcement agencies, which now could find
themselves working at cross purposes with their federal
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