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 The action by Attorney General Jeff Sessions could have damaging
consequences for the burgeoning marijuana industry in the six states
including California and Colorado that have legalized the drug for
recreational use, plus dozens of others that permit medicinal use.
Justice Department officials declined to say whether they might take
legal action against those states, saying further steps were "still
under consideration."
Federal law still prohibits marijuana even as some states move to
legalize it. White House spokeswoman Sarah Sanders said President
Donald Trump's top priority was enforcing federal law "whether it's
marijuana or immigration."
The policy change, detailed by Sessions in a one-page memo to
federal prosecutors nationwide, came three days after California
formally launched the world's largest regulated commercial market
for recreational marijuana.
The administration's action drew condemnation from marijuana
legalization advocates and politicians in both parties in states
where the drug has been legalized. They said it trampled on the
rights of voters in those states and created uncertainty about how
strictly federal drugs laws will be enforced.
The move raised questions about how it might impact tax revenues in
states that permit some form of legal marijuana use. It also created
uncertainty for banks, already fearful about business relationships
with the marijuana industry because of concerns they might run afoul
of anti-money laundering rules.
There has been a surge in legalization of marijuana at the state
level in recent years. Other states that permit the regulated sale
of marijuana for recreational use include Washington, Oregon,
Alaska, and Nevada. Massachusetts and Maine are on track to do so
this year.
The policy put in place under Democratic former President Barack
Obama, outlined by then-Deputy Attorney General James Cole in a
series of memos, had discouraged federal prosecutors from pursuing
marijuana-related criminal cases in states that had legalized the
drug.
Sessions said in a statement that the Obama-era policy "undermines
the rule of law" and told federal prosecutors in his memo to "follow
the well-established principles that govern all federal
prosecutions" in deciding which marijuana-related activities to
prosecute.
Some prosecutors in legalization states issued statements on how
they would proceed. A U.S. attorney in Colorado said he would not
change his approach toward marijuana prosecutions, while a U.S.
attorney in Massachusetts said he would pursue federal marijuana
criminal cases.
The Trump administration's action seemed incongruous with comments
that Trump, a Republican, made during the 2016 presidential
campaign. Trump told a TV news reporter that the decision to
legalize marijuana should be left "up to the states."
'DEFIES FACTS AND LOGIC'
California Lieutenant Governor Gavin Newsom, a Democrat, said his
state will pursue "all legal, legislative and political options to
protect its reforms and its rights as a state." He said the Trump
administration's position "defies facts and logic."
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Republican Senator Cory Gardner of Colorado said on Twitter that the
administration's action "directly contradicts what Attorney General
Sessions told me prior to his confirmation."
Gardner said he would take all steps necessary to fight the measure,
including possibly holding up the Senate from voting on pending
Justice Department nominees.
The Obama-era policy recognized marijuana as a "dangerous drug," but
said the Justice Department expected states and localities that
authorized various uses to effectively regulate and police it.
Among companies that have invested in the industry, Scotts Miracle-Gro,
a gardening product manufacturer, has spent hundreds of millions of
dollars to acquire companies that sell soil, lighting, fertilizer
and other products to marijuana growers. Shares in the company
closed down about 2.3 percent. Several Canadian marijuana-related
stocks also fell.
Marijuana startup companies said they were now bracing for a
deceleration in funding.
"In the short term, this news will further scare away investors,
which will, in turn, slow down cannabis entrepreneurship," said
Nicolas Ruiz, co-founder of Cloudponics, a San Francisco startup
whose technology can be used to grow marijuana.
Funding for such startups has been on an upswing since Colorado's
legalization of recreational marijuana use in 2014. Since then, the
industry has amassed nearly $1.3 billion in equity funding for
marijuana startups, with more than $600 million in 2017 alone,
according to research firm CB Insights.
The Sessions memo did not distinguish between enforcement against
marijuana used for recreational versus medicinal purposes. But his
department's ability to pursue criminal charges related to medicinal
marijuana remains in doubt.
Since 2014, federal lawmakers have attached language to spending
legislation that explicitly bars the Justice Department from
spending resources to enforce cases in states where medicinal
marijuana is legal.
(In 20th paragraph, corrects to say cannabis industry has raised
nearly $1.3 billion in equity funding, not private equity funding.)
(Reporting by Sarah N. Lynch; Additional reporting by Susan Heavey
in Washington and Salvador Rodriguez in California; Editing by Will
Dunham)
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Trump
administration drops Obama-era easing of marijuana
prosecutions
