legalization Archives - Page 2 of 2 - Green Market Report

Michael CooperMichael CooperMay 10, 2018


In recent days, it seems the dam has broken and a string of positive developments have materialized for marijuana reformers—welcome news to the legal marijuana industry, the voters who supported it, and the local communities relying on it for new tax revenues.  But given the structure of anticipated reforms—and the history of the implementation of prior reforms—the path ahead is unlikely to be smooth.

On April 26, the most recent Quinnipiac poll showed that 74% of American voters now support a bill that would protect states’ legal medical and adult-use marijuana markets.  That exceeds even the 63% of voters who favor national legalization, a Quinnipiac polling record.

Needless to say, keeping the federal government out of state marijuana policy is a popular position.  And that 74% of the voting population appears to be on the cusp of getting its wish:  On April 13, Republican Sen. Cory Gardner reached a deal with President Donald Trump to secure the president’s support for a comprehensive “federalism-based legislative solution” to the interlocking federal prohibitions and penalties on cannabis activity.

Those prohibitions have long been the legal sword of Damocles hanging over the cannabis industry.  Indeed, it was only January 2018, when Attorney General Sessions withdrew the federal enforcement guidance under which the industry had flourished, injecting a fresh dose of uncertainty to an industry that had long warily eyed the nation’s chief law enforcement officer with a famous antipathy for marijuana.

But it is not merely the threat of federal prosecution for state-licensed conduct that hangs over the industry.  As industry members know well, the federal prohibitions on marijuana also result in the denial of a number of services and benefits that other small businesses take for granted, from banking access to tax deductions.

As a result, if the promised bill comes to fruition, life should become significantly easier for the small businesses at the vanguard of this industry.

But lurking in the background of the forming consensus around a “federalism-based” fix is a major question:  How would this actually work in practice?

In fact, history suggests that progress will be more fitful than supporters hope—leaving certain avenues of attack open to aggressive anti-marijuana prosecutors fighting a rearguard action.

At the core, the defining characteristic of any federalism-based solution for cannabis is likely to be a differential treatment for individuals who undertake certain marijuana-related activity (e.g., cultivation) in compliance with state law versus those in states that have not authorized that conduct.  Such an approach provides “hands-off” treatment to law-abiding participants in regulated state markets while retaining a role for the federal government in combating criminal interstate (and international) cartels involved in supplying the unregulated black market.

How marijuana businesses wind up classified in one bucket (“state-legal”) or the other (“illegal black market”) is where the rubber will meet the road.  Because while the concept that operating in conformance with a state-regulated marijuana program will immunize individuals from prosecution is simple enough, participants in the marijuana industry will not be in the clear yet.

An initial consideration is regulatory volume.  States have enacted hundreds of pages of regulations for marijuana businesses to follow covering everything from security to pesticide use.  And those regulations are not static.  States continue to revise and tweak their cannabis rules and what sufficed in January may not be enough come February.  As a result, it is very possible for operators to unwittingly, or temporarily, fall out of compliance with their state laws despite ongoing attempts to “get it right.”

In addition, some rules are inherently subjective.  For example, states have banned marketing that would appeal to minors, an essential regulatory goal.  But while some promotional content would clearly appeal to minors, there will always be marginal content about which reasonable people can disagree.  Here, that disagreement could open the door to federal prosecution.

To be sure, that federal law enforcement may take a narrow view of legislative cannabis protections is far from hypothetical.  Another piece of recent positive news for marijuana law reformers was Congress’s reauthorization in the March 2018 budget bill of an appropriations rider that prohibits the DOJ from spending funds to prevent states from implementing their medical marijuana programs.

When Congress first enacted the rider in 2014, federal medical marijuana defendants sought to force the DOJ to drop their prosecutions.  After all, they argued, Congress had expressed a desire to withhold funding for attacks on state medical marijuana programs.  In response, the DOJ contended that the prosecutions could continue because Congress had only protected the states, not the individuals who participated in those states’ programs.  In 2016, the US Court of Appeals for the Ninth Circuit ruled in favor of the defendants, rejecting that argument.

But the court only enjoined the prosecution of individuals who strictly complied with state programs.  That distinction is far from academic.  In fact, as recently as April 2018 in a follow-up case, the Ninth Circuit permitted a prosecution to proceed against medical marijuana cultivators who “inadvertent[ly]” violated California marijuana law.

So, what is to be gleaned?  First, legislative drafters should take account of the nature of regulations in this area and enact a standard of compliance that reflects it.  One solution would be federally immunizing conduct by individuals who reasonably attempted to comply with state law—leaving it to state regulators to address and correct “reasonable” shortcomings.  Second, everyone with an interest in cannabis reform should continue to expect speed bumps ahead, even as the pace of reform accelerates.  The sword of Damocles may have lifted, but it is not gone.

Debra BorchardtDebra BorchardtApril 13, 2018


The Washington Post reported Friday that “President Donald Trump has promised a top Senate Republican that he will support congressional efforts to protect states that have legalized marijuana.” Senator Cory Gardner has been stalling on approving nominations for Justice Department positions as he held firm on the states rights issue for legalization.

According to the story, Trump told Gardner over the phone that he would not go after states that had legalized marijuana and as a result, Gardner is softening his stance on DOJ nominations.

“President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all,” said Sen. Cory Gardner (R-CO), according to the Washing Post. “My colleagues and I are continuing to work diligently on a bipartisan legislative solution that can pass Congress and head to the President’s desk to deliver on his campaign position.

The co-directors of the 2012 Amendment 64 campaign that legalized marijuana for adults in Colorado, Mason Tvert and Brian Vicente, have issued statements in response to the news.

Statement from Mason Tvert, who co-directed the Amendment 64 campaign and serves as vice president of communications at VS Strategies, a Denver-based public affairs firm that specializes in the cannabis industry:

“We are grateful to Sen. Gardner for standing up for the people of Colorado, as well as to President Trump for respecting states’ rights to adopt their own cannabis policies.  Colorado has taken great strides toward replacing the illegal marijuana market with a responsibly regulated system. It has been a long and difficult process, but we may now be seeing the light at the end of the tunnel. This is one more step toward ending the irrational policy of marijuana prohibition, not only in Colorado, but throughout the country.”

Statement from Brian Vicente, who co-directed the Amendment 64 campaign and is a founding partner of Vicente Sederberg LLC, one of the nation’s leading law firms specializing in cannabis law and policy:

“We see today’s announcement as an endorsement of the work we have been doing in Colorado for the past decade. From the birth of our regulated medical marijuana market in 2010 to the opening of the adult-use market in 2014, we have sought to be the model for responsible cannabis regulation. We are incredibly proud that Sen. Gardner was able to represent not just our state, but our industry in his discussions with the president. This is a great day for everyone in Colorado and around the country who risked their personal freedom to shape the regulated cannabis market.”

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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