Marijuana and the Feds

Fourteen states have legalized medical marijuana (Alaska, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and Washington). California and Colorado are even contemplating generally legalizing marijuana, not just for medical purposes. Voters in California, as early as November, will see a ballot initiative to legalize, regulate, and tax marijuana.

The California medical marijuana industry is already a multi-billion dollar industry, and one of the state’s largest industries. If the ballot measure is passed, it is estimated to contribute several more billion dollars in state tax revenues.

There has been a marked increase in the number of registered users and dispensaries since a memo from the United States Department of Justice directed law enforcement personnel to refrain from enforcing federal law against people in “clear and unambiguous compliance with existing state laws concerning medical marijuana.”

But, marijuana in any form is still illegal federally. Possession convictions come with a minimum five year sentence. The memo made clear that “significant traffickers” will still be prosecuted and that stopping “commercial enterprises that unlawfully market and sell marijuana for profit” will continue to be a priority for the department. Cancer patients and their caregivers are not to be prosecuted, but businesses selling for profits, or otherwise violating state law, are to be prosecuted. What is a "significant trafficker?"

And, what does “clear and unambiguous compliance” state laws mean? What if there are no state laws, for example, dealing with infused products? Will a medical marijuana bakery be raided and prosecuted? It could be.

DEA Special Agent Jeffery Sweetin’s interpretation of the memo, as quoted in the Denver Post, is: “[t]echnically, every dispensary in the state [of Colorado] is in blatant violation of federal law. The time is coming when we go into a dispensary, we find out what their profit is, we seize the building and we arrest everybody. They’re violating federal law; they’re at risk of arrest and imprisonment.” It’s as simple as the memo being ignored.

Businesses are relying on a memo, which is not actual policy. It can be swiftly withdrawn. It can easily be ignored. The memo also states that “clear and unambiguous compliance with state law… [does not] create a legal defense to a violation of the Controlled Substances Act.” So, if law enforcement is encouraged not to prosecute those in compliance with state laws, but they do anyway, compliance with state law will not be a defense. Huh? What is the point of the memo anyway?

The risk is not only for medical marijuana business owners or growers, but their landlords, as well as anyone funding the operation. It wouldn’t even take a change in administration to subject several layers of business owners to the risk of hard jail time.

The bigger questions will come when states vote to legalize all marijuana - to tax it and profit from the regulation as they do from the regulation of alcoholic beverages. States cannot authorize violations of federal laws, nor will compliance with state law be a defense in federal prosecution. This is something that medical marijuana businesses need to keep in mind now, and that other marijuana based businesses may also need to keep in mind.