In the first few months of 2017, the Trump Administration made certain statements suggesting there may be “greater enforcement” of federal laws against cannabis. White House Press Secretary Sean Spicer also compared recreational cannabis to the opioid addiction crisis, while Attorney General Jeff Sessions rejected the idea that America would a better place if people could go down to their corner drug store to buy cannabis. So is it time to panic? Not exactly.
Nothing has really changed regarding the legal status of cannabis at the federal level since the election of President Trump. Marijuana is still federally illegal, and it continues to be classified as a Schedule 1 substance under the Controlled Substance Act (CSA). As long as the CSA remains in effect in its current form, states cannot authorize the manufacture, distribution, or possession of marijuana, as the Supremacy Clause of the Constitution establishes that state laws cannot permit what federal law prohibits.
The Trump Administration does not seem as concerned with medical cannabis. In fact, the administration recently took steps indicating that it will maintain the status quo – at least for now – with respect to states that have implemented medical cannabis laws.
So that just leaves us with trying to figure out what the Trump Administration plans to do with recreational cannabis. There is no denying that the comments made by Spicer and Sessions are not quite reassuring for someone looking to start a recreational cannabis business in 2017. But it is still far too early for any serious concern regarding the future of this multi-billion dollar industry. There is still a whole lot of uncertainty regarding how recreational cannabis laws will be implemented in various states, and there are also several proposed bills currently under consideration that might significantly change the way cannabis is treated moving forward. In other words, there is no need to push that panic button just yet, and here’s why:
1. The Trump Administration Has Not Really Targeted Medical Cannabis Laws
During his February 23, 2017 White House briefing, Spicer stated there was a “big difference” between recreational cannabis and medical cannabis (with the latter presented in a much more favorable light), and then referenced what is traditionally known as the Rohrabacher-Farr amendment.
The Rohrabacher-Farr amendment first became law in 2014 and must be renewed every fiscal year. It prohibits the Department of Justice (DOJ) from spending money on actions that prevent 40+ states, the District of Columbia, and two territories from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.
On May 5, 2017, President Trump signed into law the Consolidated Appropriations Act of 2017, and the Rohrabacher-Farr amendment (which is now known as the Rohrabacher-Blumenauer amendment) was thus reenacted as Section 537 of the Act. Accordingly, the Rohrabacher-Farr amendment has once again been signed into law, and the DOJ continues to be prohibited from spending funds from the relevant appropriations acts for the prosecution of individuals who are engaged in conduct permitted by their state medical marijuana laws, and who have fully complied with such laws.
So what it is the legal effect of the DOJ not being able to spend funds to prosecute individuals who are fully compliant with their state medical marijuana laws? This issue was addressed by the United States Court of Appeals for the Ninth Circuit in United States v. McIntosh (9th Cir. 2016) 833 F.3d 1163, 1176 (McIntosh).
In McIntosh, the defendants were charged with federal marijuana offenses, and they moved to dismiss their indictments or to enjoin their prosecutions on the grounds that the DOJ was barred from spending funds to prosecute them pursuant to the Rohrabacher-Farr amendment. The court in McIntosh acknowledged that the Rohrabacher-Farr amendment prohibits the federal government from preventing the implementation of specific rules of state law that authorize the use, distribution, possession, or cultivation of medical marijuana. Significantly, the Ninth Circuit held that defendants charged with marijuana offenses in federal court are entitled to an evidentiary hearing to determine whether their conduct was completely authorized and in strict compliance with state law.
In other words, pursuant to McIntosh, an individual named as a criminal defendant in an action concerning the use, distribution, possession, and cultivation of medical marijuana has the right to an evidentiary hearing where a determination can be made as to whether this individual acted in strict compliance with his state’s medical marijuana laws. If it is determined that this individual did, in fact, strictly comply with his applicable state laws, and that the DOJ therefore expended funds to prosecute this individual in violation of the Rohrabacher-Farr amendment, recent cases from the Ninth Circuit indicate that the appropriate remedy is to vacate the marijuana-related convictions. See e.g. United States v. Silkeutsabay (9th Cir., Feb. 28, 2017, No. 15-30392) 2017 WL 766985, at *2 and United States v. Gentile (E.D. Cal., Apr. 24, 2017, No. 112CR00360DADBAM) 2017 WL 1437532, at *6.
Thus, while the Rohrabacher-Farr amendment does not provide immunity from prosecution for federal marijuana offenses, the Ninth Circuit’s decision in McIntosh does indicate that as long as the Rohrabacher-Farr amendment remains in effect, the DOJ is “prohibited from spending funds from specific appropriations acts for prosecutions of those who complied with state law.” McIntosh, 833 F.3d at 1179. Fortunately then, in light of the recent renewal of the Rohrabacher-Farr amendment, it looks like the legal framework set forth in McIntosh will remain in place – at least for now – under the Trump Administration, and individuals that are in absolute compliance with their state medical cannabis laws will have some room to breathe.
2. There is Still Plenty of Uncertainty with Cannabis Laws
While Spicer may have stated there was a “big difference” between recreational and medical cannabis back in February 2017, states are not necessarily drawing such a clear distinction between recreational and medical when it comes to implementing cannabis-related laws.
For example, in April 2017, California Governor Jerry Brown proposed a trailer bill that would merge California’s medical and recreational cannabis regulations into one regulatory structure on the basis that implementing these statutes separately would result in duplicative costs and inevitable confusion. Per the trailer bill, California would rename the “Control, Regulate and Tax Adult Use of Marijuana Act” to the “Medicinal and Adult-Use Cannabis Regulation and Safety Act.” Additionally, in 2015, Washington Governor Jay Inslee signed Senate Bill 5052 into law, which uses the regulations in place for the recreational market to regulate the medical use of marijuana. Accordingly, even if the Trump Administration sought to enforce federal laws against the recreational cannabis industry, but not against the medical cannabis industry, there is no clear answer as of now as to how that would occur in states that have merged their medical and recreational laws in some form.
Of course, another factor leading to the current state of uncertainty is that Attorney General Jeff Sessions has not actually set forth any formal policy regarding marijuana enforcement, nor has there been any clear indication from the new head of the DOJ as to whether there will be marijuana enforcement policies that deviate from the status quo. However, in April 2017, Sessions did send a memorandum stating that he had established a Task Force to review the existing policies in the areas of charging, sentencing, and marijuana to ensure consistency with the DOJ’s overall strategy on reducing violent crime and with the Administration’s goals and priorities.
While it remains to be seen what this Task Force determines, it should be noted that in March 2017, Sessions publicly stated that he found much of the policies set up under the 2013 Cole Memorandum to be “valid.” The Cole Memorandum, which was prepared to offer guidance on federal marijuana enforcement, essentially states that rather than prosecuting the full range of marijuana violations, United States Attorneys should focus their enforcement resources and efforts on persons or organizations whose conduct interferes with certain federal government priorities (e.g. preventing the distribution of marijuana to minors).
3. Bills Favorable to the Cannabis Industry are Currently Under Consideration
On both the federal and state level, numerous bills have recently been proposed in connection with protecting the cannabis industry.
For example, on the federal level, at least two bills have been introduced that may provide significantly greater protection to individuals and businesses that are compliant with their state cannabis laws. First, Congressman Dana Rohrabacher is sponsoring H.R.975 – Respect State Marijuana Laws Act of 2017, which was introduced in the House of Representatives in February 2017. This bill would amend the CSA to provide that the Act’s regulatory controls and administrative, civil, and criminal penalties do not apply to a person who produces, possesses, distributes, dispenses, administers, or delivers marijuana in compliance with state laws. Second, on May 18, 2017, Congresswoman Diana DeGette introduced H.R.2528 – Respect States’ and Citizens’ Rights Act of 2017, which would amend the CSA to provide that federal law shall not preempt state law. Notably, neither of these bills make a distinction between recreational and medical cannabis.
On the state level, California recently took another step towards becoming a “sanctuary state” in which state and local agencies would be prohibited from using resources in connection with federal enforcement of marijuana laws. Specifically, on June 1, 2017, the California State Assembly passed Assembly Bill 1578, which would prohibit a state or local agency from taking certain actions without a court order signed by a judge, including using agency money, facilities, property, equipment, or personnel to assist a federal agency to investigate, detain, detect, report, or arrest a person for commercial or noncommercial marijuana or medical cannabis activity that is authorized or allowed under state or local law. The bill will now go to the State Senate and be heard by the Senate Public Safety Committee.
While it is unclear as to whether California will truly end up serving as a “sanctuary state” in connection with marijuana enforcement, it does appear that California is ready to be on the front lines of this issue. Why would California be willing to take on that role? Perhaps because California legalized recreational cannabis on the same day that President Trump was elected, and that the recreational cannabis industry is estimated to generate over $1 billion annually in additional tax revenue for the state of California, according to California State Treasurer John Chiang.
Suffice it to say that California – as well as Colorado, Nevada, Washington, Oregon and all the other states that have legalized cannabis – have a substantial interest in the cannabis industry continuing to thrive and prosper.
Conclusion
There is obviously some uncertainty as to what effect, if any, the Trump Administration will have on the cannabis industry. However, based on the legal framework currently in place, as well as the various proposed laws that are being contemplated, it is likely safe to say that the multi-billion dollar cannabis industry in the United States will not be going away anytime soon.
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Nima Darouian is an associate attorney at Messner Reeves LLP. He may be contacted at ndarouian@messner.com.
This article is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this article, you understand that there is no attorney/client relationship between you and the author of the article. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
