Federal Enforcement: Where Do We Stand?

While turmoil swirls in Washington, and with California’s state-legal cannabis industry just getting started, here is a check-in on the prospect of enforcement of the federal laws against cannabis.

Cole Memo

In January, Attorney General Jeff Sessions announced that he was rescinding the “Cole Memorandum.” That memorandum provided guidance to federal prosecutors with respect to state-legal commercial cannabis activities that did not implicate federal priorities. In short, the memorandum instructed prosecutors to de-emphasize such enforcement.

While this announcement made waves, the impact appears minimal. Mr. Sessions did not change any law. Rather, he continued the Trump administration’s general approach of dismantling programs enacted under the Obama administration. Additionally, the timing of Mr. Sessions’ announcement, immediately after California’s new cannabis licensing laws took effect, was a continuation of the administration’s apparent antagonism towards democratic-leaning states.

Importantly, Mr. Sessions did not create any new enforcement priorities regarding cannabis. Because the decision to pursue any particular prosecution still remains within the discretion of the US Attorneys, it remains unclear what impact, if any, Sessions’ announcement will have. The fact that voters acted to legalize cannabis in many states may weigh heavily against the US Attorneys in those states setting their sights on cannabis.

The Department of Justice could, of course, replace the Cole Memorandum with a new one, spelling out new enforcement priorities. That would resolve the current uncertainty, although not necessarily in the manner preferred by voters in states like California.

(Non)-Enforcement Is More Dependent on Congressional (In)action

In contrast to the Cole Memorandum, which was not an official legal restriction on enforcement, Congress’ restriction on how the Department of Justice spends funds appropriated to it has been an effective bar on prosecution. This restriction currently remains in effect but requires renewal every time Congress has to enact a new spending bill.

On January 22, Congress passed a stopgap bill to end a government shutdown through continuing resolution. By doing so, it extended the protections of the so-called Rohrabacher-Blumenauer (formerly “Rohrbacher-Farr”) Amendment, which has been included in spending bills since fiscal year 2015, though it was first proposed in 2001. The Amendment prohibits the Department of Justice from spending funds to interfere with states’ implementation of medical cannabis laws. The Ninth Circuit has applied the Amendment to effectively block prosecutions against commercial cannabis activity that complies with state law. The Department of Justice has all but conceded this point in the Ninth Circuit but could still test the force of the Amendment in other jurisdictions. If other circuit courts take a different approach, the Supreme Court, which is not shy about overturning Ninth Circuit precedent, could eventually weigh in.

The problem with the Amendment is obvious: Congress can restore funding for prosecution at any time by simply failing to include the Amendment in future spending bills. Given the chaos that ensues any time Congress tackles the federal budget, the Amendment’s protections are anything but secure.

The January 22 stopgap bill only funded the government through February 8. So, we are one week away from a key moment in clarifying the medium-term outlook for cannabis enforcement. Of course, the federal government could shut down again, or simply kick this issue down the road for another few weeks.

But What about Adult-Use?

Another major drawback to the Amendment is that it only concerns medical cannabis. The Department of Justice remains unrestrained with respect to adult-use cannabis.

To be sure, there are pending bills that would address adult-use cannabis. Barbara Lee, a California representative, introduced the  “Restraining Excessive Federal Enforcement & Regulations of Cannabis Act of 2018” (H.R. 4779), which would essentially make the Rohrabacher-Blumenauer Amendment protections permanent and expand them to cover adult-use cannabis. It would also penalize banks for refusing to provide services to cannabis businesses. Senator Cory Booker’s “Marijuana Justice Act” would go even further, by removing cannabis from the Controlled Substance Act altogether.

Despite elected cannabis advocates in both houses of Congress, these efforts are extreme long shots at best, at least for now. Congress is unlikely to undertake a serious discussion about cannabis anytime soon, though the Sessions announcement may force the issue, as Mr. Booker and Senator Elizabeth Warren authored a letter, signed by over 50 members of Congress, demanding that the Administration cease its hostility towards state-legal industries.

So, for now, California’s cannabis legalization continues without significant federal interference or cooperation. Look for more information in this space about those efforts, including about the ongoing discussions by top state officials to address the problem of banking for cannabis businesses.

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