State-by-State Analysis of Sessions Move to Rescind Cole Memo

SessionsOn Jan. 4, 2018, U.S. Attorney General Jeff Sessions issued a memorandum rescinding earlier guidance from the Justice Department regarding the enforcement of federal marijuana laws in states that have legalized cannabis for medical and recreational use. The earlier guidance, known as the “Cole Memo,” adopted a policy of non-interference with state-legal marijuana activities so long as the activity did not jeopardize key federal priorities – such as keeping marijuana away from children.

Sessions’ memo directs all U.S. attorneys that in deciding which marijuana activities to prosecute under federal law, prosecutors should be guided by their own investigative and prosecutorial discretion. Sessions instructed attorneys to use the Department’s internal handbook – The U.S. Attorneys’ Manual – in deciding whether the prosecution of marijuana industry participants is appropriate. In short, Sessions has removed the layer of protection that was created by the Cole Memo; and under which legal marijuana businesses have flourished.

Since Sessions’ announcement, various cannabis industry stakeholders have expressed frustration and concern over Session’s actions and the future of U.S. medical and recreational cannabis markets. Despite this concern, the recent response from many state officials, and even U.S. attorneys suggests state-legal cannabis businesses are not in imminent danger of a federal crackdown. The following is an overview of some of the reactions to date:

Colorado

Shortly after Sessions’ memo, Robert Troyer, U.S. Attorney for the District of Colorado, issued a statement stating that his office has long operated under the principles outlined by Sessions, and would continue focusing on the “greatest safety threats to our communities around the state.” During a call with a bipartisan group of Colorado legislators, Troyer confirmed that his office will focus the majority of its efforts and funding toward immigration, opioids and violent crime.

Colorado Senator Cory Gardner (D-Colo.) went much further; claiming Sessions had promised him before his Sessions’ Senate confirmation, that he would not reverse the Obama-era policy of non-interference with state-legal cannabis programs. In response, Sen. Gardner has threatened to hold up the confirmation process for President Trump’s judicial nominees unless the administration reverses its decision on the Cole Memo.

Washington

Even before Sessions’ memo was made public, Washington State Governor Jay Inslee issued a statement that Sessions’ announcement is “the wrong direction for our state.” Inslee continued: “Make no mistake: As we have told the Department of Justice ever since I-502 was passed in 2012, we will vigorously defend our state’s laws against undue federal infringement.”

U.S. Attorney for the Western District of Washington, Annette L. Hayes, has seemed to quell fears that there will be any change in how her office investigates and prosecutes marijuana-related activity. She writes that Sessions’ memo “reiterated his confidence in the basic principles that guide the discretion of all U.S. Attorneys around the country, and directed that those principles shepherd enforcement of federal law regarding marijuana.” Hayes sees the memo as reinforcement of the belief that “U.S. Attorneys are in the best position to address public safety in their districts, and address the crime control problems that are pressing in their communities.”

Oregon

Oregon Governor Kate Brown has vowed to fight Sessions change in policy. In a statement, Brown writes: “My staff and state agencies are working to evaluate reports of the Attorney General’s decision and will fight to continue Oregon’s commitment to a safe and prosperous recreational marijuana market.” Gov. Brown notes that “over 19,000 jobs have been created by the market Oregon worked carefully to build in good faith and in accordance with the Cole Memorandum.”

U.S. Attorney for the District of Oregon, Billy J. Williams, in a piece published in The Oregonian, paints a more complicated picture. Williams believes Oregon’s legal cannabis market has major problems – including unauthorized overproduction that creates a powerful profit incentive that drives marijuana into black and gray markets across the county. Williams is also concerned with the lack of marijuana enforcement specialists. Williams has called for a summit made up of federal, state, local and tribal law enforcement, public health organizations, Oregon marijuana interests and concerned citizen groups to address these, and other, concerns.

In the meantime, Williams says, “We will continue working with our federal, state, local and tribal law enforcement partners to pursue shared public safety objectives, with an emphasis on stemming the overproduction of marijuana and the diversion of marijuana out of state, dismantling criminal organizations and thwarting violent crime in our communities.”

New Jersey

Throughout his 2017 campaign, New Jersey Governor-elect Phil Murphy has championed legalization of cannabis for adult-use as both a social justice issue and a way to generate $300 million in tax revenue for the state. New Jersey legalized medical marijuana in 2010, but the pace, expense, and reach of the program have been a source of frustration among patients and advocates.

Sessions’ rescission of the Cole Memo seems to have had little effect on New Jersey’s move toward legalization. Last week, New Jersey Senator Nicholas Scutari reintroduced a bill he originally proposed in May 2017, which would legalize recreational use of marijuana for adults over 21. A September 2017 Quinnipiac University poll showed that 59 percent of residents approved marijuana legalization.

In response to Sessions’ memo, Murphy’s office stated: “Governor-elect Murphy believes strongly in New Jersey’s right to chart its own course on legalizing marijuana, which will allow for law enforcement to focus their time and resources on prosecuting violent crimes rather than non-violent drug offenders.”

Vermont

Despite the new federal uncertainty created by Sessions’ announcement, the Vermont legislature is on track to become the first state to legalize cannabis through the legislative process – as opposed to state ballot initiative. On Jan. 4, 2018, the Vermont House passed a bill to legalize recreational use of marijuana. The bill is expected to clear the Senate and Governor Phil Scott (R-Vermont) has said he would sign the bill.

Vermont Senator Patrick Leahy (D-Vt.) suggested that federal prosecutors focus on more serious crime, such as illegal weapons, Russian election interference and the opioid crisis. “We don’t have enough federal resources to go after those things, but we’re going to go after somebody buying pot, legally, in their state? Give me a break,” said Leahy. Senator Bernie Sanders (I-Vt.) criticized Sessions’ decision, writing, “We should allow states the right to move toward decriminalization of marijuana, not reverse the progress that has been made in recent years.”

US Attorney for the District of Vermont, Christina Nolan, plans to prioritize cases as she has in the past, including under the recently rescinded Obama-era, Cole Memo. Nolan intends to focus Department resources and her efforts on the opiate crisis and addressing an increase in cases involving stimulants, such as crack cocaine and methamphetamine.

California

Shortly after Sessions’ announcement, two California state leaders – Attorney General Xavier Becerra and Bureau of Cannabis Control Chief Executive Lori Ajax – issued statements in defense of Proposition 64, the 2016 California voter initiative that legalized the use and retail sale of marijuana throughout the Golden State. Becerra made clear “in California, we decided it was best to regulate, not criminalize, cannabis. . . . We intend to vigorously enforce our state’s laws and protect our state’s interests.”

McGregor Scott, the recently appointed US Attorney for the Eastern District of California, prosecuted several significant marijuana cases during his first tenure with the Department, which ended in 2009. During that time, Scott was view by some as a “hardcore, anti-cannabis drug warrior.” It is currently unknown whether Scott will embark on a new war against legalized cannabis in California. It is doubtful he will have the funding and resources to challenge California’s legal cannabis market, which is projected to top $5.0 billion by 2019. His office provided a statement that “w]e will continue our long-standing efforts to assess and address the unique threats and challenges facing our district together with our state, local and federal law enforcement partners.”

Delaware

In Delaware, state Rep. Helene Keeley (D-Wilmington) is moving forward with a bill to legalize recreational cannabis for those 21 and older. In response to Sessions’ announcement, Rep. Keeley insisted “This is really a state’s rights issue.” Legalization in Delaware is expected to bring $22 million in taxable revenue. A University of Delaware poll shows 61 percent of Delawareans are in favor of legalization. Delaware legalized medical marijuana in 2011, but the state delayed the implementation of the program for years due to concerns over federal enforcement of marijuana laws. Seven years after legalization, there are only two medical marijuana facilities operating in Delaware, and no indicators of federal interference.

U.S. Attorney for the District of Delaware, David C. Weiss, does not seem likely to begin a crackdown on state-approved marijuana operations even if the Cole Memo is no longer in force. In a statement, Weiss said his office has limited resources, and prosecuting Delaware’s approximately 3,600 medical marijuana users is “certainly not a priority.” US Senator Chris Coons (D-Del.), agreed that prosecuting legal marijuana businesses would be a “poor allocation of federal time, money, and manpower that should be focused on more important things, such as combatting crime on our streets.”

Rescission of the Cole Memo does not appear to be slowing Delaware’s push toward legalization. That said, Delaware’s legalization bill would require a two-thirds majority in both houses of the Generally Assembly. That level of support may be difficult to obtain if lawmakers believe there is a risk of federal prosecution.

Pennsylvania

In April 2016, Pennsylvania legalized the use of marijuana to treat a number of serious medical conditions. The Commonwealth anticipates medical marijuana will be available to patients during the first quarter of 2018.

Within hours of Sessions’ announcement, Governor Tom Wolf promised to protect Pennsylvania’s medical marijuana program and patients from federal overreach. In a statement, Wolf said, “I will not stand for backward attacks on the progress made in Pennsylvania to provide medicine to those in need.” Wolf’s comments echo statements he made last year in a letter to Sessions when the Attorney General sought to undo different federal medical-marijuana protections. Wolf warned that he would “seek legal action to protect our residents and state sovereignty.”

A statement from David Freed, US Attorney for the Middle District of Pennsylvania, suggests federal interference with the Commonwealth’s medical marijuana program is unlikely. Freed writes: “While I cannot state that there will never be an issue in this area meriting federal involvement, my office has no intention of disrupting Pennsylvania’s medical marijuana program or related financial transactions.”

Massachusetts

Massachusetts residents voted to legalize marijuana for adult-use in November 2016. State regulators have drafted regulations, scheduled hearings, and are working towards an expected July 1 start of retail sales. Despite the uncertainty created by Sessions’ latest announcement, the state’s Cannabis Control Commission plans to move forward in developing a legal market for recreational cannabis in Massachusetts. Governor Charlie Baker called Sessions’ rescission of the Cole Memo “the wrong decision” and confirmed that state Republicans will continue to support the Commission’s work.

Andrew Lelling, US Attorney for the District of Massachusetts, has been less clear. In a statement, Lelling reaffirmed his commitment to “aggressively investigate and prosecute bulk cultivation and trafficking cases, and those who use the federal banking system illegally.” In response to a public call from cannabis advocates for Lelling to clarify his position, he issued a statement that he “cannot provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.” Lelling is resolved to proceed on a case-by-case basis when enforcing federal marijuana law guided by his investigative and prosecutorial discretion.

Conclusion

To date, thirty states and the District of Columbia have legalized cannabis in some form. More than two-thirds of Americans now live in jurisdictions that have legalized either medical and recreational use of marijuana. Nationally, public support in favor of legalizing marijuana use hovers around 60 percent, the highest in U.S. history. While Sessions’ decision to rescind the protections provided in the Cole Memo, the reaction from many state officials, and even U.S. attorneys, suggests state-legal cannabis businesses are not in imminent danger of a federal crackdown.

By Peter Murphy and Jill Cohen
(Edited by Cherese Jackson)

Peter S. Murphy is a member of the firm’s Regulated Substances Group, a multidisciplinary team of lawyers and government affairs professionals who advise clients establishing and operating legal cannabis businesses throughout the United States. 

Jill Cohen divides her practice between complex commercial litigation and employment litigation. Jill is experienced in representing corporations, executives and publicly traded companies in intricate cases involving securities, class action defense, and contract issues, in both individual plaintiff and class action lawsuits.

Sources:

Regulated Substances Group: Peter Murphy and Jill Cohen
Eckert Seamans: Regulated Substances
U.S. Department of Justice: Justice Department Issues Memo on Marijuana Enforcement

Image Credit:

All Images Courtesy of Gage Skidmore’s Flickr Page – Creative Commons License