Legal Impact and Financial Implications: Attorney General Jeff Sessions Memo

Sanya Singh Marijuana Legalization, Medical Marijuana

Elizabeth Wittemyer, Attorney At Law

Prepared at the Request of the Marijuana Education Initiative

When U.S. Attorney General Jeff Sessions decided to issue a memorandum on January 4, 2018, rescinding the Cole Memorandum, it was clear that his long-time wish to demonize marijuana and criminalize activities around the legal state markets had come to pass. I am an attorney who represents the cannabis industry, and several worried clients and colleagues have wished to discuss the issue and the possible consequences with me. The interplay of state and federal law can be confusing, especially as we consider the effects the Sessions Memo will have on the cannabis industry.

Understanding the hierarchy of the U.S. Justice Department and its authority over the states is one way to view how this interplay works. The Justice Department is an executive-branch agency that deals with crimes at the federal level and that enforces federal law. The U.S. Attorney General is a cabinet member appointed by the president and is the nation’s chief law enforcement officer for federal law. U.S. attorneys are employees of the Justice Department and prosecute federal cases brought to them by federal law enforcement agencies such as the Federal Bureau of Investigation and the Drug Enforcement Administration. The DEA investigates crimes involving cannabis. You might remember from the television show Law and Order, the DEA investigates crimes as law enforcement officers and the U.S. attorneys prosecute in federal courts the crimes brought to them by DEA officers. Marijuana is federally illegal and is classified as a Schedule I drug under the Controlled Substances Act. The DEA is the lead law enforcement agency for the domestic enforcement of the Controlled Substances Act.

The Cole Memorandum from 2013 established a new “prosecutorial discretion” regarding cannabis. It was a policy guidance to U.S. attorneys that made the cannabis industry a low prosecutorial priority in states that had legalized cannabis, as long as those states complied with the guidelines contained in the memo—namely, to protect youth and control diversion. What the Jeff Sessions Memo does is reestablish cannabis, regardless of legality within the states, as a prosecutorial priority along with all other federal crimes. In the memo, Sessions encourages the prosecution of other crimes that can be tied to cannabis, such as money laundering and violations of banking regulations. These types of prosecutions will almost certainly include asset forfeiture actions. The Sessions Memo highlights the “Department’s finite resources” and points to principles of prosecution set in 1980, taking us back to the old, failed policies of the war on drugs.

Though U.S. attorneys seem to have little appetite to initiate prosecutions against legal cannabis businesses, the same cannot be said of the DEA. In fact, the DEA has always had a Domestic Marijuana Eradication/Suppression Program aimed at completely eradicating cannabis in the United States. According to the Department of Justice Fiscal Year 2016 Budget submitted to Congress, the DEA spent millions of dollars on marijuana eradication efforts, including anti-legalization education programs. Although the cannabis industry blames the DEA for refusing to reschedule cannabis from its present Schedule I status, it is the Department of Health and Human Services that has the legal responsibility to make scientific and medical determinations regarding drug scheduling. The head of HHS Tom Price resigned in a cloud of scandal in September 2017. The president has nominated Alex Azar, a former pharmaceutical company executive, to fill the position, and Mr. Azar’s confirmation hearing began January 9, 2018. As cannabis is a competing product to pharmaceuticals, it is highly unlikely that a former representative of the pharmaceutical industry, which holds one of the most powerful lobbies in Congress, will consider rescheduling marijuana. With Azar as head of HHS, the pharmaceutical industry would have even more control over our federal agencies in their quest to demonize cannabis, with Jeff Sessions leading the charge.

The Rohrabacher-Blumenauer amendment (formerly the Rohrabacher-Farr amendment) is part of the federal budget established by Congress and has been included in every annual federal budget appropriations since 2014. The amendment prohibits the use of federal funds to supersede legal medical marijuana state laws. What many people do not realize is that the amendment primarily protects medical marijuana and not recreational marijuana. This year, Congress has been unable to agree on the budget and has limped along by making continuing resolutions to keep a government shutdown at bay. The last continuing resolution was on December 22, 2017, and it extended the previous budget to January 19, 2018. The Senate appropriations included the Rohrabacher-Blumenauer amendment; the House version did not after Attorney General Jeff Sessions lobbied against its inclusion. It is unclear what will happen to the amendment amid the many other fights over the budget, including immigration, defense, and domestic programs. Even if the Rohrabacher-Blumenauer amendment is included in the next appropriations bill, the rescission of the Cole Memo places the recreational marijuana industry at particular risk.

Federal law supersedes state law, “preempting” state laws that conflict with federal laws. With the Cole Memo, the Obama administration allowed states to experiment with legalization of cannabis, in essence, “promising” not to bring a preemption action in federal court that would shut down a state’s legalization of marijuana. Although many legal scholars argue that the states that have legalized have relied on this federal discretion to their detriment, and therefore there are now legal defenses to a preemption action, the legalized states’ courts are not friendly to cannabis. State law cannot legalize what is illegal under federal law. In several court cases, acts that are legal under state marijuana laws were not protected by the courts owing to the illegality of the act under federal law, and this has led to seizures of inventory and loss of jobs. Cannabis businesses must be very careful in seeking relief in the state courts and should instead opt to negotiate, mediate, or arbitrate disputes whenever possible. Although recreational cannabis stands in particular danger because of its relative lack of credibility compared to medical cannabis, the entire legal cannabis industry is at risk.

As we experience the devastating opioid crisis, with thousands of lives lost, the Jeff Sessions Memo begs reason and common sense. President Trump declared the opioid epidemic a national emergency; however, no new federal funds were allocated to address the crisis. Medicaid is under attack and will be cut back; by how much is the only question. States, facing budget shortfalls, have cut treatment programs throughout the nation. First responders dealing with opioid overdoses are vicariously traumatized by the horror they experience every day and their resources are stretched to the point of breaking. Our courts, overwhelmed with opioid-related crime cases, have few options to deal with the social ill of addiction through the criminal justice system. We are losing our family, friends, and neighbors every day to opioids. Yet, rather than spend federal money on prosecuting feel-good doctors, pill mills, and foreign actors to attempt to reduce the opioid epidemic, Jeff Sessions will devote the Department of Justice’s finite resources to prosecuting a drug that no one dies from. In fact, research shows the promise of cannabis as an effective treatment in reducing the need for opioids.

The question is, therefore, one of where to direct our government’s limited resources. Do we spend federal dollars prosecuting opioids or prosecuting cannabis? Do we spend federal dollars on anti-legalization education or on education that will help our youth make healthy choices around legalization? Education programs such as those of the Marijuana Education Initiative, which provides reality-based education for youth regarding marijuana, are the initiatives that our tax dollars should fund. Now is the time to press our elected representatives to set the nation’s priorities straight.

To learn more about the misinformation surrounding marijuana and the opioid epidemic check out our blogs The Truth and Marijuana and Opioids:   Sorting Through the Misinformation