KMK Law Cannabis & Craft Beer Blog

Since August of 2013, this country’s nascent marijuana industry has been propped up by “The Cole Memo,” a 4-page guidance document from then-Deputy AG James Cole outlining the factors to be considered by the Department of Justice in enforcing the federal ban on marijuana distribution and sale in view of the handful of states which – at that time – had begun to legalize it in one form or another. That memo was followed in February of 2014 by a Treasury Department memo wherein the Financial Crimes Enforcement Network (FinCEN) mirrored the Cole Memo guidelines for banks. Fast forward to 2018, and 35 states plus the District of Columbia have legalized or decriminalized marijuana possession and use for either medical purposes, recreational purposes, or both.

Yesterday, seemingly out of nowhere, AG Jeff Sessions issued a 1-page memo which formally rescinded the Cole Memo. That memo can be viewed here. In 3 short paragraphs, the manageable framework of both the Cole Memo and the FinCEN Memo were eviscerated and replaced with the vague yet ominous statement, “[i]n deciding which marijuana activities to prosecute under these laws with the Department’s finite resources, prosecutors should follow the well-established principles that govern all federal prosecutions.”

The decision was met with shock and, in some political circles, outrage. Among those taking issue with the decision was Sen. Cory Gardner (R-CO), who accused Sessions of going back on his word not to disturb the Cole Memo and threatened to hold up every single DOJ appointment put before the Senate as a result. Some commentators have already argued that the Sessions Memo now condones – if not encourages – federal prosecutors to refocus their efforts to crack down on possession, distribution, and cultivation of marijuana; this despite the opioid epidemic which has gripped this nation.

Although still unclear whether and if this DOJ edict will actually come to bear on dispensaries and cultivators otherwise involved in state-approved cannabis activities, its presence will only exacerbate the confusion already present in this rapidly-growing industry. Indeed, a number of federal prosecutors, when asked for their view of how or whether this memo would change the status, responded yesterday that they simply did not know.

However, if we read between the lines of the Sessions Memo, we can perhaps find a couple of important take-aways. First, the Memo specifically noted that the existing legal framework, including that which lists marijuana on Schedule 1 of the Controlled Substances Act, reflects “Congress’s determination that marijuana is a dangerous drug and that marijuana activity is a serious crime.” The possible message? The DOJ is going to enforce the laws as written, so if Congress doesn’t like it, they can do something about it. In that regard, Cory Booker’s (D-NJ) Marijuana Justice Act is sitting in the Senate awaiting review.

Second, the Memo makes references to both the DOJ’s “finite resources” and “appropriations.” In this regard, the Rohrabacher-Farr amendment to the federal budget which prohibits federal spending that would be targeted to interfere with implementation of states’ medical marijuana laws is still in place – at least until January 19^th. Without financial resources at its disposal, at least the medical cannabis business seems safe for the next 2 weeks, or until Congress re-ups the amendment.

At minimum, we can reasonably conclude that the Sessions Memo has set the stage for marijuana legalization at the federal level to be a major issue in 2018; one that we will continue to follow for you. Stay tuned…

Possession and distribution of marijuana for any purpose is illegal under federal law. KMK can only advise clients regarding compliance with Ohio state law on medical cannabis, specifically, Sub H.B. 523 of the 131^st General Assembly.