It’s been a wild ride for weed this week, with the world’s largest market for legal weed opening just as our country’s top law enforcement officer opened the door for a wholesale shutdown of the entire pot industry. Is legal pot forever, or is its end in sight?
Light up a joint of some relaxing purple bud, because it’s Friday, and check out your weed news for the week…
Sessions Opens the Door to Federal Charges Against Legal Weed Businesses
Attorney General Jeff Sessions really hates weed—he once testified in congress that “good people don’t smoke marijuana” and in 1996 supported a bill that would have made the death penalty the mandatory minimum sentence for a second marijuana trafficking conviction—so his decision to rescind the Cole Memo on Thursday wasn’t entirely surprising. He has known for over a year that, as the country’s top enforcer of federal law, his signature has the power to send a cloud of uncertainty over the booming legal weed industry. And on Thursday he used that power and rescinded the Cole Memo.
Our post yesterday sums up a lot of the possible effects from Sessions’ actions, as does this great rundown by Dominic Holden of Buzzfeed News, but here’s what happened in a nutshell:
While our state, and seven others, has legalized the sale of weed, pot is still federally illegal. One of the only policies modifying federal prohibition was the Obama-era Cole Memo, which instructed U.S. Attorneys to reserve enforcement of pot laws for specific instances, including criminals making money off selling weed, or kids gaining access to the ganja. Sessions rescinded this memo, possibly opening the flood gates to criminal prosecution of state-legal pot businesses.
But there are a lot of obstacles standing in the way of enforcement of federal pot laws on state-legal businesses, so this change is unlikely to stop pot sales anytime soon. Multiple U.S. Attorneys—the Department of Justice foot soldiers that would be most likely to carry out an assault on the legal weed industry—have said Sessions’ actions will not change their policies, including attorneys in Colorado, Oregon, Alaska, and Western Washington.
And this headline-grabbing move by Sessions might just be a quick distraction as his name swirls in the toilet bowl of legal shit spinning around the White House right now.
Legal Weed For Sale in California
On New Years Day, California opened the doors on what is likely to become the world’s largest market for legal weed. California was the first state to pass a medical marijuana law way back in 1996, and their medical market grew to be the largest in the country. But Monday was the first day adults could legally purchase pot in California without a prescription.
The number of licensed legal retailers and pot farms in California are still smaller than the size of its existing medical market, but the state is quickly issuing new licenses and California’s market could grow to over $5 billion by the end of this year alone. For perspective—retailers in Washington have sold only $1.8 billion in pot since stores opened in 2014.
There’s still huge questions about how the state will deal with the existing black market, which supplies much of the country’s illegal weed, and with Sessions still in the Attorney General seat, pot hardly feels secure, but I’m one of the many people who think California’s legal market will be a game changer for federal pot law. California’s holds more than twice as many people as every other state with legal weed combined, not to mention possessing an economy that would be the world’s sixth largest if California were its own country. That means a lot more financial interests will be standing behind the right to grow, sell, and smoke pot in this country.
Given the current federal climate surrounding pot reform, California’s recreational weed market couldn’t come soon enough.
Snoop Dogg Advises Mike Tyson About Pot Farms
The Daily Star reports that Snoop Dogg is supposedly offering some advice to Mike Tyson, who recently broke ground on a 40-acre pot farm and resort in California. A source to the star says that “Snoop has reached out to Tyson with tips on what strains to grow.”
Snoop Dogg has (obviously) been a pioneer in both publicly smoking pot and the legal weed game, opening a capital venture fund for pot businesses and his own line of pot products called Leafs By Snoop. Snoop Dogg is probably one of the most trusted names in pot, so it only makes sense Tyson enlisted him as a consultant.
Convictions Against Washington Medical Marijuana Growers Vacated
The Stranger’s Heidi Grover reports that the convictions of three family members charged with illegally growing marijuana in Eastern Washington have been vacated. The three people were arrested in 2012, convicted in 2015, and sentenced to between 12 and 33 months in prison.
The case, referred to as the Kettle Fall’s Five, was closely watched across the country because of its implications on how the federal government could prosecute medical marijuana patients. An amendment to the federal budget passed in 2014 (called the Rohrabacher-Farr amendment) bars the Department of Justice from spending any money prosecuting people compliant with state medical marijuana laws, and that amendment was what ultimately sank the convictions. In October, prosecutors asked the court to dismiss the charges after they admitted that they were "not authorized to spend money on the prosecution of the defendants after December of 2014.”
The amendment that freed these defendants keeps the DOJ from spending money interfering with medical marijuana laws, it does not protect recreational pot laws like Washington’s current adult-use regulations.
America’s Legal Weed Industry Could Be Worth $40 Billion by 2021
The total economic output of the legal weed industry might grow to almost $40 billion in the next three years, according to Arcview Market Research. The researchers said U.S. consumer spending on cannabis could grow to $20.8 billion by 2021, the industry could employ over 400,000 people and as a whole, generate an overall impact of $39.6 billion.
These researchers also said that legal weed might have been a key factor in lowering the unemployment rates in Washington and Colorado. A study commissioned last year by the Washington legislator found that our local industry was employing over 10,000 people a year.
More Banks Are Working with Weed Businesses, For Now
Data released by the U.S. Department of the Treasury shows that a growing number of financial institutions are working with cannabis businesses, according to Forbes. The number of institutions across the country working with weed businesses increased from 340 in January of 2016 to 400.
When banks accept deposits from weed businesses they are essentially money laundering, given pot’s status as a Schedule I substance. That makes the naturally anxious bankers very nervous about touching cannabis cash, but thanks to two Obama-era federal memos and a lot of lobbying from the Washington state government, our state’s pot businesses have largely been able to open bank accounts.
Those relationships may crumble after Sessions rescinded all assurances about prosecution from the federal government. In his memo released on Thursday, Sessions emphasized that legal pot sales can “serve as the basis for the prosecution of other crimes, such as those prohibited by the money laundering statutes, the unlicensed money transmitter statue, and the Bank Secrecy Act.”
Alison Holcomb, the ACLU attorney who wrote Washington’s groundbreaking initiative to legalize weed, told me that banking might be the first place we feel the impacts of Sessions “saber rattling.”
“I think that is the most likely place where we see potential negative impacts,” Holcomb said. “And I say that because the [banking] industry thus far has proven to be extraordinarily risk-adverse in this area. Even after receiving that memo from the federal agencies there are still not a lot of financial institutions moving into the sector. Since they are kind of the last to the party they might be the first to leave.”