Although, in making the above comments, Sessions was clear that marijuana was still illegal in the U.S., he appears to have drawn a box around those types of marijuana-related criminal activities on which federal prosecutors are focused. The above comments are not inconsistent with the Sessions memo of January 4, 2018, and may help clarify what prosecutorial discretion looks like under that memo. Based on the above comments, it would seem that activities conducted pursuant to state marijuana programs are not the types of activities on which federal prosecutors are focused.
On Tuesday, March 6, 2018, the Cannabis Control Commission (the “Commission”) unanimously agreed to final regulations for adult-use cannabis in the State of Massachusetts. These regulations have not yet been published, but the Commission indicates that they will “incorporate language approved at [today’s] meeting into the final regulations before filing them with the Secretary of State.” There are nine licensing categories, which are intended to meet the varying needs of the cannabis industry. The material departures from the draft regulations adopted in December 2017 include:
On-site consumption and delivery of cannabis are not yet permitted, but regulations for these activities are expected to be released within one year.
Dispensaries will have to reserve at least 35% of their inventory for medical cannabis patients if they are co-located with a registered marijuana dispensary.
Licensees growing cannabis will be limited to 100,000 square feet of canopy
Any person with drug trafficking convictions will be banned from the industry, except if such convictions are related to cannabis.
The Commission is still committed to authorizing legal sales of adult-use cannabis by July 1, 2018, but there could be delays from individual municipalities in the adoption of their own regulations and permits. In order to meet this goal, the Commission anticipates accepting adult-use license applications starting on April 1, 2018, and the first adult-use licenses being issued to cannabis establishments on June 1, 2018. Priority status will be given to Economic Empowerment Applicants (applicants from communities disproportionately impacted by marijuana-related crimes) and to licensees of Registered Marijuana Dispensaries (licensees of medical dispensaries), which is consistent with the draft regulations.
With the election of Phil Murphy as New Jersey Governor in 2017, the possibility of New Jersey becoming one of the next states to pass recreational marijuana legislation became very real, as this was among the issues key to Murphy’s campaign.
On Tuesday, January 9, 2018, less than one week after AG Sessions issued guidance to all US Attorneys rescinding Obama-era policies deprioritizing the federal prosecution of state-lawful cannabis-related activities, that possibility became more of a likelihood, as New Jersey Sen. Nicholas Scutari introduced Senate Bill 830, which would allow for the cultivation, sale and use of marijuana for recreational purposes in New Jersey by those 21 and older.
The legislation proposes adults would be permitted to possess up to 1 ounce of marijuana, 16 ounces of marijuana-infused products in solids, 72 ounces in liquid form, 7 grams of concentrate and up to six immature plants, and establishes a sales tax on marijuana that would rise incrementally from 7 percent to 25 percent over five years.
With New Jersey’s large population, and proximity to Manhattan and Philadelphia, the recreational cannabis market in New Jersey will likely dwarf most other states that have legalized adult-use.
US Attorney General Jeff Sessions today rescinded all prior advisory memoranda regarding enforcement priorities in connection with alleged cannabis crimes. This includes the key so-called Cole Memo issued in 2014. That memo advised US attorneys not to prioritize pursuing criminal cases against those complying with state legal cannabis laws as long as certain concerns (such as the involvement of organized crime or distribution to minors) were not present.
In his memo issued today, Sessions indicates that no special guidance is needed in the cannabis space and that general guidelines applicable to all potential prosecutions apply. These guidelines include, according to the memo, “federal law enforcement priorities set by the Attorney General, the seriousness of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community.”
In justifying his action, Sessions lists federal statutes making cannabis illegal, indicating his belief that those statutes “reflect Congress’ determination that marijuana is a dangerous drug and that marijuana activity is a serious crime.”
Sessions has been hinting at taking some action regarding the Cole Memo for a while. There was talk that he might replace it with another cannabis memo, maybe a bit tougher, but this memo seems to suggest that will not happen. A federal law known as the Rohrabacher-Blumenauer amendment still prohibits spending federal dollars on enforcement against those complying with state medical cannabis laws. That law will expire with the current budget bill in a few weeks, and it is not clear that it will be retained in the new federal budget. Stay tuned.
On January 1, 2018, hundreds of California residents lined up outside just licensed cannabis retail dispensaries to purchase newly legal recreational marijuana. The founder of Buddy’s dispensary in San Jose, which holds one of California’s first recreational marijuana licenses, described it as the busiest day in the dispensary’s history. The California cannabis industry is projected to reach profits of $3.7 billion dollars in 2018 alone. Projections indicate there could be up to 4 million consumers of recreational marijuana in California. This huge opportunity has many new entrepreneurs, including celebrities like Mike Tyson, pursuing the cannabis business.
Under the new law, Californians over the age of 21 can now possess up to an ounce of marijuana, eight grams of marijuana concentrate, and grow up to six plants at home for their personal use. While public consumption is still banned, the new framework gives recreational users new flexibility. Those on the business side of recreational cannabis, however, still have a lot to consider before diving into this new market.
This is especially true given the news today that Attorney General Jeff Sessions is rescinding an Obama-era directive discouraging enforcement of federal marijuana laws in states where cannabis is legal. We will know more about how this decision will impact the California market after the announcement is officially made by AG Sessions later today. For now, we will provide an update on the first week of recreational cannabis sales in California.
On November 16, 2017, the California Bureau of Cannabis Control published emergency regulations governing both the medical and the adult-use cannabis industries in California. Below are the highlights of the emergency regulations and how they may impact distributors of cannabis products.
San Francisco Adopts New Rules for Recreational Cannabis
After months of debate and consideration, the San Francisco Board of Supervisors approved new regulations for recreational cannabis activity yesterday. The legislation will come back to the Board next week for a final vote and then will go to San Francisco Mayor Ed Lee to sign it into law. Highlights of the new regulations are outlined below.
Existing Medical Dispensaries Allowed to Sell Recreational Cannabis
Beginning on January 5, 2018, existing medical dispensaries and delivery services currently operating in San Francisco will be allowed to sell recreational cannabis. The existing cannabis dispensaries must obtain a temporary 120-day license in order to participate in recreational cannabis sales.
On November 16, 2017, California’s three cannabis licensing agencies published emergency regulations to govern both the medical and adult-use cannabis industry in California under the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) (Bus. & Prof. Code 26000 et seq.). The regulations published by the Bureau of Cannabis Control, the Department of Food and Agriculture and the Department of Public Health cover, among other things, cultivating, manufacturing, testing, growing, packaging and potency requirements.
Duane Morris’ Patricia Heer will be presenting at the 4th Annual Cannabis World Congress and Business Exposition in Boston on October 4-6, 2017.
Patricia’s presentation, “Cannabis and Social Media with Some Practical and Legal Implications,” will take place on Friday, October 6 at 11:00 a.m.
The Annual Cannabis World Congress and Business Expos are the leading forums for doing business in one of the fastest growing industries in the United States. If you’re employed in the cannabis industry, a current business owner, interested in starting a cannabis business, provide private equity and investment resources, or provide professional or business services, these events provide numerous informative presentations and networking opportunities.