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.
Another breakthrough for the cannabis space occurred on Tuesday, February 27, 2018, when Toronto-based Cronos Group Inc. began trading on the Nasdaq Stock Market. (MJN:CN). This marks the first listing of a company focused purely on cannabis on a major U.S. stock exchange. The listing of Cronos comes within two months of the memorandum issued by Attorney General Sessions that rescinded the federal government’s previous guidance regarding enforcement of state-lawful cannabis activities under the Cole Memorandum. That earlier guidance is credited with providing the cannabis space with a window of opportunity for the warp-speed growth the space has seen in recent years. The Sessions memo was intended to slow the growth of the cannabis space, especially with respect to the capital markets. The Nasdaq listing of Cronos suggests that 2018 could be another strong year for cannabis-related investments; 2017 was believed to have resulted in approximately $2 billion in cannabis-related investments in the U.S.
Duane Morris is presenting a series of monthly webinars throughout 2018 to discuss issues affecting the cannabis industry. Each session will cover a specific subject and feature a “Hot Topics” segment to cover recent developments in the industry.
Join us for the kickoff session on Monday, January 29, 2018, covering topics impacting the cannabis industry.
Cannabis 101: Update on the Federal Enforcement & State Regulatory Environment
Attorney General Jeff Sessions’ Memo Rescinding the Cole Memo—What Has Changed?
How Federal Enforcement Works from the Perspective of a Former Federal Prosecutor
Federal Legislative Update—Congressional Attempts to Protect the Cannabis Industry
State Regulatory Actions and How Courts Are Interpreting Cannabis Regulations
Jennifer Fisher, Partner, Duane Morris LLP
George D. Niespolo, Partner and Co-Chair, White-Collar Criminal Defense, Corporate Investigations and Regulatory Compliance Division, Duane Morris LLP
On January 8, the U.S. Attorney for the District of Massachusetts, Andrew E. Lelling, noted in an official statement that he “cannot provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.” This appears to be the strongest negative statement yet from a federal prosecutor following US Attorney General Jeff Sessions’ recent rescission of a series of memoranda which had suggested low prioritization of prosecution of those in the cannabis industry. Sessions is offering each local US Attorney the discretion to pursue prosecutions of state-legal actors as long as they follow long established Department of Justice guidelines for all prosecutions. Other US Attorneys have, for the most part, stayed silent on the issue, confirmed no change in approach, or said they would study the issue. Continue reading Massachusetts US Attorney Issues Warning to Cannabis Actors→
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.