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.
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According to The Fresh Toast, US Attorney General Jeff Sessions is now hinting at expanding enforcement of federal cannabis laws. The report indicates that, at a news conference this past Wednesday, Sessions said they are looking “very hard right now” at possible changes to the Cole Memo. That 2013 memo adopted a policy to de-emphasize enforcement activities against those complying with state cannabis laws, with certain exceptions. He added, “We’ll be working our way through to a rational policy. But I don’t want to suggest in any way that this department believes that marijuana is harmless and people should not avoid it.”
Sessions has used various methods to seek to interfere with state legal cannabis. He is attempting to stop the renewal of the Rohrabacher-Blumenauer amendment to the annual budget bill. That amendment prohibits the spending of federal money to bring enforcement action against those complying with state medical cannabis laws. It is not clear whether the amendment, passed annually since 2014, will survive the current budget battle. The existing continuing resolution expires in several weeks along with the current budget.
The Attorney General has also put governors in adult use states on notice to ensure they are working hard to enforce their local laws, implying he might come in if they do not, something permitted by the Cole Memo. That said, Sessions’ boss, the President, has said he is “100%” in favor of medical cannabis and believes adult use should be up to the states. Therefore it seems Sessions would not be acting at Trump’s direction if he were to do something dramatic. Watch this space.
Last week the US Senate Appropriations Committee voted to renew the Rohrabacher-Blumenauer amendment when it expires September 30. That amendment, renewed annually since 2014, blocks the US Department of Justice from using federal funds to interfere with the implementation of state medical cannabis laws. The passage included 16 Republicans, showing this as a bipartisan issue in the Congress.
This early vote is important because US Attorney General Jeff Sessions has asked the Congress not to renew the amendment. Sessions also commissioned a task force on drugs and violent crime whose final report is expected soon. He says in the meantime he has been “on a rolling basis” implementing some of the as yet unrevealed recommendations. Many believe the task force will link cannabis to violent crime and push for stronger sentences for people who grow or sell marijuana.
It appears, however, that there remains strong bipartisan support in Congress to retain the restriction on federal spending for now, and that the amendment will be renewed as part of the final Congressional appropriations in September. Stay tuned.