Cannabis industry roiled by White House comments on enforcement

By Trevor Hughes , USA TODAY

Published on Feb. 23, 2017

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DENVER — The White House threw the country’s marijuana industry into a panic after announcing Thursday that there would likely be “greater enforcement” of federal anti-cannabis laws under President Trump.

Speaking to reporters, White House spokesman Sean Spicer said the Trump administration would not use federal laws against medical marijuana users, in part because Congress has already banned it from doing so. But he made a distinction between medical and recreational use and said: “I do believe you’ll see greater enforcement” of federal laws against recreational marijuana use.

The country’s fast-growing marijuana industry has been stuck on edge for months, trying to decipher how the new administration will approach cannabis but generally hopeful that the president was serious when he said he believed the states should decide such things.

Spicer signaled a potentially major shift in enforcement: “There is still a federal law that we need to abide by in terms of recreational marijuana and other drugs of that nature.” He did not provide a timeline or any specifics about how a crackdown could occur. Every state-level marijuana marketplace has been operated illegally, as far as the federal law is concerned, but Justice Department prosecutors have largely left them alone.

Later, Spicer seemed to suggest the matter was less settled than he initially indicated, and referred reporters to the Justice Department for comment and follow up. The Justice Department declined to comment to USA TODAY Network reporters.

Still, Spicer’s initial comments were what reverberated across the country, through an industry all-too-fearful of what the Trump presidency might do to their efforts.

Legalization skeptics welcomed the news and said they hoped the Trump administration would prioritize the nation’s public health.

New Attorney General Jeff Sessions is generally considered a marijuana opponent, but Trump during the campaign said he thought such decisions should be left to states, a policy set by President Obama. If carried out by the Justice Department, stricter enforcement would mark a significant policy shift and risk putting tens of thousands of “budtenders,” growers, distributors and brokers out of business.

Alaska, Colorado, Oregon, Washington, Maine, Massachusetts, Nevada and California voters have all approved legal pot even though it remains illegal under federal law.

Colorado Rep. Jared Polis, a Boulder-area Democrat, criticized Spicer’s comments: “Now either the president is flip-flopping or his staff is, once again, speaking out of turn — either way these comments leave doubt and uncertainty for the marijuana industry, stifling job growth in my state. The public has spoken on recreational marijuana, we’ve seen it work in Colorado, and now is the time to lift the federal prohibition.”

Spicer’s remarks came just hours after the release of a Quinnipiac University pollshowing 71% of Americans would oppose efforts to enforce federal marijuana laws in those eight states. The poll also found that 93% of voters support allowing the use of marijuana for medical purposes and 59% support making it legal for all purposes. Congress has prohibited the Justice Department from interfering with states’ medical marijuana programs but has remained silent about recreational marijuana.

“If the administration is looking for ways to become less popular, cracking down on voter-approved marijuana laws would be a great way to do it,” said Tom Angell, chairman of the pro-legalization Marijuana Majority.  “On the campaign trail, President Trump clearly and repeatedly pledged that he would leave decisions on cannabis policy to the states. With a clear and growing majority of the country now supporting legalization, reneging on his promises would be a political disaster and huge distraction from the rest of the president’s agenda.”

States that have legalized recreational marijuana argue their rules have reduced black-market sales and ensure that marijuana business deals happen safely and under the close eyes of tax collectors. Despite being illegal in most states, recreational marijuana remains widely popular, bought and sold on the black market through illicit cash transactions that enrich criminals.

“It is hard to imagine why anyone would want marijuana to be produced and sold by cartels and criminals rather than tightly regulated, taxpaying businesses,” said Marson Tvert, a spokesman for the pro-legalization Marijuana Policy Project.

Legalization supporters say they’re mystified why Trump, who ran on a platform of less government regulation, and increased states’ rights and national job creation, would be willing to change course. They’re hoping the president will change his mind once he learns more. But they also fear marijuana-related stocks would tank Friday as word spread of the new approach.

The legal cannabis marketplace is estimated to create more than 250,000 new jobs for American workers and $24 billion in sales by 2020, according to a new analysis by New Frontier Data, which tracks industry trends. New Frontier based its estimates on a study commissioned by Colorado state officials.

“I think after the feds learn how well-regulated Washington’s adult use and medical cannabis markets are, they will leave it status quo,” said Ian Eisenberg, the founder of Uncle Ike’s, a cannabis retailer in Seattle.

Many industry experts say they think the country has come too far to roll back legalization, especially since California’s voters just approved it in November. Among the supporters of legalization is Peter Thiel, whose Founders Fund in 2015 made a multimillion-dollar investment in Privateer Holdings, the world’s first private equity firm investing exclusively in the legal cannabis market. Thiel was also an early investor in Facebook, Lyft and Spotify.

“I don’t think it’s realistic for Trump to wage an all-out war against recreational marijuana,” said Aaaron Herzber, a partner and general counsel at CalCann Holdings in Santa Ana, Calif. “My guess is that this is saber rattling.”

Legalization critics say the country is improperly permitting large businesses to operate in the marijuana marketplace, raising concerns that cannabis will become the next Big Tobacco.

“This isn’t an issue about state’s rights, it’s an issue of public health and safety for communities,” said Kevin Sabet of Smart Approaches to Marijuana, which generally opposes recreational marijuana. “We’re hopeful that the Trump administration will pursue a smart approach to enforcement that prioritizes public health and safety over political ideology.”

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