DEA and cannabisWe have our doubts that Sean Spicer’s comments last week will morph into active federal enforcement against marijuana businesses. Any federal action that interferes with state marijuana laws would be incredibly unpopular. Presidential administrations often use the media to float policy proposals to get a feel for how the public and Congress will react. In late January, the administration circulated a draft executive order that would have decreased discrimination protections for LGBT people, and the administration ended up scrapping it. Unlike immigration, marijuana policy was not a centerpiece of the Trump campaign. If reaction from the public and other government leaders is strong enough and swift enough, we may well see the administration avoid the topic.

On the other hand, the Trump administration has been savvy at manipulating the media. When there are stories that get real traction that can move voters (Trump’s Russia ties, incompetence with foreign leaders, etc.), the administration seeks to shift the media conversation. Much like the attacks on the media, moving on marijuana could be an attempt to move the national conversation away from the issues that truly scare them.

If it turns out that the administration wants to move more strongly against recreational marijuana businesses, they have a few distinct options in how to proceed.

  1. Boots on the ground law enforcement — This is the scariest option for marijuana business owners, at least if they are one of the unlucky few. It also is the most random and smacks the most of injustice. There are just under 5,000 special agents in the Drug Enforcement Agency. Most of these agents are tasked with working on things other than marijuana, like heroin, money laundering, and organized crime. The DEA does not have enough resources to use its agents to bust down doors of cannabis businesses right and left, but that doesn’t mean they couldn’t come in and make a few examples. It wouldn’t be effective at shutting down the cannabis industry, but it would be effective at creating fear.
  2. Asset Forfeiture — The federal government can seize any assets used in the commission of drug crimes or gained from the sale of drugs, including marijuana. Many marijuana businesses, especially cultivation companies, spend millions of dollars on their facilities, including greenhouses, HVAC equipment, lights, moisture control, etc. All this property is subject to federal seizure. The mere threat of seizure tends to affect capital markets as well. Lenders don’t value collateral at market rates because of the chance that it can be seized by the federal government. But just like boots on the ground enforcement, asset forfeiture cannot be used against thousands of state-legal marijuana businesses at once. Asset forfeiture cases can involve significant litigation, and it would take a huge influx of legal power in the Department of Justice to manage a significant increase in federal forfeiture cases.
  3. Withdrawing or Amending the Cole Memorandum — Remember that the Cole Memorandum from August 2013 was written as guidance to U.S. Attorneys on how to exercise their prosecutorial discretion. If the current administration lifted the Cole Memo, it may not mean we would see uniform enforcement of federal law. Instead, we may return to how things looked in 2011 and 2012, where each federal judicial jurisdiction had a different enforcement criteria determined by that district’s U.S. Attorney. In Washington, we had a relatively hands-off U.S. Attorney in western Washington and a significantly more aggressive U.S. Attorney in Eastern Washington. The law was not enforced uniformly even within the state, and California had it worse with its four judicial districts. Amending the Cole Memo could increase enforcement efforts if the administration puts new enforcement priorities in place. For example, they could seek to enforce against any marijuana business that gets too large and seek to limit sales growth.
  4. Coerce Local Law Enforcement — In interpreting the U.S. Constitution’s implementation of our federalist system, American courts have developed an anti-commandeering and anti-coercion jurisprudence. In short, the federal government cannot force state legislatures or state officials to act in certain ways. This limits the federal government’s ability to achieve state action through coercion. If the federal government wants to tie federal funds to state action, for instance, it must show links between the conditioned funds, the federal interest, and the state action in question. The classic example is that the federal government can coerce states into passing seatbelt laws by threatening to withhold highway funds. In the same way, the federal government could potentially threaten to withhold grants to local law enforcement agencies that don’t cooperate with federal government anti-marijuana law enforcement efforts. Any such action would be met with a constitutional challenge, but we could see a situation where a state governor and attorney general want to defend a state’s marijuana laws, while local law enforcement are coerced into assisting federal enforcement efforts.

All of this can seem frightening in a vacuum, but we will just have to wait and see what the Department of Justice says and does. This entire marijuana enforcement scare could (and probably will) end up amounting to nothing, but it is vital everyone stay engaged with the issue and make sure their government representatives know where they stand.