Smoke and Mirrors? An Update on Sessions, Federal Enforcement Priorities, and State-Legal Cannabis
On January 4, 2018, U.S. Attorney General Jeff Sessions single-handedly demolished the federal government’s former cannabis enforcement framework under the 2013 Cole Memo (“Cole Memo”). The Cole Memo set forth eight specific enforcement priorities the Department of Justice (“DOJ”) would follow in states with medical and/or adult use cannabis laws and regulations finally bringing some form of order to the state-federal cannabis conflict. In California, Sessions’ rescinding of the Cole Memo was particularly grating where adult use sales had commenced only three days prior. In addition, how California’s U.S. Attorneys (in each of its four districts) will enforce federal cannabis laws in the future remains unclear.
The U.S. Attorney for the Northern District of California, Brian Stretch, resigned on January 3, 2018 to join a private firm. Stretch’s replacement, Alex Tse, was only appointed on January 7, 2018. Tse has not made any public statement about the rescinding of the Cole Memo. The Central District is a populous jurisdiction that includes the counties of Los Angeles, Riverside, San Bernadino, Ventura, Santa Barbara, and San Luis Obispo. Only two days before rescinding the Cole Memo, Sessions appointed Nicola Hanna as the U.S. Attorney for the Central District. Hanna does not seem to have much written history regarding his views on cannabis, but the fact that Sessions picked him and specifically called him out for “taking on drug traffickers” is not the most positive sign for cannabis operators. In the Eastern District, McGregor Scott, also a recently-named U.S. Attorney, has actually been a U.S. Attorney in the past, having prior experience in the Northern District of California. He did not earn positive marks from the cannabis community however, as he pursued aggressive cannabis prosecutions in the mid-2000s. Finally, Adam Braverman was named U.S. Attorney for the Southern District of California in November 2017. He is most well known for international cartel work as well as other types of organized crime. On January 4, Braverman made a public statement in support of the Sessions Memo, saying: “The Attorney General’s memorandum . . . returns trust and local control to federal prosecutors in each district when it comes to enforcing the Controlled Substances Act.”
At the beginning of March, Sessions finally shined some very brief light on the DOJ’s current enforcement priorities in the wake of his rescinding of the Cole Memo. Reportedly, the DOJ will not waste its time or money on “small” or “routine” marijuana cases but will instead focus on bigger fish in the context of marijuana, like drug cartels and larger drug rings and conspiracies. Still, Sessions made no mention of whether or not state-legal marijuana businesses would get any kind of special treatment or whether their prosecution would amount to “routine” marijuana cases.
Industry and media reactions to Sessions’ retraction of all DOJ guidance on marijuana enforcement ranged from treating the announcement as nothing more than a hollow, political threat to claims that it was the first and significant step in an organized crackdown of the entire state-legal marijuana industry. What makes things even more troubling (and speculative) is that the “Sessions Memo” is short on details—it is a single page that does not mandate that U.S. Attorneys do anything specific regarding marijuana businesses; it just withdraws the earlier marijuana-specific guidance enforcement memoranda (i.e., the Cole Memo, the 2014 DOJ guidance on financial crimes, the Wilkinson Statement for Native American tribes, the first Cole Memo from 2011, and the 2009 Ogden Memo) and directs U.S. Attorneys to treat marijuana sales like any other federal crime (though the Sessions Memo says that marijuana crimes are still serious crimes). And while Sessions refers in his memo to the principles of enforcement in the U.S. Attorneys’ Manual, that document only reinforces the level of prosecutorial discretion and authority that each U.S. Attorney has and already had. Consequently, we could see 93 different enforcement policies across the multitude of states that have marijuana legalization or medicalization, meaning individual enforcement priority policies for each U.S. Attorney in accordance with the resources of their district.
According to the Associated Press on March 10th, while engaging in a question and answer segment after giving a speech at Georgetown’s law school, Sessions said that:
“Federal prosecutors won’t take on small-time marijuana cases, despite the Justice Department’s decision to lift an Obama-era policy that discouraged U.S. authorities from cracking down on the pot trade in states where the drug is legal . . . Federal law enforcement lacks the resources to take on ‘routine cases’ and will continue to focus on drug gangs and larger conspiracies . . .”
Importantly, Sessions also noted that “federal prosecutors ‘haven’t been working small marijuana cases before, [and] they are not going to be working them now.’” Of course, now that each U.S. Attorney has the clarification from on-high to enforce federal marijuana laws in their jurisdictions according to their own prosecutorial discretion and their district’s resources and priorities, Sessions’ statements do not tell us whether individual U.S. Attorneys will or will not prosecute state-sanctioned cannabis businesses, though for most U.S. Attorneys such prosecutions are not likely at the top of their list given the political precariousness of punishing state-sanctioned, voter-approved marijuana businesses. It also remains to be seen as to whether or not the 2014 FinCEN guidelines, the guidelines that essentially permit financial institutions to offer bank accounts to marijuana businesses, will hold in light of the take down of the Cole Memo. In turn, it is still unknown as to whether or not individual U.S. Attorneys will pursue criminal charges against financial institutions that are following those guidelines.
Despite Sessions’ comments about DOJ enforcement priorities, current federal law and the Sessions memo leave the door open for the prosecution of state law-abiding marijuana operators really at any time, including in the state of California, which is set to be one of the largest cannabis marketplaces in the world. The fate of marijuana operators, investors, and ancillary service providers in every state hangs on the prosecutorial whims of the U.S. Attorney in their districts. And while it is somewhat reassuring to hear from our nation’s top prosecutor that the DOJ isn’t interested in seemingly low-level marijuana crimes that may not include state-approved commercial cannabis activity, we will have to wait and see as to whether or not U.S. Attorneys follow suit.