Ahead for marijuana: California goes legit and Canada may be next

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2017 was the year the other shoe didn’t drop on the nation’s marijuana industry.

Under President Obama, the federal government grudgingly accepted the states’ gradual liberalization of their marijuana policies. While marijuana remained illegal under federal law, an increasing number of states began to authorize its production, distribution and use.

In 2013, Eric Holder’s Justice Department ended years of uncertainty by announcing that, so long as the states were regulating marijuana robustly, the federal government would not enforce federal criminal laws against those acting in compliance with state laws permitting the drug. The next year, Congress passed a spending rider giving federal prosecutorial forbearance the power of law — the Justice Department was enjoined from spending money allocated by Congress to interfere in medical marijuana law reform in the states.

 

This official hands-off policy from the federal government clearly had an impact in the states. By the time Obama’s second term was coming to a close, eight states had voted to tax and regulate marijuana for adult use, and more than half the states had authorized marijuana for the treatment of certain medical conditions. It seemed that a tipping point was fast approaching and that the days of the federal marijuana prohibition itself were likely numbered.

Those hopes were significantly dashed, however, when Donald Trump  became the 45th president and appointed Jeff Sessions, a long-time marijuana opponent, as attorney general. Some worried that Sessions would reverse Holder’s policy of permitting state experimentation with marijuana law reform and would bring the full brunt of federal law enforcement to bear on individuals and businesses, notwithstanding state laws purporting to authorize their conduct.

As the Trump administration ends its first year in office, however, little if anything has changed. Although Sessions’s rhetoric against marijuana and those who consume it has continued unabated, the Obama administration’s permissive approach to marijuana law reform remains the law of the land. When asked about his administration’s policy on marijuana in November, Sessions allowed that it was no different from that of his predecessors.

In fact, while Sessions has undone many of his predecessors’ enforcement memoranda, he has left intact those regarding marijuana. Furthermore, Congress continues to extend its prohibition of Justice Department enforcement actions in each short-term spending bill it passes, protecting at least medical marijuana states from the prospect of a federal crackdown.

Thus, as 2017 becomes 2018, marijuana law reform in the states enjoys exactly the same protections it did a year ago. Why is that? For one thing, there is only so much that the federal government can do about the states choosing to legalize marijuana. Neither by fiat nor by court order can the federal government require the states to criminalize marijuana or to assist the federal government in doing so.

The only real power the federal government has in this arena is the ability to enforce its own criminal laws, and even there the government’s clout is quite limited. Nearly all drug enforcement happens at the state and local level and it would appear that the federal government has neither the resources nor the will to change that.

And there is reason to believe that the prospect of initiating a criminal crackdown in marijuana states will be more, rather than less, daunting in the years ahead.

With a recreational marijuana industry opening its doors in California on Jan. 1, the genie of state marijuana law reform will become that much harder to get back into the bottle. The opening of retail stores in California is a sign that the nation’s largest marijuana market is finally going legit. California has been the nation’s leading producer of marijuana for generations, but has gotten serious about taxing and regulating that industry only in the last few years.

If all goes well, the industry could generate tens of thousands of jobs and as much as $1 billion in tax revenue. Meanwhile, with support for marijuana legalization at all-time highs, law reform is expanding around the country, with many state legislatures gearing up to consider legalization bills. As marijuana law reform moves from the deep blue West into purple and even red states such as Florida, Maine and Missouri, more state governments, business people and individuals will have a stake in legalization’s survival.

Events are moving quickly on the international level as well. Canada is expected to implement legalization nationwide on July 1, 2018, creating a 30 million-person market and a magnet for capital wary of investing in an American marijuana industry built on legal quicksand. Canadian legalization also threatens to undo the existing treaties that prohibit the legalization of marijuana and could lead to a cascade of countries looking to liberalize their own laws.

With each day that passes, therefore, marijuana law reform becomes more difficult for the federal government to shut down. While the events of the last few years have made fools of those who try to predict what Trump and his administration will do, practical and political considerations all seem to point in the direction of continued federal acquiescence to an increasingly popular policy in the states.

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