WASHINGTON (Reuters) – The U.S. Justice Department on Thursday rescinded an Obama administration coverage that had eased enforcement of federal marijuana legal guidelines in states that legalized the drug, as a substitute giving federal prosecutors extensive latitude to pursue felony prices.
The motion by Attorney General Jeff Sessions may have damaging penalties for the burgeoning marijuana trade within the six states together with California and Colorado which have legalized the drug for leisure use, plus dozens of others that allow medicinal use.
Justice Department officers declined to say whether or not they may take authorized motion in opposition to these states, saying additional steps have been “still under consideration.”
Federal regulation nonetheless prohibits marijuana at the same time as some states transfer to legalize it. White House spokeswoman Sarah Sanders stated President Donald Trump’s prime precedence was implementing federal regulation “whether it’s marijuana or immigration.”
The coverage change, detailed by Sessions in a one-page memo to federal prosecutors nationwide, got here three days after California formally launched the world’s largest regulated industrial marketplace for leisure marijuana.
The administration’s motion drew condemnation from marijuana legalization advocates and politicians in each events in states the place the drug has been legalized. They stated it trampled on the rights of voters in these states and created uncertainty about how strictly federal medicine legal guidelines can be enforced.
The transfer raised questions on the way it may impression tax revenues in states that allow some kind of authorized marijuana use. It additionally created uncertainty for banks, already fearful about enterprise relationships with the marijuana trade as a result of of considerations they may run afoul of anti-money laundering guidelines.
There has been a surge in legalization of marijuana on the state stage lately. Other states that allow the regulated sale of marijuana for leisure use embody Washington, Oregon, Alaska, and Nevada. Massachusetts and Maine are on observe to take action this yr.
The coverage put in place underneath Democratic former President Barack Obama, outlined by then-Deputy Attorney General James Cole in a sequence of memos, had discouraged federal prosecutors from pursuing marijuana-related felony circumstances in states that had legalized the drug.
Sessions stated in an announcement that the Obama-era coverage “undermines the rule of law” and advised federal prosecutors in his memo to “follow the well-established principles that govern all federal prosecutions” in deciding which marijuana-related actions to prosecute.
Some prosecutors in legalization states issued statements on how they might proceed. A U.S. legal professional in Colorado stated he wouldn’t change his method towards marijuana prosecutions, whereas a U.S. legal professional in Massachusetts stated he would pursue federal marijuana felony circumstances.
The Trump administration’s motion appeared incongruous with feedback that Trump, a Republican, made throughout the 2016 presidential marketing campaign. Trump advised a TV information reporter that the choice to legalize marijuana must be left “up to the states.”
‘DEFIES FACTS AND LOGIC’
California Lieutenant Governor Gavin Newsom, a Democrat, stated his state will pursue “all legal, legislative and political options to protect its reforms and its rights as a state.” He stated the Trump administration’s place “defies facts and logic.”
Republican Senator Cory Gardner of Colorado stated on Twitter that the administration’s motion “directly contradicts what Attorney General Sessions told me prior to his confirmation.”
Gardner stated he would take all steps essential to struggle the measure, together with presumably holding up the Senate from voting on pending Justice Department nominees.
The Obama-era coverage acknowledged marijuana as a “dangerous drug,” however stated the Justice Department anticipated states and localities that approved varied makes use of to successfully regulate and police it.
Among corporations which have invested within the trade, Scotts Miracle-Gro, a gardening product producer, has spent tons of of hundreds of thousands of to amass corporations that promote soil, lighting, fertilizer and different merchandise to marijuana growers. Shares within the firm closed down about 2.three p.c. Several Canadian marijuana-related shares additionally fell.
Marijuana startup corporations stated they have been now bracing for a deceleration in funding.
“In the short term, this news will further scare away investors, which will, in turn, slow down cannabis entrepreneurship,” stated Nicolas Ruiz, co-founder of Cloudponics, a San Francisco startup whose expertise can be utilized to develop marijuana.
Funding for such startups has been on an upswing since Colorado’s legalization of leisure marijuana use in 2014. Since then, the trade has amassed practically $1.three billion in fairness funding for marijuana startups, with greater than $600 million in 2017 alone, in keeping with analysis agency CB Insights.
The Sessions memo didn’t distinguish between enforcement in opposition to marijuana used for leisure versus medicinal functions. But his division’s potential to pursue felony prices associated to medicinal marijuana stays unsure.
Since 2014, federal lawmakers have connected language to spending laws that explicitly bars the Justice Department from spending assets to implement circumstances in states the place medicinal marijuana is authorized.
(In 20th paragraph, corrects to say hashish trade has raised practically $1.three billion in fairness funding, not non-public fairness funding.)
Reporting by Sarah N. Lynch; Additional reporting by Susan Heavey in Washington and Salvador Rodriguez in California; Editing by Will Dunham