In the eight states that allow recreational marijuana use, and over two
dozen states that authorize medical marijuana use, state and federal law
are conflicting. And even further, Congress, since 2014 has prevented
the Department of Justice from interfering with state medical marijuana
laws, essentially creating conflict within the federal government itself.
And what does this mean for the marijuana industry? It means Federalism
could be legal cannabis’s saving grace in the brinks of the second
war on drugs and a rapidly expanding federal government.
James Madison wrote, “The powers delegated by the proposed Constitution
to the federal government are few and defined.” The text of the
10th Amendment to the United States Constitution speaks to Madison: “The
powers not delegated to the United States by the Constitution, nor prohibited
by it to the States, are reserved to the States respectively, or to the
people.” If one were to screen the text of the Constitution, nowhere
in that document would one find a controlled substance mentioned. At the
core of Federalism is the proposition that those closest to the people—largely
state governments— should be the decision-makers for the people,
by the people.
Uniformity of the states was not the Founder’s purpose in creating
the Constitution. Colorado’s legalization of pot should be viewed
completely independently from Utah’s continued ban: the United States
is supposed to operate on a system where the states determine which rules
best suit their citizens.
Originally reported by the
Washington Post on April 13, President Trump and Colorado Senator Cory Gardner ended a
standoff over the Trump administration’s push-back on state marijuana
laws. Senator Gardner reported:
“I received a commitment from the President that the Department of
Justice’s rescission of the Cole memo will not impact Colorado’s
legal marijuana industry. Furthermore, President Trump has assured me
that he will support a federalism-based legislative solution to fix this
states’ rights issue once and for all.”
Since Attorney General Jeff Sessions announced the rescission of the Cole
memo in January of this year, Corey Gardner has been blocking nominations
for positions within the Department of Justice. In doing so, Gardner affected
around twenty positions within the Department. In response to President
Trump’s offer of peace, Gardner announced he will be lifting his
remaining holds on DOJ nominees. White House press secretary Sarah Sanders
confirmed the accuracy of Gardner’s statements during a press briefing.
However, industry operators should err on the side of caution, as a bill
has not been finalized, and there is no indication that the Department
of Justice was even consulted before President Trump made his promise
to Gardner. Further, President Trump’s “promise” could
entail merely declining to veto any legislation Gardner helps push through
to his desk. And even further, a promise is a declaration to do something,
not a guarantee, and President Trump is not unfamiliar with using empty
promises to pursue his personal agenda. For instance, at an open-to-the-press
meeting in January with lawmakers on immigration, Democrats momentarily
believed they had reached a deal with the President when Senator Feinstein
asked the President his position on moving forward with a clean DACA bill
now and undertaking a comprehensive immigration reform later. Trump answered,
“Yeah, I would like to do that. I think a lot of people would like
to see that.” But it was not long before the House Majority Leader
“clarified” that the President believed a “clean”
bill would include border security.
The “peace on pot” between the Colorado Senator and President
Trump could be a step toward rectifying the profound secondary affects
of federal drug laws, including banks and investors’ reluctance
to work with industry operators for fear of violating federal law. However,
the current reality is that the IRS continues to audit the industry and
rigidly enforce 280e, the federal tax measure, which in effect bars cannabis
businesses from qualifying for the standard tax deductions and credits
that provide the groundwork for the success of small businesses in the
United States. On top of that, the Securities Exchange Commission continues
to actively chase securities violations regarding fund raising and investor-related matters.
Even if the feds step down, and allow the states to step up, strict compliance
with state law is more important now than ever for industry operators.
The states and their constituents must demonstrate state regulation of
marijuana is attainable and under control. As Representative Earl Blumenauer
expressed in response to the deal, “Momentum is clearly building
in the states and here in DC. The tide is changing. Now is the time to
redouble our efforts.”
Former DEA task force commander Charles Feldmann, marijuana business attorney,
is your key to compliance. Using his unique background in both state and
federal law enforcement, Mr. Feldmann helps his clients create federal
risk mitigation plans, and advises on maintaining strict compliance with
state-by-state marijuana regulations.