By Jerry Cornfield and Jim Davis
OLYMPIA — A wave of uncertainty crashed upon the state’s legalized marijuana industry Thursday when U.S. Attorney General Jeff Sessions rescinded policies which had made it possible to grow, sell and buy pot without fear of arrest by federal agents.
Sessions announced erasure of policies enacted under President Barack Obama which steered the Department of Justice away from heavy-handed enforcement of federal laws barring production and sale of marijuana, clearing an obstacle for Washington where voters legalized recreational marijuana use in 2012.
The move infuriated state political leaders who vowed to fend off any effort by the federal agency to crack down on those engaged in the business.
“Given our ability to defeat terrible ideas of the Trump Administration, we should have confidence we can do it again,” Gov. Jay Inslee told reporters gathered for a preview of the upcoming legislative season hosted by the Associated Press.
But Inslee didn’t express concern federal agents will be immediately raiding state-licensed pot shops and marijuana-growing operations.
“This is just a creation of uncertainty. You should not push the panic button in your individual lives or your businesses,” he said. “This may not mean any change in federal policy in the state of Washington. We hope it does not.”
GreenRush marijuana grower Mark Flanders pays close attention to news that affects his business located north of Snohomish.
He’s not concerned Thursday’s announcement will dent his plans to increase production. He grows about 500 pounds of marijuana a year and he is hoping to grow 600 this year.
“I don’t think the Justice department has enough money or manpower to go after everybody in the industry,” Flanders said. “The Pandora’s box is opened. They’re not going to stop it.”
He thinks Sessions is out of touch, noting he was appointed a federal prosecutor in the 1980s during the height of the Reagan-era War on Drugs.
2020 Solutions Vice President Aaron Nelson wasn’t surprised by the announcement, just the timing.
“It was a little unexpected that it would come out, especially now,” he said. California’s own voter-approved recreational marijuana law started just three days before the announcement.
Bellingham-based 2020 Solutions has four locations around the state, including three in Whatcom County, and another one set to open near Spokane this month.
Nelson’s main concern about the announcement is that banks, already skittish about working with the marijuana industry, will pull back even further.
“At the very beginning there were no banks that would even touch cannabis money,” he said. Slowly, 2020 Solutions built up relationships with a handful of banks. But he fears Sessions’ announcement didn’t help.
“We’ve gotten information that they’re going to stick with us for now,” Nelson said. But he worries they might now hesitate to take on new clients in the industry.
Laura Dana, owner of The Vault Cannabis, is of a similar mindset.
She said she is worried that this change in federal policy may scare away investment in the industry or worse force the banks that are working with the industry to steer clear.
Dana said the industry in Washington is on the cusp of being allowed to use debit and credit cards. Taking the cash out of the business would just make the industry safer for everyone.
“These are things that are helping secure the industry,” Dana said. “Instead it’s kind of taking it backwards.”
Dana owns two stores, one in Lake Stevens and another in Spokane, with plans for a third in Arlington.
She’s not sure why the administration is making this a priority.
“This is a kind of an anti-Republican policy,” Dana said. “What ever happened to state’s rights first?”
Washington voters in 2012 legalized marijuana use for adults 21 years and older. And in 2016 the state merged its recreational and medical marijuana industries under one regulatory scheme.
Tax collections from the industry will generate an estimated $750 million in revenue for the current the two-year state budget. Most of those dollars are put in the general fund with the bulk spent on health care, mental health and education programs.
“Rightly or wrongly we need that money to take care of the people in our state,” said Sen. Ann Rivers, R-La Center, who called Sessions’ action misguided. “We have almost eradicated the black market in Washington state. Why would we go away from that?”
Sessions rescinded directives issued in 2009 and 2013 — known as the Ogden and Cole memos respectively — that served as federal guidance to not intervene or interfere where medical and/or recreational use of cannabis was legal.
It is the Cole Memo which has been the guiding doctrine for regulations imposed in this state.
It directs states to, among other things, trace the cannabis product from seed to sale to prevent its diversion out of state or into the hands of drug dealers and cartels for illegal distribution. The memo also requires strong enforcement to prevent minors from getting access to marijuana.
While Sessions’ action gets rid of the memos, he did not order federal authorities to begin actively investigating the growing, producing, selling or buying marijuana. Rather, he said he would leave it up to the discretion of U.S. Attorneys “to use previously established prosecutorial principles that provide them all the necessary tools to disrupt criminal organizations, tackle the growing drug crisis, and thwart violent crime across our country.”
In a statement issued Thursday, Annette Hayes, the U.S. Attorney for western Washington, appeared to signal the office will not change its approach.
“We have investigated and prosecuted over many years cases involving organized crime, violent and gun threats, and financial crimes related to marijuana,” she said.
“We will continue to do so to ensure — consistent with the most recent guidance from the Department — that our enforcement efforts with our federal, state, local and tribal partners focus on those who pose the greatest safety risk to the people and communities we serve,” she said.