The Feds Aren’t Done With Cannabis

17 Feb The Feds Aren’t Done With Cannabis

As more and more states legalize cannabis in some form or another, and as more and more Senators and Representatives introduce legislation that would relax the federal pot laws, it’s important not to lose sight of reality: cannabis is still a Schedule I drug and is unlawful under federal law. That said, in the years since cannabis has become legal in various states, the federal government has taken an increasingly less active role in enforcement in those states. Sure, the feds could start ramping up enforcement even against state-lawful operators, but it doesn’t seem like that’s going to happen any time soon.

To understand the future of federal pot enforcement, we need to look back a few years. Most readers of this blog are familiar with the Cole Memo, an Obama-era Department of Justice policy memo which essentially says that the federal government wouldn’t prioritize marijuana enforcement where operators follow state laws and would instead follow focused enforcement priorities. Since President Trump took office, Attorney General Jeff Sessions rescinded the Cole Memo but didn’t go full-enforcement, instead leaving it up to more local federal authorities to decide whether to enforce. But Sessions was removed, and the newly appointed William Barr has indicated that he probably isn’t going to spend federal resources enforcing the Controlled Substances Act against state-lawful operators.

What is clear about future enforcement is that until the Controlled Substances Act (“CSA”) is amended to de-schedule cannabis, the feds will still be targeting cannabis businesses that don’t follow state laws. Just last month, an owner of an unlicensed cannabis company in Washington State pleaded guilty to crimes in federal court stemming from the operation of a dispensary without a state license. This plea followed an investigation, which obviously means that federal offices are investigating what they view to be criminal activities. We wouldn’t expect this to stop anytime soon, and so unlicensed operators (either in state which still have prohibition or in states with licensing regimes) will need to worry about federal—and state—enforcement.

It’s less clear how the federal government will handle state-lawful operators who violate state law—in other words, will the federal government allow the states to deal with violations of state law, or will they step in and interfere? Because of the CSA, any sale of cannabis is federally prohibited, so state-licensed cannabis businesses that make illegal sales risk both federal and state enforcement. It seems, however, that unless there is serious or egregious misconduct by a state-licensed operator, the federal government will keep deferring to the states.

One agency that those rules may not apply so much to is the federal Food & Drug Administration (“FDA”). After President Trump signed the Agriculture Improvement Act of 2018 (or “Farm Bill”), the FDA (the same day) released a memo saying it retains jurisdiction over hemp and other cannabis products in foods. Pretty much immediately thereafter, the FDA began enforcing its position. It’s certainly plausible that the FDA could step in if manufactured cannabis products (especially edibles) contain what the FDA views as prohibited hemp-derived CBD, or if manufactured cannabis products make false health claims (we already know that the FDA has in the past sent a number of warning letters to state operators).

The future of federal enforcement isn’t completely hashed out. Until the CSA is amended, however, it’s not going to end. Stay tuned to the Canna Law Blog for more updates.