United States: Rescission Of Medical Marijuana Memoranda

Attorney General Jeff Sessions issued a one-page memorandum on January 4, 2018 (the "Sessions Memo") rescinding both the Cole and Ogden Memoranda which essentially established a Department of Justice ("DOJ") prosecutorial safe harbor for medical marijuana businesses that complied strictly with state laws governing marijuana. The most attention-grabbing sentence in the Sessions Memo provides "[g]iven the Department's well-established general principles, previous nationwide guidance specific to marijuana enforcement is unnecessary and is rescinded, effective immediately." Translated into non-lawyer speak, that means anything in the cannabis space touching federal criminal jurisdiction potentially is fair game for prosecution. The Sessions Memo thus thrust into a zone of uncertainty the federal prosecution landscape during this Administration.

The Sessions Memo defers expressly to individual United States Attorneys to determine whether to prosecute the cultivation, distribution and possession of marijuana as they see fit within the framework that existed prior to the widespread legalization of medical and recreational marijuana by state legislators. There have been no changes to federal law, as the Sessions Memo is guidance to the chief federal prosecutors in the 93 federal districts around the country. The Sessions Memo does not mandate any specific dedication of resources to prosecuting marijuana offenses, nor would such a guidance memo do so. Nor does it require U.S. Attorneys to prosecute specific marijuana offenses. Instead, each U.S. Attorney has district-specific independent discretion to decide which marijuana activities to prosecute, if any, and how much, if any, of that office's finite resources will be dedicated to prosecuting marijuana offenses. The result of the Sessions Memo is the marijuana industry, while now facing additional uncertainty, does not appear to be under direct attack; however, only time will tell.

Three recommendations follow logically from this DOJ change in perspective. First, regardless of industry segment, marijuana-related businesses ("MRBs") should review with counsel all elements of company and regulatory compliance programs. Not that compliance programs offer any guarantees, but such demonstrative efforts to work within the framework of existing laws can be persuasive. Second, review with counsel all contracts in use and planned for use to ensure that the agreements reflect the most up-to-date terms and best practices. It is easy for the conduct of business partners unwittingly to cause well-intended relationships and activities to be pulled into an investigative red zone. Third, individuals and MRBs should pay close attention to the US Attorney overseeing that person's or business' federal district to ascertain that US Attorney's philosophical perspective on state legal medical or recreational marijuana businesses. That US Attorney alone will be the decision maker, not a centralized Washington-driven policy.

Implications for Federal and State Criminal Law

The August 2013 Cole and October 2009 Ogden memos, although non-binding guidelines, served as a quasi-safe harbor for MRBsoperating in states where marijuana is legal, either medically or recreationally, as long as the MRBs complied fully with state law. MRBs no longer have the protections of the previous DOJ guidance memos; therefore, it is imperative that MRBs continue to abide by their respective state laws and regulations to minimize the risk of drawing additional attention from federal prosecutors. If a U.S. Attorney in a state intends to pursue marijuana offenses, then that federal prosecutor likely will focus attention first on the "bad actors"—the medical marijuana businesses that are non-compliant with state law. Practically, those "bad actors" would not have benefited from the "safe harbors" operational under prior guidance.

Not all of the marijuana industry's protections have been stripped away by the Sessions Memo. Even without the perceived protections available under prior guidance, the Rohrabacher-Blumenauer Amendment, which prohibits DOJ from using federal funds to prosecute state marijuana programs, remains in effect until at least January 19, 2018. The amendment, formerly known as the Rohrabacher-Farr Amendment, first passed in December 2014, must be renewed annually and was set to expire September 30, 2017. As Congress has continued to pass "continuing resolutions" to keep in place the current federal budget instead of implementing a new budget, Congress effectively has extended the life of the Amendment. The future of the Amendment is uncertain, especially in light of the fact that Sessions previously asked Congress to revoke it. If the Amendment is not renewed, then an era of open-game enforcement may be on the horizon.

Those involved with lawful state MRBs, if faced with a federal or state criminal investigation, must deal with the reality that conventional criminal defense litigation tools may be inadequate. The generally open nature of state legal marijuana businesses will simplify the proof elements for a prosecutor. Counsel will assert states' rights and other defenses, but the prosecutor's burden of proving guilt beyond a reasonable doubt may shift subtly, albeit not as a matter of law, to an expectation that the defendant proves absence of guilt, which is not the legal standard.

Dickinson Wright as a full-service law firm with considerable expertise in white collar criminal defense, in addition to our long-established cannabis practice, is well-positioned to provide guidance for and defense of any marijuana investigations and prosecutions and the preparation and review of compliance programs, including on behalf of MRBs. At the federal level, the marijuana industry always has been illegal, and while the Cole and Ogden memos provided some comfort, they expressly did not legalize the industry. And indeed, the Sessions Memo was no surprise to our experienced practitioners and many in the industry because such an announcement was anticipated with the change in Presidential administrations. Insiders are hopeful that the Sessions Memo will spur federal legislators to pass comprehensive law to eliminate the risk of prosecution and conflict with state laws.

Our experienced lawyers share the view that the Sessions Memo does not change in any significant way the ultimate risk of criminal prosecution that has been looming over the marijuana industry since its inception, as long as the Rohrabacher Amendment remains in effect. Nevertheless, the likelihood of prosecutions increased on Inauguration Day 2017, with the true fate of prosecutions dependent now entirely on each U.S. Attorney's individual position on marijuana. With the status quo subject to change and rapidly evolving, the Firm will continue to monitor the legal landscape and advise our clients accordingly.

With the Sessions Memo bringing focus to what will happen in federal enforcement, industry participants should not lose sight of state law enforcement considerations. Many local law enforcement agencies were hostile towards marijuana legalization in their states. State and federal law enforcement, particularly in the drug enforcement area, have worked cooperatively and closely for decades. The absence of a perceived federal safe harbor may energize state law enforcement authorities either to pursue state cases around the fringes of state law or walk MRB conduct in to federal prosecutors and seek federal enforcement assistance.

Implications for Civil Law

One of the potential risks posed by the revocation of all prior DOJ guidance, including the respective Cole and Ogden memos, is the possible heightened risk of civil forfeiture. In July 2017, Attorney General Sessions implemented a policy strengthening DOJ's civil asset forfeiture program. While much of the discussion has focused upon criminal prosecution, DOJ, working in conjunction with other federal agencies such as the Drug Enforcement Administration, has considerable power to initiate civil forfeiture proceedings. With a much lower evidentiary standard, civil forfeiture proceedings are a tool that can strip monetary resources available to defend against the civil forfeiture proceeding because the forfeiture itself often occurs preemptively, that is, prior to the civil proceeding. In addition, DOJ's initiation of a civil forfeiture proceeding often is a precursor to criminal charges. A party challenged to defend a civil forfeiture proceeding, potentially with monetary resources already restrained and unavailable to defend the criminal investigation, may perceive a strong incentive for targeted parties to simply abandon their businesses.

State by State Implications

In addition to rescinding the Cole and Ogden memos, Sessions announced the interim appointment of several U.S. Attorneys to fill the role until President Trump nominates replacements for the dozens of Obama-era U.S. Attorneys that were asked to resign, or were fired, last year. The interim U.S. Attorneys could be nominated by President Trump to fill the role permanently, or they may be replaced, but ultimately they cannot serve as interim U.S. Attorneys for longer than 120 days. MRBs should pay attention to the views of their interim U.S. Attorneys but be cognizant of the fact that they may be replaced. The landscape is changing and will continue to be in flux until permanent U.S. Attorneys are nominated by the President, confirmed by the Senate, and make their individual views on the marijuana industry known.

Interim U.S. Attorneys have been appointed for the following districts: New Jersey, Rhode Island, Hawaii, The Southern District and Northern District of New York, The Eastern and Western Districts of Louisiana, Minnesota, the Western District of Missouri, the Central District of California, the Eastern District of Washington, the Middle District of Florida, and the Eastern District of Michigan.

The decision by Bob Troyer, the Acting U.S. Attorney in Colorado, signaling that he will not alter his approach to marijuana enforcement is significant. His announcement highlights that the decisions truly will be made on a district by district basis, for better or worse. Although Troyer's statement is encouraging to MRBs in Colorado, he is not a presidential appointee. His decision will have no effect on the U.S. Attorney nominee.

Conclusion

The immediate effect of the Sessions memo is a nuanced and unpredictable landscape, one in which the most knowledgeable lawyers and observers are making educated guesses. Certainly, the upcoming budget bill and extension of the Rohrbacher Amendment is important and may offer the best hope for the cannabis industry. The risk of prosecution has increased, although the likelihood of prosecution may not yet have changed. From the federal government's perspective, MRBs are illegal enterprises, and the likelihood of prosecution is greater than this time in 2017. That is why proactive review of compliance programs, contracts and thoughtful preparedness for possible criminal investigation is the most prudent strategy for industry participants.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions