Mike Sampson, a partner at global law firm Reed Smith LLP in Pittsburgh, notes that while businesses in the marijuana field should certainly be aware of the change in policy, Sessions did not order U.S. attorneys to disrupt the burgeoning industry. That could result in cases being handled differently from district to district.
Ultimately, he says, the issue will come down to how courts determine federal public policy regarding cannabis. If they determine Sessions’ memo and subsequent actions don’t constitute a true reversal, this could be nothing more than a symbolic act.
“The Cole memorandum has been something courts have relied on in determining federal public policy vis-a-vis marijuana,” he says. “[In one prominent case], the court said ‘there’s the Cole memorandum and the government is not pursuing violations, so we can’t say there’s a public policy against marijuana.’ Will they rely on the Sessions memorandum to say ‘we now have public policy against cannabis’ — or have events like state legalization overtaken us? … There’s a lot of wait and see here.”
Don’t, however, expect the Sessions memo to result in landlords and insurance companies changing existing relationships with cannabusinesses, says Sampson. Because those companies knew who they were partnering with (and what the business sold, grew or processed) when they signed the contracts, they likely won’t be allowed to hide behind the Controlled Substances Act to get out of the business relationships.
Justice Department budgeting, also, is something small-business owners will want to pay close attention to. Prosecuting cannabis-focused businesses will take money and, for now at least, there’s nothing earmarked for that. Should the department see a notable funding increase, that could be a red flag.
Despite the new threats, don’t expect to see marijuana business shut down pre-emptively to avoid legal prosecution, says Ballman. While a showdown might be looming at some point, that’s familiar territory for the industry.
“I believe the culture of the industry is that it has been mischaracterized for decades,” he says. “The people who run shops today are very much of a generation that fought to get [cannabis] medically licensed. They also fought to get it recreationally legalized. I see them as a generation of fighters. I’d be surprised if any stores close.”