Federal officials are poised to unveil new regulations allowing for financial institutions to legally interact with licensed businesses that are engaged in cannabis commerce.
United States Attorney General Eric Holder announced the forthcoming guidelines yesterday in a speech at the University of Virginia’s Miller Center.
“You don’t want just huge amounts of cash in these place. They (retail facilities that dispense cannabis) want to be able to use the banking system,” Holder said. “And so we (the Obama administration) will be issuing some regulations I think very soon to deal with that issue.”
Presently, federal law discourages financial institutions from accepting deposits or providing banking services for facilities that engage in cannabis-related commerce because the plant remains illegal under the US Controlled Substances Act. While the Obama administration is unlikely to amend cannabis’ illegal status under federal law, the forthcoming rules are anticipated to provide clear guidelines for banks that wish to provide support for state-licensed cannabis facilities.
In Colorado, where retail stores began legally selling cannabis on January 1 to anyone age 21 and older, businesses were estimated to have engaged in over $5 million in marijuana sales in their first week of business.
In an interview earlier this week with National Public Radio, US Attorney General Eric Holder publicly acknowledged the obvious:
-There are too many citizens in prison on low level drug charges
-The mandatory minimum sentencing guidelines employed by the federal government should be reformed
-The inherent outcome of the federal criminal justice system affirms serious racial disparities exist
Holder: “The war on drugs is now 30, 40 years old. There have been a lot of unintended consequences. There’s been a decimation of certain communities, in particular communities of color.”
“[W]e can certainly change our enforcement priorities, and so we have some control in that way,” Holder said. “How we deploy our agents, what we tell our prosecutors to charge, but I think this would be best done if the executive branch and the legislative branch work together to look at this whole issue and come up with changes that are acceptable to both.”
Listen to interview here.
The Drug Policy Alliance has multiple suggestions on how President Obama and Attorney General Holder ‘can go big’ in their last three years in office to substantively reform the failed war on some drugs.
It has been nearly seven weeks since voters in Colorado and Washington made history, enacting at the ballot box unprecedented measures legalizing the adult possession on cannabis. Yet during this time, federal officials have largely remained silent.
One week ago, US Attorney General Eric Holder cryptically told Bloomberg News that the administration will formally announce its intentions “relatively soon,” but added no further details. Most recently, on Friday, President Obama told ABC News’ Barbara Walters: “It would not make sense for us to see a top priority as going after recreational users in states that have determined that it’s legal. … We’ve got bigger fish to fry.” Of course, federal officials do not target minor marijuana offenders now — so the President’s statement provides little clarity as to what actions the Administration may take going forward as Colorado and Washington begin implementing broader regulatory reforms, including measures to license proprietors to commercially produce and sell cannabis to adults.
Today, in Alternet.org, I speculate as to what actions the Administration may take — and what actions they may not take — in the coming weeks as state lawmakers work toward the full implementation of Colorado and Washington’s newly enacted marijuana laws. An excerpt from this commentary appears below.
Will Obama Go After Legal Pot in Washington and Colorado?
With public opinion firmly behind the will of the voters, is it realistic to think that the Obama Justice Department will take action to try and nullify Colorado and Washington’s legalization laws? It’s possible, but it may not be as likely as some think.
For starters, states are not mandated under the US Controlled Substances Act to criminalize marijuana or to arrest and prosecute adult cannabis consumers and the federal government cannot compel prosecutors in Colorado or Washington to do so. The Justice Department and the US Drug Enforcement Administration could, theoretically, choose to selectively prosecute those individuals in Colorado and Washington who possess or grow quantities of plant that are compliant with state law. But such a scenario is hardly plausible. The federal government lacks the manpower and the public support – and therefore the political will – to engage in such behavior and this reality is unlikely to change any time soon. As acknowledged by former congressman and ex-DEA director Asa Hutchinson at a recent CATO Institute forum on the subject, the federal government never has prosecuted people for possessing an ounce of marijuana and it is not about to start doing so now.
By contrast, the Obama administration may attempt to actively prohibit states from allowing for the above-ground, licensed production and sale of cannabis by authorized proprietors. Justice Department officials could theoretically do so by either bringing a legal challenge against the states, by threatening local officials, or by proposing to withhold federal funding. But none of these actions are assured. Here’s why.
To date, the Obama administration has done little to interfere with the state-approved production and licensed distribution of medical marijuana in those states that explicitly license and regulate this activity — specifically in Arizona, Colorado, Maine, New Jersey, and New Mexico. (In recent days, some of the first state-approved dispensaries opened for business in Arizona and New Jersey. In coming months, licensed dispensaries are also anticipated to open their doors to the public in Vermont as well as the District of Columbia. **AUTHOR’S NOTE: By contrast, the Justice Department has taken actions to aggressively close operations in California, Oregon, Montana, and Washington — though none of these states explicitly license dispensaries.**) In Colorado – where the state has licensed several hundreds of cannabis dispensaries and oversees “seed to sale” regulations governing the plant’s production and distribution – federal officials have yet to either file suit or threaten any of the state regulators who oversee the program. In response to a lawsuit filed in 2011 by Arizona Gov. Jan Brewer, who sought to invalidate the state’s 2010 medical cannabis law, lawyers for the federal government affirmed that the administration had never engaged in such strong-arm tactics and did not intend to.
The federal judge in the case agreed. She rejected Gov. Brewer’s legal arguments that the operation of state-approved medical marijuana dispensaries was preempted by federal law or put state employees at risk for federal prosecution, determining “[T]he Complaint does not detail any history of prosecution of state employees for participation in state medical marijuana licensing schemes [and] fails to establish that Plaintiffs are subject to a genuine threat of imminent prosecution and consequently, the Complaint does not meet the constitutional requirements for ripeness.”
A Maricopa County (AZ) Superior Court ruling from earlier this month further affirms that states possess the legal authority to regulate the legal distribution of cannabis, at least in some specific instances, without running afoul of federal anti-drug laws. In the case before the Court, White Mountain Health Center, Inc. v. Maricopa County, Judge Michael Gordon determined that the federal Controlled Substances Act did not preempt Arizona’s efforts to authorize “the local cultivation, sale, and use, of medical marijuana.” Writing for the Court, Judge Gordon declared that nothing in Arizona’s law circumvents federal law since Justice Department officials could still continue to locally enforce the Controlled Substances Act. In fact, Judge Gordon suggested that the new law “affirmatively provides a roadmap for federal enforcement of the CSA, if they so wished to” since the statute requires patients and proprietors to register their activities with the state. He concluded: “The Court rejects … arguments that the [law] violates public policy simply because marijuana use and possession violate federal law. Eighteen states and the District of Columbia have passed legislation permitting the use of marijuana in whole or in part. The Court will not rule that Arizona, having sided with the ever-growing minority of States, and having limited it to medical use, has violated public policy.”
Some legal experts, including law professor Robert Mikos of Vanderbilt University Law School, suggest an additional legal theory as to why Colorado and Washington’s proposed regulatory schemes may not be subject to federal preemption. Speaking at a recent CATO Institute sponsored forum, Mikos suggested that the newly enacted state legalization laws do not violate the spirit or the intent of the Controlled Substances Act because the federal law exists for the expressed purpose of limiting the consumption of certain substances by the public, particularly young people. One can argue that the proposed statewide regulatory schemes in Colorado and Washington – which impose age restrictions for buyers and limit sellers to those authorized by the state – are intended to serve a similar purpose. Further, the proposed state programs, “do not stop federal authorities from sanctioning registrants.” Notably, Superior Court Judge Gordon specifically highlighted these arguments in his decision to uphold Arizona’s law and to reject claims that it positively conflicted with federal law.
“No one can argue that the federal government’s ability to enforce the CSA is impaired to the slightest degree [by Arizona’s medical marijuana law],” he opined. “Instead of frustrating the CSA’s purpose, it is sensible to argue that the [law] furthers the CSA’s objectives in combating drug abuse and the illegitimate trafficking of controlled substances.”
You can read the full text of my commentary here.
The most widely read political website, Politico.com, covers the now clear controversy the Obama Administration has found itself in regarding its semi-articulated medical cannabis policy position post hundreds of law enforcement closures of medical cannabis dispensaries since the fall of 2011.
Beyond bringing this political quandary regarding medical cannabis to a well informed readership, what is notable about the reportage is that buried in the piece is an apparent recent confrontation between cannabis law reform proponent Rep. Barney Frank (D-MA) and President Obama at a swank fundraiser directly across the street from NORML’s offices at the St. Regis Hotel where Frank confronted the President about the disparity between his rhetoric in favor of medical cannabis and the recent law enforcement actions of his Justice Department.
Frustratingly, the President claims that he does not know what is going on in states like California, Washington, Montana and Colorado regarding DOJ’s efforts to seriously retard patient access to medical cannabis.
Obama sees his history on medical marijuana enforcement differently. The president was again asked about the Justice Department medical marijuana policy at a high-dollar fundraiser at Washington’s St. Regis Hotel filled with liberal mega-donors who paid $35,800 a plate to attend. According to a source with knowledge of the event, which was closed to reporters, Obama reportedly said that the DOJ was raiding purely on a case-by-case basis.
Frank says he got a frustrating response when he buttonholed Obama to complain that this wasn’t true: Obama told the Massachusetts Democrat that, to the best of his knowledge, the 2009 hands-off policy remained in place.
Frank told POLITICO that he’s preparing to send the president press clippings to demonstrate that raids continue across the country.
The tide has turned on the issue — beyond medical marijuana, there’s growing support for full legalization — Frank said, and there’s no reason the president should be lagging behind.
“Obama now lags Pat Robertson in a sensible approach to marijuana,” said Frank, referring to the conservative evangelical leader’s recent criticism of the drug war.
Obama’s pot promise a pipe dream?
By: Byron Tau
April 21, 2012
President Barack Obama has turned out to be a real buzzkill.
Back when he was running in 2008, Obama said he supported the “basic concept of using medical marijuana for the same purposes and with the same controls as other drugs” and that he was “not going to be using Justice Department resources to try to circumvent state laws.” He didn’t go farther. But he also didn’t do anything to dissuade speculation among medical marijuana proponents who took this as a sign that the man headed to the Oval Office was on their side.
Four years later, the raids on drug dispensaries have kept up — despite a Justice Department memo formalizing low-enforcement priority instructions from Attorney General Eric Holder, who announced in a March 2009 press conference that the raids would stop on distributors who were in compliance with state and local law. Obama never said anything about supporting legalization or decriminalization, but his medical marijuana statements were enough to get him heralded by some in the larger pro-pot community as the best hope for chipping away at the decades-long drug war.
But the hopes that Obama would be a kinder, gentler, more tolerant drug warrior have gone up in smoke.
“I’m very disappointed,” Rep. Barney Frank (D-Mass.), a longtime supporter of marijuana legalization and medical marijuana, told POLITICO. “They look more like the Bush administration than the Clinton administration.”
The dejected medical marijuana supporters are hardly alone. For many in 2008, candidate Obama was like a political Rorschach test: They projected strong progressive positions about everything from legalizing gay marriage to ending all military involvement onto a candidate who never said he agreed with them — but also never explicitly said he didn’t.
Now they’re looking at four years into the Obama administration and wondering where they went wrong.
Read the rest at Politico
A federal judge in Sacramento this week dismissed a federal lawsuit filed in November by members of the NORML Legal Committee against the US Department of Justice, US Attorney General Eric Holder, and DEA Director Michele Leonhart. The lawsuit (read it here), one of four filed simultaneously in the state’s four federal districts, argues that the Justice Department’s ongoing crackdown against medical marijuana providers and distributors in California is in violation of the Ninth, Tenth, and Fourteenth Amendments to the US Constitution because the use of cannabis therapeutically is a fundamental right. Petitioners also argue, using the theory of judicial estoppel, that the Justice Department had previously affirmed in public memos and in statements made in federal court that it would no longer use federal resources to prosecute cannabis patients or providers who are compliant with state law.
On Wednesday, US District Judge Garland Burrell, Jr., rejected those arguments and and granted the respondent’s dismissal motion. He denied petitioners request for public hearings prior to making his ruling.
Judge Burrell rejected plaintiffs’ Ninth and Tenth Amendment challenges, finding: “Since the Supreme Court has held the that CSA’s (federal Controlled Substances Act) categorical prohibition of the possession, manufacturing, and distribution of marijuana does not exceed Congress’ authority under the Commerce Clause (Article I Section 8, Clause 3 of the US Constitution), plaintiffs do not have a viable …. claim.”
He also rejected plaintiffs’ equal protection arguments, finding that the Justice Department’s actions in California mimic efforts the federal government has taken against “similarly situated individuals” elsewhere. Judge Burrell also cited court rulings finding that defendants in previous challenges have failed to meet the “heavy burden of proving the irrationality of the schedule I classification of marijuana.”
Finally, Judge Burrell dismissed plaintiff’s judicial estoppel clam, which argues that defendants’ “recent crackdown … against medical cannabis patients flouts the representations made on the record by the Department of Justice” in public memos and statements in court. Responding to this challenge, Judge Burrell determined, “Since judicial estoppel does not apply unless ‘a party’s later position [is] ‘clearly inconsistent with its earlier position,’ and the Ogden memo does not contain a promise not to enforce the CSA, defendants’ enforcement of the CSA is not inconsistent.”
Commenting on the ruling, Attorney David Michael of San Francisco, who along with Matt Kumin and Alan Silber were the lead attorneys in these four challenges, said “We are disappointed, but not discouraged, that the District Courts have thus far denied us the relief we had sought. They are constrained by existing precedent, and the result was not unexpected. It is the Ninth Circuit where we hope to find a receptive audience, and, with the Lawrence v. Texas decision, we may also have a more receptive audience in the Supreme Court, should the issue go there.”
Judges for the Ninth Circuit had previously determined in Raich v Gonzalez: “For now, federal law is blind to the wisdom of a future day when the right to use medical marijuana to alleviate excruciating pain may be deemed fundamental. Although that day has not yet dawned, … (it) may be upon us sooner than expected.”