Marijuana Now the Flashpoint in Federal-California Relations

When we first examined the potential flashpoints between the incoming Trump administration and California, marijuana ranked fairly low on the list, below climate policy, immigration and Obamacare.

That was in November. Since then, the divergence between state and federal policy on marijuana has come to look very real.

The White House and Atty. Gen. Jeff Sessions are talking tough about enforcing federal law, under which the cultivation, possession and distribution of pot are illegal — just at the point when California officials are pondering how to make good on the voters’ directive to legalize the drug.

Approval of Proposition 64 made California one of eight states, plus the District of Columbia, to have legalized recreational use. In some respects, California’s law, which takes effect next Jan. 1, is more liberal than the others; it allows the public consumption of the drug, albeit only on the premises of a retailer and if the local municipality approves.

Whether the Trump administration is serious about enforcing federal law is unclear; on the campaign trail, Trump often expressed the view that marijuana enforcement should be left to the states. But it’s that very murkiness that’s creating problems for states such as California wishing to subject their newly legalized pot industries to regulation. Under Sessions, who is renowned as a hawk on marijuana enforcement, it appears unlikely that the administration will take proactive steps to assist the legalization movement spreading nationwide.

In a news conference last week, Sessions failed to clear the air. “I don’t think America is going to be a better place when more people of all ages and particularly young people start smoking pot,” he said. "States ... can pass the laws they choose. I would just say it does remain a violation of federal law to distribute marijuana throughout any place in the United States, whether a state legalizes it or not."

Any deliberate federal effort to “strip the legal and publicly supported industry of its business,” Lt. Gov. Gavin Newsom, a supporter of Proposition 64, wrote to Trump on Feb. 24, would “hand it back to drug cartels and criminals.” But inaction and confusion within Congress and Trump’s inner circle create just as much of a problem.

“We’d like to know who’s making the decisions” about marijuana policy, Newsom told me. “Is it Congress? The president? The attorney general?”

Federal law also has made it almost impossible for states to wean the industry from its cash-only roots, another obstacle to effective regulation. Under the so-called Cole memo issued by the Obama administration in 2013, the Department of Justice professed a hands-off approach to marijuana enforcement in legalizing states, except for efforts to keep the drug away from minors and keeping criminal gangs and cartels out of the industry. A few months later, the Treasury Department issued guidelines stating, in effect, that it would be legal for banks to provide financial services to marijuana-related businesses.

But those informal assurances haven’t quelled the banking industry’s skittishness about opening accounts for cannabis companies and providing them with credit, California Treasurer John Chiang said in a letter to Trump prior to the inauguration. Proposition 64, Chiang wrote, “might exacerbate the banking problem even more” by immensely expanding the size of an industry accumulating a hoard of cash.

White House spokesman Sean Spicer addressed the issue at a Feb. 23 press briefing, but he delivered a jumble of ambiguities, misconceptions and misstatements that left doubt about whether the Trump administration has a policy and if so what it is, and whether it understands much about the legal and public health issues.

Spicer made a distinction between medical and recreational use of marijuana, implying that the legalizing states regulate the former rigorously and the latter sloppily. It’s hard to know where he got that impression, given that legalized medical marijuana flowed virtually unimpeded into the recreational market in many states (including California), and those that have legalized recreational use have strived to create a workable regulatory system to standardize drug quality and keep it out of the hands of children.

Spicer linked marijuana use to the opiate crisis: “When you see something like the opiate addiction crisis blossoming in so many states around this country, the last thing that we should be doing is encouraging people.” That made many addiction experts cringe, since there’s no evidence that marijuana use leads to opiate abuse, and emerging evidence indicates that opiate abuse is, if anything, lower in states that have legalized marijuana.

The press secretary left a muddled impression of what the Department of Justice actually will do. “There is still a federal law that we need to abide by,” Spicer said. He referred further questions to the DOJ, but said he believed “you’ll see greater enforcement” of the law against recreational use and that that’s something “the Department of Justice will be further looking into.”

There isn’t much question that the government could destroy the legal cannabis industry if it wished, says drug policy expert Mark A.R. Kleiman of New York University. U.S. attorneys could examine license applications from pot businesses in legalization states and obtain injunctions against the applicants in federal court, charging them with contempt if they flouted the injunctions.

But that would simply force the business back underground, re-creating the Prohibition-style headache that prevailed in the past. With 4,000 agents assigned nationwide to the Drug Enforcement Administration, Kleiman asks, “How much of that DEA capacity do you want to use on marijuana, when you have a huge opiates problem?”

Some experts are skeptical that administration talk about marijuana enforcement is anything more than “puffery and typical right-wing I’m-a-hard-line-drug-warrior rhetoric,” in the words of Hilary Bricken, a Seattle lawyer who represents marijuana entrepreneurs. Her opinion would change, she says, “if and when they repeal or replace the Cole memo.” As it happens, 11 senators from marijuana legalization states — including two Republicans — on Thursday called on Sessions to uphold the Cole memo explicitly.

States that have legalized recreational marijuana are sailing amid numerous uncharted shoals. Newsom says the drafters of Proposition 64 learned from the experience of Washington and Colorado, in part by standardizing the potency of edible products and keeping them from being marketed in ways that appeal to children. But he acknowledges that effective state regulation depends on “a spirit of collaboration and cooperation” with the federal government, especially on efforts to wipe out the black market in pot even after legalization takes hold.

The best option plainly would be for the federal government to accept the inevitability of wider state legalization and remove the uncertainties created by the mismatch of state and federal law. “If we had grown-ups in charge in Washington,” Kleiman says, “there would be a change in federal law,” perhaps to grant waiver from marijuana enforcement to states that submitted reasonable regulatory proposals. “It’s ridiculous to have a situation where California has legalized a federal felony.”