Welcome back to Higher Law, our weekly briefing on all things cannabis. I’m Cheryl Miller, reporting for Law.com from Sacramento. Current political events may have you reaching for a beer or a little (legal) marijuana these days. Just don’t reach for marijuana-infused beer if you’re here in California, or maybe Michigan. More on that below.
This week we review the jaw-dropping comments Colorado’s top federal prosecutor made about state-licensed cannabis businesses. Plus, a federal committee reviewing marijuana policies assures a U.S. Senator it’s not on a pot-bashing mission. And scroll down to see Who Got the Work.
Thanks as always for reading, for your story ideas and for your feedback. Keep it coming. You can reach me via email at email@example.com or you can call me at 916-448-2935. Follow me on Twitter at @capitalaccounts.
Colorado’s US Attorney Blasts ‘Unfettered’ Marijuana Market
That was my first reaction last Friday after reading a Denver Post op-ed written by Colorado’s top federal prosecutor, Bob Troyer. In the nearly 800-word piece, Troyer decried what he says has been Colorado’s “breathless sprint into full-scale marijuana commercialization” since voters legalized cannabis in 2012.
Troyer cited a litany of Colorado troubles he links to legalization: a high marijuana-use rate among youths; an increase in pot-related traffic deaths; a “booming black market”‘ environmental woes; and more alcohol consumption.
And then he took things a step further.
“These impacts are why you may start seeing U.S. attorneys shift toward criminally charging licensed marijuana businesses and their investors,” Troyer wrote. “After all, a U.S. attorney is responsible for public safety.”
Even after the Cole memo was rescinded this year, most U.S. attorneys have said their enforcement priorities will remain focussed on illegal activities: black-market operations, sales to minors and interstate trafficking. Going after licensed marijuana businesses in good standing with state laws would be a 180-degree change in prosecutorial policies.
Brian Vicente, a founding partner in the Colorado firm of Vicente Sederberg, called Troyer’s op-ed “alarming.”
“His view is quite different from the majority of Coloradans who continue to firmly believe that a regulated market is preferable to the black market,” Vicente said.
Troyer did add that federal “crosshairs” may shift “particularly” to licensed businesses that “are not complying with state law or trying to use purported state compliance as a shield.”
Rachel Gillette, chair of Greenspoon Marder‘s cannabis practice, said she isn’t sure what prompted Troyer’s remarks or what to make of them. Any federal crackdown on legal operators that have produced an estimated 25,000 jobs and millions of dollars in tax revenues isn’t likely to go over well with state leaders, she said.
“I can’t guarantee anybody that everything’s going to be OK when we still have federal illegality,” Gillette said. “But it’s a good reminder that it’s not just a matter of being in substantial compliance with state laws. It’s a matter of being in strict compliance.”
Is Troyer putting a warning shot across the bow, or is he offering a heads up that enforcement actions are afoot? He hasn’t said and no one seems sure. Gillette said clients have asked her if she’s seen the prosecutor’s op-ed, but they’re not “freaking out” about it.
“The reality is, these businesses have had the heavy weight of the federal government on their shoulders since the moment they opened,” she said. “This is nothing new.”
President Trump nominated Jason Dunn, an equity shareholder in the Denver office of Brownstein Hyatt Farber Schreck to be the Colorado U.S. attorney. Dunn leads the firm’s state attorneys general practice. We took a peek in July at Dunn’s financial disclosure.
Who Got the Work
• Denver-based General Cannabis Corp. has hired its first general counsel, Brett Wendt. Wendt will also serve as the cannabis services company’s executive vice president. My colleague Dan Clark at Corporate Counsel writes that Wendt comes from the Denver office of Kutak Rock and previously served as the senior vice president and general counsel for underground utility company UtiliQuest. General Cannabis provides consulting, security, branding and packaging help and other services to the marijuana industry.
• Barry Grissom, a former U.S. attorney for Kansas, serving from 2010 to 2016, has been named senior vice president of global policy / corporate counsel for Electrum Partners, the advisory services firm specializing in medical and recreational cannabis. Grissom, writing in an op-ed last year, supported Kansas medical marijuana legislation.
• Pyxus International Inc., the North Carolina company making a push into regulated marijuana, has retained Monument Strategies to lobby Congress on “leaf tobacco, E-Liquids, industrial hemp and legal cannabis industries,” according to a recent filing. Until this year, Pyxus was known as Alliance One International, a brand best known for tobacco growing and packaging. On Tuesday, Pyxus announced that its indirect Canadian subsidiary, Goldleaf Pharm Inc., has received a medical marijuana cultivation license from Health Canada.
• David O’Brien is the new president and CEO of the Massachusetts Cannabis Business Association. O’Brien was previously the East Coast government relations director for Weedmaps and before that ran two political committees for Massachusetts Gov. Deval Patrick. The hire was first reported by the Boston Globe.
In the Weeds
>> Dan Roda, chief legal officer with MediPays, says his company is working with the fledgling medical marijuana industry in Oklahoma to provide banking services. Roda told the Tulsa World that his company was attracted to Oklahoma because of the large number of people interested in getting into the industry — and the limited banking opportunities. Since applications became available in August, more than 7,100 people have applied for medical marijuana licenses, and the state has approved permits for nearly 470 dispensaries. [Tulsa World]
>> The multi-agency federal committee reviewing marijuana policy will be objective and dispassionate. That’s what Colorado Sen. Michael Bennet said he was told by the president’s Office of National Drug Control Policy. Lots of questions about the committee’s intentions were raised in August when Buzzfeed obtained documents it said showed the panel asking agencies for marijuana “data demonstrating the most significant negative trends.” Bennet said he was told the committee would rely on scientific data to do its work. [AP]
>> A new California law will make it easier for people with marijuana convictions to have their charges dismissed and sealed or their sentences reduced. More than 200,000 residents could benefit from the law, which follows California’s legalization of recreational marijuana this year. [USA Today]
>> Recreational marijuana isn’t even legal in Michigan—yet—but the state is poised to ban pot-infused booze. Lawmakers sent Gov. Rick Snyder a bill to bar the use, possession or sale of any beer, wine, liquor or mixed drinks that contain marijuana. Advocates say the bill is a preemptive measure in case Michigan voters approve recreational marijuana next month. California Gov. Jerry Brown signed similar legislation into law last week. [AP]
You Said It
—Rep. Eric Swalwell, D-Calif., questioning on Twitter why California researchers had to import marijuana capsules from Canada. Swalwell wrote that he and Rep. Matt Gaetz, R-Fla., have asked U.S. Attorney General Jeff Sessions for answers.
Mark Your Calendars
Oct. 11-13 - The New West Summit will be held in Oakland, Calif. Scheduled speakers include Hoban Law Group senior attorney Patrick Goggin; Eduardo Provencio, general counsel at Mary’s Medicinals; and Cassia Furman, managing attorney of Vicente Sederberg‘s California practice group.
Oct. 11 - Harris Bricken attorney Megan Vaniman will present “Employment Law for Oregon Cannabis Businesses” at the firm’s Portland office. Topics include Portland’s and Oregon’s “ ban-the-box” laws and the importance of employee handbooks.
Oct. 17 - Grab your toques and take a toke. Recreational marijuana is scheduled to go legal in Canada.
Thanks for reading! Higher Law will be on hiatus next week. See you back here on Oct. 18.