Marijuana business owners are accustomed to risk and uncertainty — but this is different. Now they’re grappling with the possibility of a crack down on their industry under the Trump administration.
“Yeah, that would be terrifying, yeah that could absolutely happen, and no, we don’t know what the push back would be,” says Wanda James, co-owner of the Simply Pure dispensary in Denver.
James expects push back from the industry in the form of lobbying or even lawsuits if necessary. She also expects the public to push back, pointing to a recent Quinnipiac poll showing 71 percent of respondents believe the federal government should keep its hands off states with legal medical or recreational cannabis.
— The Cannabist (@cannabist) March 23, 2017
While James is confident her business isn’t going away anytime soon, rumblings from Washington D.C. are scaring off potential investors.
“We have to talk people into just coming to the table, so yeah, you know, something like this, the president said he’s coming at you, yeah a lot of people are going to lose their will to do this,” she says.
It’s an incredible turn of events. In the wake of the election, Colorado businesses were salivating over the expansion of recreational pot into new markets, especially in California, home to nearly 40 million people.
“We thought it was a tipping point, but now it looks like an instability point, because of Trump’s election,” says cannabis attorney and activist Sean McAllister.
No one’s sure what the Trump administration’s plans are McAllister says. Even Colorado’s Attorney General is hearing contradictory messages. The president’s press secretary, Sean Spicer, has hinted there would be a crackdown on recreational marijuana. And Trump’s Attorney General, Jeff Sessions, has consistently said pot is more dangerous than people realize, adding they’re “evaluating how we want to handle that.”
McAllister says this is already causing damage, citing an $8 million deal that just fell through here in Colorado. He declined to offer details, but calls it “a huge deal that would have built a new company and employed new people, but this federal uncertainty has absolutely put a damper on investment.”
Still, McAllister is skeptical the government can, or even wants to, stop Colorado’s pot industry, which eclipsed $1 billion dollars in sales in 2016 and employs more than 30,000 people (based on occupational licenses).
“I’ve built my entire career on cannabis, and maybe I’m overly optimistic, but I don’t believe we’re turning back.”
That hasn’t stopped several edibles manufacturers he represents from drafting contingency plans to switch entirely back to medical marijuana. Another attorney specializing in cannabis, Boulder’s Jeff Gard, says that becoming more common.
“Because of the offhand comment made by Mr. Spicer about understanding the need for medical marijuana, maybe being a bifurcated policy where Trump goes after recreational but not medical,” Gard says.
During the campaign, Trump said he was “100 percent” in favor of medical marijuana. State lawmakers are working on a bill that would make transitioning from recreational sales to medical sales easier.
Medical marijuana, though, is a far more limited market, less than a third of monthly recreational sales. Gard also isn’t convinced the medical side of the industry is the safehaven people think it is. In fact, Sessions recently questioned the use of marijuana as medicine. This is leading to tough conversations in the industry.
“What we’re talking about in the cannabis industry is the risk and threat of federal prison,” Gard says. “This is not a normal and ordinary business risk that people are facing.”
The federal government has options, he says. It could sue the State of Colorado — something the state’s Attorney General has called attention to — or it could just send threatening letters to pot businesses and their landlords. That was effective five years ago, when the U.S. Attorney in Colorado shut down dozens of pot businesses that were located too close to schools, without having to kick down a single door.
Sam Kamin, a constitutional law professor at the University of Denver, says no matter what happens, pot shop owners should keep their heads down.
“So that when, if you're the U.S. Attorney for Colorado and Jeff Sessions says, ‘Yep, pick me some. Pick me five or six people to go after,’ you do not want to be the one that get’s picked.”
If this all seems unfair, potentially targeting state and locally licensed businesses, Kamin says there’s no way around the fact that Colorado’s system is plainly against federal law, “and people are realizing what we’ve mostly known all along, which is, everything that exists right now exists because the federal government allows it to exist.”
The current allowance isn’t even a law, it comes in the form of a memo from former President Barack Obama’s Justice Department. Sessions seems to have said he won’t radically depart from that policy, but the bottom line is: nothing is certain for the marijuana industry right now.