Two lawyers with an international law firm warned of the potential risk increase to entities that support marijuana businesses in light of the Trump administration’s rescindment of a memo that encouraged federal prosecutors to not go after legal marijuana businesses.
Attorneys Michael Weiner and Joeseph Lynyak with Dorsey & Whitney spoke with The Daily Caller News Foundation about the effect rescinding the Cole Memo could have on marijuana businesses and what actions new investors might take in light of the Department of Justice’s decision on legal marijuana.
Lynyak pointed out that while marijuana businesses might not be directly affected by the scrapping of the Obama era protections, it presents more risks to banks and other sectors that provide services and support to legal marijuana enterprises.
“The Cole Memo has revoked that, leaving open the opportunity for someone who wants to be aggressive to do what they can do to prosecute someone because federal law is very clear: it’s a violation of federal law to be aiding and abetting the use, transportation and sale of marijuana,” Lynyak explained to TheDCNF.
Attorney General Jeff Sessions announced Thursday that the Department of Justice would be scrapping the Cole Memo enacted during the Obama administration. The 2013 memo recognized that while marijuana was illegal under federal law, prosecutors could adopt a hands off approach to states that allowed marijuana to be legal as long as they were not violating other federal statutes.
Already, eight states in the country (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington) have legalized marijuana. In some states, the legal marijuana business has flourished, like Colorado which raked in $700 million in 2014, according to The Washington Post.
Weiner noted that while he doesn’t believe that the rescindment of the memo will cause a “dramatic effect” on the legal marijuana business, he said that it does have the potential to slow down new investments and maybe dissuade new investors from entering into that sector. The memo also might slow down the overall weed business, but he believes that it will eventually pick back up, he told TheDCNF.
“It might slow things down for a bit because again you are rather than growing the base for potential investors, you are probably at least for a short period of time freezing that in place. But I think that they’ll continue to grow. The industry is still a brand new one that is still very attractive and generates revenue fairly quickly, so it is still very attractive for investors and for companies,” Weiner told TheDCNF.
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