Justice Department Reverses Policy on Cannabis Businesses
New Memo Clears Way for State-Regulated Medical Cannabis Distribution
On August 29, the U.S. Department of Justice issued new guidance to federal prosecutors, telling them medical cannabis dispensaries should no longer automatically be considered targets for prosecution. The memo from Deputy Attorney General James M. Cole to all U.S. Attorneys reverses previous policy, which had said anything involving more than an individual patient or caregiver was worth pursuing, regardless of whether those involved were compliant with state medical cannabis laws.
That previous policy had prompted several U.S. Attorneys to threaten elected state officials and state employees with criminal prosecution or civil asset forfeiture or both if they implemented regulations or licensing for distributing medical cannabis to patients as part of state law. As a result, several states suspended implementation of dispensary regulations, and Washington’s governor cited those threats when she vetoed a licensing system for dis pensaries in 2011. The new guidance from DOJ says the opposite: state and local officials can only avoid federal interference if they “'implement strong and effective regulatory and enforcement systems” that reflect what it lists as eight federal enforcement priorities.
“Respect for state cannabis laws and local enforcement is what this Administration has promised from the beginning, and we hope federal prosecutors take the new DOJ memo to heart,” said ASA Executive Director Steph Sherer. “But the President can do much more to stop the wasteful, unjust interference with medical cannabis laws, including supporting the bipartisan efforts in Congress.”
Part of the regulatory framework the DOJ says it wants to see is control over how money is handled, but for the last several years the DOJ has systematically blocked dispensary access to banking and credit card processing, and earlier in the month the Drug Enforcement Adminis-tration, a branch of the DOJ, told armored car companies they cannot service dispensaries and other medical cannabis businesses. When questioned about it by the media, a DOJ official who insisted on anonymity said Attorney General Eric Holder told the governors of medical cannabis states on a conference call last Thursday that the Justice Department is “actively considering” how to handle banking. The official told the Huffington Post that banks are unlikely to be prosecuted at this time for money laundering if they provide services to state-licensed businesses.
The memo does not change any law, nor does it preclude prosecution of any individual or business, as the U.S. Attorneys’ offices are autonomous, and federal prosecutors make independent decisions about which cases to pursue. A spokesperson for U.S. Attorney for the Northern District of California Melinda Haag, who has been relentless in trying to shut down two of the largest and most respected dispensaries in the country, said the memo would have no effect on their efforts. Both of the dispensaries have complied with state and local regulations and have the support of elected officials in their community. Threats of criminal prosecution and asset forfeiture by U.S. Attorneys have closed more than 600 dispensaries in California, Colorado and Washington over the past two years, even though no state law violations were alleged.
The latest memo is the first official federal response to initiatives approved last November by voters in Colorado and Washington that made cannabis possession and use legal for all adults. The memo states the DOJ will not attempt to challenge those laws directly at this time. The DOJ has never attempted to challenge any medical cannabis laws, though the government tried to overturn Oregon’s assisted suicide statute as a violation of the federal Controlled Substances Act, but that was rejected by the U.S. Supreme Court in 2009 when the court ruled in Gonzales v. Oregon that the CSA cannot preempt state laws unless there is a “positive conflict” in which state law required actions specifically prohibited by federal law.
Both Colorado and Washington have separate, long-standing medical cannabis programs. Currently 20 states and the District of Columbia allow medical cannabis use by qualifying patients, and many of those states have or are instituting regulated systems for distribution that limit the number of producers and providers, despite the threats from federal prosecutors.
Deputy AG Cole, who authored the latest guidance, also authored the 2011 memo that walked back the DOJ’s 2009 directive from that had said it would not be a wise use of resources to prosecute individuals in compliance with state medical cannabis laws. ASA estimates the federal government has expended over $500 million to block the implementation of state medical cannabis laws.
More information:
DOJ memorandum from Deputy Attorney General Cole
ASA Report on the cost of federal enforcement
ASA's Peace for Patients Campaign
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New Federal Policy on Sentencing, Compassionate Release
More medical cannabis prisoners may see freedom soon, if the Department of Justice makes good on a new strategy outlined by U.S. Attorney General Eric Holder last month. Speaking at the annual meeting of the American Bar Association, Holder said that the Department of Justice is 'considering compassionate release for inmates facing extraordinary or compelling circumstances' and decried the indiscriminate use of mandatory minimum sentencing for nonviolent offenders. 
Currently more than two-dozen federal medical cannabis patients and providers are serving sentences for violating federal marijuana laws, despite being in compliance with the laws of their respective states. Among these prisoners is Jerry Duval, recently sentenced to a mandatory minimum of ten years in federal prison for cultivating medical cannabis, even though he is a seriously ill kidney-pancreas transplant patient registered with the Michigan state program. Incarcerating him in a federal medical prison is expected to cost U.S. taxpayers more than $1.2 million.
'Imprisoning medical cannabis patients such as Jerry Duval is both extraordinarily expensive and shockingly unjust,' said ASA Executive Director Steph Sherer. 'We encourage Attorney General Holder to facilitate the compassionate release of all nonviolent federal medical cannabis prisoners.'
ASA estimates the costs associated with the federal government's interference with state medical cannabis programs at $500 million and rising.
More Information:
Text of the ABA speech by Attorney General Holder
Peace for Patients campaign
ASA's 'What’s the Cost?' report
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Delaware Moves Forward with Dispensaries
Delaware got the jump on the Department of Justice announcement on medical cannabis, when its governor announced the day before that he was endorsing a dispensary program despite threats from federal prosecutors.
The move came more than two years after Gov. Jack Markell suspended implementation of Delaware’s medical marijuana program over warnings from the Department of Justice that state officials could be subject to prosecution. The state currently has more than 20 registered patients but no approved means of distribution.
The state will begin the process next year of finding an operator for a single “compassion center” which would cultivate and distribute cannabis to registered patients, though the 2011 bill mandated a dispensary in each of the state’s three counties. Centers will be limited to 150 plants and no more than 1,500 ounces of medicine.
“The sensible and humane aim of state policy in Delaware remains to ensure that medical marijuana is accessible via a safe, well-regulated channel of distribution to patients with demonstrated medical need,” Markell said in announcing the plan.
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Massachusetts on Track for Dispensaries by 2014
Qualified patients in Massachusetts should be able to obtain their medicine in licensed dispensaries by the new year, if the Department of Public Health (DPH) stays on its implementation schedule. Last month marked the end of Phase I for applications to operate a Registered Marijuana Dispensary (RMD) in the state, and DPH has several applicants.
“The department continues to demonstrate a commitment to patient needs by moving forward quickly and thoughtfully with the process,” said Matthew J. Allen, Executive Director of the Massachusetts Patient Advocacy Alliance, “Today patients are one step closer to safely accessing their medicine.”
Under the Massachusetts program, RMDs must cultivate the medicine they provide to patients. In the first year of the program, DPH may approve up to 35 applications, with at least one dispensary in each of the state’s 14 counties, and a maximum of five locations per county. DPH can increase that number if it determines patient demand warrants more.
DPH has set a tentative date of Sept. 18 to announce which applicants are eligible for Phase II of the process. An information session on Phase II has been set for Sept. 20, from 10am-1pm at a location to be announced.
More Information:
DPH program webpage
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Illinois Implementation Conference a Success
Americans for Safe Access and Local 881 of the United Food and Commercial Workers (UFCW) union sponsored a conference in Chicago last month to review Illinois’ new medical cannabis law and plan for implementation.
The conference, which was free and open to the public, brought together patients, caregivers, cultivators, lab experts, and dispensary operators and workers to consider all aspects of HB1, the Illinois 'Compassionate Use of Medical Cannabis Pilot Program' Act, including the rights and responsibilities it establishes and what needs to be done to ensure the law will protect and benefit Illinois patients and be renewed. The HB1 takes effect January 1, 2014 and expires in four years.
HB1, which passed the Illinois House in April and the Senate in May, creates a framework to protect physicians and qualified medical cannabis patients from arrest and prosecution. HB1 specifies 33 debilitating medical conditions for which patients may obtain approval from a physician to use medical cannabis. Qualifying patients may possess up to 2.5 ounces which must be obtained from one of what are slated to be 60 'registered dispensing organizations.'
'Passing a law is just the first step in ensuring safe and legal access,' said ASA Executive Director Steph Sherer, who presented at the conference. 'Stakeholders have to come together to ensure the law is implemented with patients needs in mind.'
More Information:
HB1, the Compassionate Use of Medical Cannabis Pilot Program Act
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Sanjay Gupta Sorry for Misleading
Public about Medical Cannabis
 One of nation’s most well-known and respected physicians, the neurosurgeon Dr. Sanjay Gupta, apologized repeatedly last month for being part of “systematically misleading” the American public on the dangers and benefits of medical cannabis. The public apologies were part of both television interviews and an essay he published in advance of his CNN documentary on medical cannabis that featured reporting from around the world.
“I mistakenly believed the Drug Enforcement Agency listed marijuana as a schedule 1 substance because of sound scientific proof,” Dr. Gupta wrote. “They didn't have the science to support that claim, and I now know that when it comes to marijuana neither of those things are true. It doesn't have a high potential for abuse, and there are very legitimate medical applications. In fact, sometimes marijuana is the only thing that works.”
ASA, which is currently appealing to the US Supreme Court the DEA’s rejection of the latest rescheduling petition on cannabis, hosted an online event immediately following the airing of the documentary. Featuring many of the same guests as the documentary, as well as additional experts in the medical cannabis field, that follow-up discussion expanded on why Dr. Gupta now says it is “irresponsible” to deny patients access to medical cannabis. The ASA event is archived on the ASA YouTube page.
In 2009, Dr. Gupta was the leading candidate to become President Obama’s first Surgeon General until he withdrew from consideration.
More Information:
“Why I Changed My Mind on Weed” by Dr. Sanjay Gupta
ASA’s follow-up to Dr. Gupta’s documentary
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'Health Before Happy Hour' Campaign in Washington
Medical cannabis patients in Washington State are urging the legislature and Governor Jay Inslee to support legislation based on Senate Bill 5073, a 2011 measure on distribution that was partially vetoed by then-Governor Christine Gregoire.
The grassroots campaign, launched with help from ASA, addresses concerns about the effects of Washington's Initiative 502, which passed last November, on the state’s patients and their access under the original Medical Use of Cannabis Act.
'Washington was one of the first states in the nation to recognize that patients under a physician's care have the right to use medical cannabis,' said ASA Executive Director Steph Sherer. 'The needs of this vulnerable population are distinctly different from those of other users, and it's vital that elected officials understand the differences.'
As Washington's Liquor Control Board moves forward with plans to fully implement I-502 and open retail stores across the state, some officials have suggested that medical marijuana should be folded into the adult-use system. Mark Kleiman, a UCLA professor hired to help implement I-502, says competition from medical cannabis could cut expected revenues in half.
'Washington voted for medical cannabis to show compassion, not generate revenue,' said Kari Boiter, ASA's 2012 Medical Cannabis Advocate of the Year. 'Our state is essentially prioritizing profits over patients.'
Medical marijuana has been authorized under state law since 1998. Almost 15 years later, the state's policy remains unclear when it comes to dispensing medicine. Patients also lack the basic legal protections from arrest and prosecution.
In the CNN documentary 'Weed,' Dr. Sanjay Gupta outlined the need to cultivate CBD-rich strains and described why such varieties are unlikely to exist in a recreational marketplace.
More Information:
'Health Before Happy Hour' campaign website
Advocates' letter to Governor Inslee, kicking off campaign
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ACTION ALERT: Tell Congress the Time is Now!
The DOJ’s shift in policy on state medical cannabis programs is a step in the right direction, but it changes no law and protects no patients. Now is the time to ask Congress to resolve the conflict between prohibition and compassion for good. HR 689, the States’ Medical Marijuana Patient Protections Act, will move cannabis out of Schedule 1 of the Controlled Substances Act and allow for more medical research.
Please act today to urge your Representative to cosponsor HR 689 for real change!
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