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What Does The Future Hold For The Legal Marijuana Industry?


March 10, 2017
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Sessions appointment puts legal marijuana industry on hold

The trend toward popular approval of medical marijuana and recreational legalization continues steadily forward. A total of 28 states, including New Jersey, have approved or implemented medical marijuana programs, and eight states and Washington, D.C. have approved sale and adult use of non-medical marijuana. In large part, industry expansion over the last several years has been made possible through lenient enforcement of the federal prohibition against growth, sale and use of marijuana. However, fears of a federal reversal by President Trump and Attorney General Jeff Sessions are causing concern within the legal marijuana industry.

The Future of the Legal Marijuana Industry Now Uncertain

Fears Stoked by Uncertain Federal Policy

During the presidential campaign, President Trump stated on several occasions that he believed the individual states should make decisions regarding marijuana legalization within their borders. Voters appeared aligned with this position, and marijuana provisions included on ballots in November passed almost without exception. However, President Trump appeared to contradict himself by nominating Mr. Sessions as Attorney General. Mr. Sessions has historically taken strident anti-marijuana positions and did not further clarify his position during or since his confirmation hearings, stating only that if Congress supported legalization of marijuana, it should pass a law to “change the rules.” The future of federal policy regarding the legal marijuana industry is, therefore, unclear. As a result, previously motivated investment and business participants have adopted a wait-and-see attitude regarding the legal marijuana industry. This hesitation will likely persist as long as the federal policy towards the industry remains unsettled.

Congressional Cannabis Caucus Formed

Uncertainty regarding federal policy has led to the formation of a Congressional Cannabis Caucus by a bipartisan group of federal lawmakers. The group hopes to validate the nation’s emerging cannabis industry and develop a harmonious understanding between the states and federal officials. Rep. Dana Rohrabacher (R-Calif.), a founding member of the caucus, expressed hope that Sessions would not balk against Trump’s state’s rights policy. Along with Rohrabacher, other caucus co-founders include Earl Blumenauer (D-Ore.), Jared Polis (D-Colo.), and Don Young (R-Alaska). Rohrabacher previously pioneered the critical Rohrabacher-Farr amendment, a spending provision that bars the Justice Department from prosecuting a state’s legal medical marijuana businesses. The provision, however, must be approved annually and is set to expire in April.

New Jersey Still Moving Forward

In New Jersey, state lawmakers favoring marijuana legalization are on alert but are proceeding with their efforts. Sen. Nicholas Scutari (D-Union) is planning to introduce a bill to legalize recreational use, and although he admits to concern about Session’s appointment, he has not paused his timeline. Sen. Scutari is relying on the Trump administration to follow Trump’s campaign position of autonomy for the states. Senate President Stephen Sweeney has previously stated that he intends to ensure legalization of adult recreational use of marijuana after the departure of Governor Christie in 2018, calling legalization a “game-changer” for New Jersey’s economy that could give rise to as much as $300 million a year in sales tax revenue.

Federal and New Jersey policies regarding marijuana legalization are in heavy flux. Individuals and businesses interested in the legal marijuana industry will need to remain well-informed about related developments going forward in order to accurately assess the potential risks and rewards associated with industry participation.

This article is a part of a series covering the potential for marijuana legalization in the United States, specifically New Jersey.  For more on this topic, check out:

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Dan McKillop, at 201-806-3364.

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.