State Watch

Marijuana-state govs ask feds to maintain status quo


Four governors of states where voters have legalized marijuana for recreational use are asking the Trump administration to leave in place an Obama-era agreement that gave exemptions to the legal pot industry.

In a letter to Attorney General Jeff Sessions and Treasury Secretary Steven Mnuchin, the governors asked the Justice Department to maintain a 2013 agreement, known as the Cole Memo, and guidance issued by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The Cole Memo, named for former Deputy Attorney General James Cole, laid out priorities for federal prosecutors in states where marijuana had been legalized for recreational use. The memo advises prosecutors to avoid strict enforcement of federal prohibitions on marijuana, in deference to state law.

{mosads}“Overhauling the Cole Memo is sure to produce unintended and harmful consequences,” the governors wrote. “Changes that hurt the regulated market would divert existing marijuana product into the black market and increase dangerous activity in both our states and our neighboring states.”

The letter was signed by Washington Gov. Jay Inslee (D), Colorado Gov. John Hickenlooper (D), Oregon Gov. Kate Brown (D) and Alaska Gov. Bill Walker (I).

{mosads}The FinCEN guidance lays out criteria under which financial institutions can provide services to marijuana-related businesses. Because federal law still considers marijuana a banned substance, many major banks are reluctant or refuse to do business with the marijuana industry. That has led some businesses to operate largely in cash, raising concerns about safety and crime, concerns the FinCEN guidance is meant to alleviate.

“[W]ithout the FinCEN guidance, financial institutions will be less willing to provide services to marijuana-related businesses. This would force industry participants to be even more cash reliant, posing safety risks both to the public and to state regulators conducting enforcement activity,” they wrote.

The Trump administration has offered mixed messages, and no clear guidance, on its plans for marijuana regulation. Sessions is a marijuana hard-liner who once joked he objected to the Ku Klux Klan because they smoked pot. But during the presidential race, Trump said he was inclined to leave marijuana regulation up to the states.

In interviews with The Hill, governors in states where marijuana is legal have voiced concern that their states may be subject to federal lawsuits or crackdowns by federal agents. Most governors of states where pot is legal, including Hickenlooper and Inslee, opposed the ballot measures when they come up, though they now say their voters have spoken.

Hickenlooper and Inslee both told The Hill they would seek meetings with federal officials to clarify the administration’s position on state-level marijuana legalization.

“I took an oath to support the constitution of Colorado,” Hickenlooper told The Hill last month. “I want to make sure that we have a discussion about it. I’ll come back, we’ll try to set a meeting up.”

Other state officials have said they would consider legal action to defend their laws in case of a federal crackdown. In an interview, Washington Attorney General Bob Ferguson (D) defended the Cole Memo.

“In an imperfect system, the Cole Memo has worked. States that have legalized marijuana I think have worked hard to adhere to the Cole Memo,” Ferguson said. “States like Washington have legal tools to resist [a federal crackdown], in the same way we have legal tools to resist the executive travel ban.”

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