James Cole, former deputy attorney general, testifies in 2013. Credit: Diego M. Radzinschi / ALM

The chief architect of Obama-era policies that largely shielded marijuana-legal states from heightened federal scrutiny said the decision by U.S. Attorney General Jeff Sessions to rescind that guidance will create uncertainty in an industry craving stability.

James Cole, now a partner at Sidley Austin in Washington, was the deputy attorney general in 2013 who wrote the guidance—known widely as the Cole memo—that told U.S. attorneys to focus on drug cartels and cross-border trafficking, not marijuana outlets complying with state regulatory schemes.

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Sessions revoked that document, calling it “unnecessary” and telling prosecutors to consider a broader, less specific range of “relevant considerations” when deciding whether to charge marijuana crimes.

Cole, in an interview with The Recorder on Thursday, said he thought his namesake memo outlined “a valid policy and was moving things in the right direction.” Twenty-nine states and the District of Columbia now allow medical or recreational use of marijuana or both. Many state regulatory schemes, including California's, focus on compliance with Cole memo tenets.

The Justice Department's rescission of the Cole memo purports to shift more prosecutorial discretion to U.S. attorneys, a move that could lead to starkly different marijuana policies among states and even within states that have multiple federal districts.

In districts where marijuana is legal—such as California's four districts—”there may be a certain level of sophistication and understanding of what their constituents want. That can influence prosecution priorities,” Cole said.

But any predictions are hazy given that President Trump has yet to nominate dozens of U.S. attorney candidates.

The office of McGregor Scott, the U.S. attorney for California's 34-county Eastern District, said in a statement Thursday that prosecutors will evaluate federal marijuana laws “in accordance with our district's federal law enforcement priorities and resources.” The statement continued: “We will continue our long-standing efforts to assess and address the unique threats and challenges facing our district together with our state, local and federal law enforcement partners.”

 

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What happens in the coming months,”depends on whether a prosecutor brings a marijuana case that's outside the former policy,” Cole said. “It will make people nervous.”

Sessions' actions Thursday generated an avalanche of criticism from leaders of marijuana-legal states. Colorado Republican Sen. Cory Gardner said in a tweet that the attorney general had “trampled on the will of the voters in CO and other states.” Gardner threatened to hold up Trump's Justice Department nominees if Sessions does not allow states to make their own determination on the legality of marijuana.

Lori Ajax, the head of California's Bureau of Cannabis Control, said the state is moving forward with its fledgling system of licensing recreational retailers, growers and distributors. California on Jan. 1 launched its recreational rules.

“We expect the federal government to respect the rights of states and the votes of millions of people across America and if they won't, Congress should act,” Ajax said in a statement.

California Attorney General Xavier Becerra.

California Attorney General Xavier Becerra, who has criticized Sessions's views on marijuana, said his office intends “to vigorously enforce our state's laws and protect our state's interests.” Becerra, like other Democratic attorneys general, has sued the Trump administration over numerous regulatory actions in the past year.

“In California, we decided it was best to regulate, not criminalize, cannabis,” Becerra said. “Unlike others, we embrace, not fear, change.”

Omar Figueroa, a Sonoma County cannabis attorney, said Sessions's actions will foster anxiety throughout the industry.

Investors will be more hesitant to put their money cannabis operations now, he said, and banks—already wary about marijuana—will be even less likely to serve cannabis-related businesses now. Obama-era U.S. Treasury Department guidance for banks that choose to handle marijuana-generated money referenced the Cole memo that Sessions rescinded.

“This disrupts the peace of mind of people in the industry,” Figueroa said. “It's like a rug has been pulled out from underneath them.”

Cole, a 17-year veteran of the Justice Department, said he believes it's time for political action. “This is, I think, an area that really screams out for Congress to bring some clarity,” he said.

 

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