If Feds Crack Down On Recreational Pot, State May Let Marijuana Stores Reclassify As Medical Dispensaries

With the shadow of a possible federal crackdown on retail marijuana looming, Colorado lawmakers are taking steps to try to protect the state’s pot businesses by letting them re-classify as medical weed purveyors if the need arises.

The state’s Senate passed a bill [PDF] that would allow licensing authorities to approve “single-instance transfers of retail marijuana or retail marijuana products from a retail marijuana licensee to a medical marijuana licensee based on a business need due to a change in local, state, or federal law or enforcement policy.”

While it’s unlikely that the state or local laws will change, U.S. Attorney General Jeff Sessions — an outspoken critic of the drug — recently said the Department of Justice would be reviewing its approach to marijuana enforcement to make sure it is in line with the Trump administrations views on crime.

“If there is a change in federal law, then I think all of our businesses want to stay in business somehow. They’ve made major investments,” Sen. Tim Neville, the bill’s sponsor, told the Associated Press in March.

What’s the difference between a medical pot dispensary and a marijuana retailer? In terms of federal law enforcement, quite a lot — at least right now. Federal law currently prohibits the Justice Department from using funds to prosecute medical marijuana cases in states where it’s legalized — so long as people follow state rules.

While this might shield legitimate and compliant dispensaries from prosecution, it’s not an ideal situation for the state’s bottom line. As the AP previously pointed out, some are skeptical that the switcheroo would do anything besides cost Colorado $100 million a year in tax revenue. That’s because the state taxes medical pot at only 2.9%, versus the 17.9% tax levied on recreational reefer.

Meanwhile, the governors of several states with legalized pot have asked Sessions to respect their states’ voters and not clamp down on marijuana. On Capitol Hill, a bipartisan group of lawmakers introduced legislation that aims to revise federal restrictions on the marijuana industry.