Federal decision on marijuana enforcement has Michigan's fledgling business seeking answers

The U.S. Department of Justice is throwing a wrench into the fledgling marijuana business across the country, just as Michigan is on the cusp of regulating and taxing the medical marijuana industry.

The Justice Department is set to roll back a policy implemented during the administration of former President Barack Obama to not challenge state laws that allow people to use pot for medical and recreational uses. Attorney General Jeff Sessions, an outspoken critic of legalized marijuana, wants to step up enforcement on what the federal government categorizes as an illegal drug.

The decision comes just days after California implemented its law to legalize marijuana for recreational use, the eighth state to legalize cannabis for adults. Twenty-nine states, including Michigan, have legalized marijuana for medical use.

"It is the mission of the Department of Justice to enforce the laws of the United States, and the previous issuance of guidance undermines the rule of law and the ability of our local, state, tribal, and federal law enforcement partners to carry out this mission," Sessions said in a statement. "Therefore, today's memo on federal marijuana enforcement simply directs all U.S. attorneys to use previously established prosecutorial principles that provide them all the necessary tools to disrupt criminal organizations, tackle the growing drug crisis, and thwart violent crime across our country."

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The move has medical marijuana advocates and potential business owners in Michigan scrambling for clarification on what this will mean for the state’s new medical marijuana laws. The state began accepting applications last month for five categories of medical marijuana licenses — growers, processors, testing facilities, transporters and dispensaries — and is expected to begin granting licenses later this spring.

The department will continue with that process despite the federal decision, said David Harns, spokesman for the state Department of Licensing and Regulation.

“The Michigan Legislature has authorized the licensing of medical marijuana facilities and has required a rigorous statewide monitoring system to help keep Michigan’s citizens safe,” he said in a statement. “LARA is tasked with implementing the Michigan Medical Marijuana Facilities Licensing Act and will continue to move forward in accepting and processing applications for state operating licenses.”

The department requires that every person applying for an application, which carries a $6,000 nonrefundable fee, sign a letter that says they understand the risk of starting a business that conflicts with federal law.

Session's announcement would give authority to local U.S. attorneys to determine how they’ll enforce marijuana laws in each state. The U.S. Attorney's Office in Grand Rapids referred calls to the Department of Justice in Washington D.C., which didn’t immediately provide clarification on Thursday’s decision. Matthew Schneider, interim U.S. Attorney for the Eastern District in Detroit, was getting sworn into his new post on Thursday afternoon and hadn't examined the new directive from Washington.

Michiganders who have been hoping to get into the cannabis business said they’re ready for the fight.

“The industry has been bracing for this ever since Donald Trump was elected and Sessions was appointed attorney general,” said Barton Morris, a Royal Oak attorney who specializes in cannabis laws. “This is a huge fight that he brought on today. Our state medical marijuana law is based on the reliance that the Department of Justice is not going to interfere in states that have passed laws. We relied upon that. If they want to interfere with that reliance, to our detriment, there is a legal basis to challenge it.”

Jerry Millen, who is renovating a building in Walled Lake with hopes of opening a medical marijuana dispensary, said he’s not panicking, yet.

“Trump’s approval rating is so low that I don’t think he’s stupid enough to mess with patients,” he said. “What’s going to happen when they start rolling out children and senior citizens who have been helped by marijuana.”

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The Committee to Regulate Marijuana like Alcohol has submitted signatures to the secretary of state to get marijuana legalization for adult recreational use on the November 2018 ballot.

Josh Hovey, a spokesman for the group, said they’re still trying to get answers, too. He cited an amendment that has been tacked on to federal budget bills since 2014 that prohibits the Department of Justice from using resources to enforce marijuana laws in states that have approved the use of medical marijuana. That amendment has to be approved with every budget bill, including the next one that comes up on Jan. 19.

“Ultimately, what this means is that the 2018 election is even more important,” Hovey said. “It’s up to Michigan voters to send a message to Washington to end prohibition here.”

One group that was happy with the decision coming out of Washington was Smart Approaches to Marijuana, which advocates for the decriminalization of marijuana, but opposes outright legalization.

“We hope today is the beginning of the end of this new tobacco industry,” said Kevin Sabet, president of the group. “We don’t want them to go after low-level users, but we think this will scare off the investors who got into this business for the money.”

But Chris Walsh, editorial vice president at the Marijuana Business Daily trade publication, said it will be hard to turn the clock back on an industry that already generates $6 billion in sales and employs hundreds of thousands of workers. In Michigan, the industry is expected to reach $771 million in sales and send $21 million in tax revenues to the state.

"This industry ... filters hundreds of millions of dollars annually into state coffers and has the support of the majority of the U.S. population," he said. "It will fight back.”



Contact Kathleen Gray: 313-223-4430, kgray99@freepress.com or on Twitter @michpoligal.