Valley pot industry worried about federal crackdown, but confident state supports cannabis

The California cannabis market has moved from the street corner to the storefront in recent years and fully emerged into the legal market just this month. But now some in the industry are looking over their shoulders towards Washington, D.C., making sure they're adhering to all local and state regulations amid the threat of a federal crackdown.

Attorney General Jeff Sessions made waves in the pot industry earlier this month, announcing the rollback of an Obama-era directive not to enforce federal cannabis regulations in states where it had been legalized for medical or recreational use. He called it a “return to the rule of law,” but it was not immediately clear exactly what that would look like.

The announcement came just days after the full legalization of cannabis in California, a burgeoning, multi-billion dollar industry still putting down legal roots in the world’s sixth largest economy. The attorney general has long been opposed to marijuana, once saying “good people don’t smoke marijuana,” but the timing emphasizes the ongoing battle between California and the administration of President Donald Trump, which have repeatedly clashed on immigration policy and environmental regulations, among other issues.

Greta Carter, founder of cannabis consulting firm G.Car Companies and the driving force behind cultivation facilities and dispensaries in multiple states, acknowledged federal officials were fully capable of cracking down on the industry, seizing assets and jailing people.

“I think we would be naive not to be worried, we are in federal conflict,” she said. “I take the position, one of great respect for the federal government, but I also recognize that they are seriously behind the will of the people.”

Carter said investors have recoiled from the industry following the announcement, meaning money would be tight for many cannabis businesses for the foreseeable future, a potentially serious issue for an industry still getting its footing in the open market.

“I didn’t expect it. I was being optimistic that Trump would honor states' rights,” Carter said. She said she had hoped he would, “rope Sessions in. I’m hugely disappointed.”

In the valley, Cathedral City, Palm Springs, Desert Hot Springs and Palm Desert allow cultivation and dispensing. Coachella allows cultivation, but hasn’t OK’d retail sales. La Quinta and Rancho Mirage allow for delivery. This announcement leaves businesses in those cities, and the cities themselves, in limbo as federal officials decide how they want to proceed.

Related: These are the marijuana laws you should know for every city in the Coachella Valley

A statement from Adam Braverman, U.S. attorney for the southern district of California, said the decision returned local control to federal prosecutors, but didn’t provide much clarity on how federal cannabis regulations would be enforced in the state.

In a brief statement emailed to reporters on Jan. 4, he said the justice department was committed to “reducing violent crime and enforcing the law as enacted by Congress,” and pointed out possessing, buying, selling and growing cannabis remained federally illegal.

“The Southern District of California will evaluate violations of those laws in accordance with our district’s federal law enforcement priorities. We will continue to utilize long-established prosecutorial priorities to carry out our mission to combat violent crime, disrupt and dismantle transnational criminal organizations, and stem the rising tide of the drug crisis,” he said.

Carter said she felt confident the industry had the backing of municipalities in California, but expected the federal government to “flex its muscles.” She said she’s advising her clients to be completely sure they’re adhering to all state and local regulations.

Desert Hot Springs Mayor Scott Matas said the city attorney was examining Sessions’ memo and would let the city know of any potential risks, but the conflict between local and federal law had been at the forefront of the city council's discussions since it began debating about the medical cannabis industry about five years ago.

He said he was not surprised the current administration had decided to head in a different direction when it came to enforcing federal cannabis regulations, but at this point, Matas said it was saber rattling.

“Twenty nine states have some kind of medical, recreational or both in place, so it’s hard to say the feds are going to come in and start cracking down,” he said. “It would be a huge project for the federal government.”

Previously: Despite pot legalization, don't plan to spark up at Coachella

Palm Springs City Council member Geoff Kors, who has worked on the city’s cannabis subcommittee, said he assumed that given the legal challenges the state had posed to Trump administration policies thus far, they would do the same should the federal government crack down on the state cannabis market.

California Attorney General Xavier Becerra has vowed to protect the state’s interests, but hasn’t expanded on how his office might do that. The state filed 24 lawsuits against the federal government, often joining with other liberal jurisdictions, in 2017.

Kors said he wasn’t surprised by the policy change, but was disappointed, given the president had said multiple times he would respect states' rights. He said he hadn’t heard many concerns from operators in the city, but said the potential federal enforcement made it all the more important to ensure cannabis facilities were following all state and municipal regulations.

Brent Zimmer, who owns a tow yard in Coachella which he has been planning to convert and lease to cannabis cultivators, said he was monitoring the situation but it was unclear right now what the response would be. If there was a federal response, he said he felt confident the industry would have local and state support.

Zimmer has talked with others in the city who are doing the same with their land–some of whom have already started cultivating–and said they felt the same way he did.

“I’m worried, but not overly worried,” he said. “We’re watching it closely.”

Corinne Kennedy covers the west valley for The Desert Sun. She can be reached at Corinne.Kennedy@DesertSun.com or on Twitter @CorinneSKennedy.