(Still) An Uncertain Future for Marijuana Businesses

by Law Week

It’s been nearly three months since Attorney General Jeff Sessions revoked the Cole Memo, the Obama-era guidance that recognized marijuana’s federal illegality under the Controlled Substances Act but gave prosecutors the go-ahead to direct resources elsewhere. The move outraged Colorado Sen. Cory Gardner and elicited a more lukewarm response from U.S. Attorney Bob Troyer in Colorado, who said the directive’s revocation would not change how he allocates prosecutorial resources.

When Sessions first rescinded the Cole Memo, regulatory compliance experts speculated Colorado businesses already in the marijuana industry could likely continue operating as usual while taking extra care to operate within the boundaries of Amendment 64. By contrast, they said the uncertainty might have a chilling effect on new businesses jumping into the industry. And in the weeks since, sentiments from policy experts seem largely unchanged.

Denver voters approved an initiative to allow a pilot program for “social pot clubs” last summer. In February, the city approved an application for the city’s first pot club. But the slow start to applications for pot clubs may be more due to the strict limitations set forth by the city rather than enforcement uncertainty at the federal level. Businesses serving alcohol cannot apply, for example, which rules out bars and many restaurants. Pot shops can’t allow consumption on their premises. And clubs have to stay twice as far away as liquor stores from schools and other places children gather.

“Between the action of the Department of Revenue and the city, the scope has really been scaled back,” said Sam Kamin, professor of marijuana law and policy at the University of Denver Sturm College of Law. “It’s much less attractive to business owners than the authors of the initiative had hoped.”

To read this story and other complete articles featured in the April 2, 2017 print edition of Law Week Colorado, copies are available for purchase online.