Attorney General Jeff Sessions got rid of some Obama era guidance for legal marijuana states earlier this month, reiterating Congress’s determination that marijuana activity is a serious crime and a dangerous drug. Instead of marijuana specific guidance, prosecutors are instructed to use the general principles designed for all federal prosecutions. Among these are the severity of the federal crime, its impact on a community, and how likely prosecution will deter others from committing the crime.
The memo issued by Sessions Jan. 4 removed direction that gave states like Colorado room to regulate their industries. With these in place, the marijuana industry was free to develop without fear of federal law enforcement. The Department of Justice would instead focus on other priorities, like drug cartels and marijuana production on public lands. That let business owners and consumers breathe a sigh of relief after a period of uncertainty about how the feds would react to Colorado legalization. With that guidance voided, where does that leave us?
According to Garfield County Sheriff Lou Vallario, people are “getting spun up about nothing,” saying we won’t see much impact here — “maybe on some grows,” he said. While he didn’t disagree with the attorney general’s decision, he didn’t see things changing anytime soon. “We won’t see a lot of impact until a case can be brought to the courts,” he said, where conflicts between state and federal law would be determined “once and for all.”
He referenced a 2010 immigration law in Arizona that required law enforcement to ascertain the immigration status of people during routine stops as an example. The DOJ said it violated civil rights, and the law was eventually thrown out in the courts. Whether the courts decide states rights prevail here or not is still in the future. Until then, he said, “we’ll be going around and around in circles.”
Banking has been a pain point for the industry, with most declining to work with dispensaries. Safe Harbor Private Banking, a Partner Colorado Credit Union program based in Denver, stepped up to support dispensaries otherwise forced to deal mostly in cash.
When asked whether they were giving their Colorado customers any new guidance since the DOJ announcement, Safe Harbor CEO Sundie Seefried said via email: “…It’s ‘business as usual’ serving our cannabis banking clients, and we continue to work under FinCEN and BSA/AML guidelines/regulations, until we receive further guidance.”
Following the lead of the Obama era DOJ, the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury issued its own guidance and requirements for banking institutions providing services for marijuana-related businesses. The Banking Secrecy Act (BSA) and its Anti-Money Laundering (AML) rules require banks to file regular reports that help federal investigators looking into financial crimes. No changes have been issued there.
For her part, town clerk Cathy Derby said it’s “business as usual” for Carbondale’s licensing process. Derby said that although the State of Colorado generally defers to the town when it comes to dispensary licensing, she would anticipate hearing from state regulators if a federal change were expected to impact us here.
There are five licensed marijuana facilities in Carbondale, with four currently open for business. There is no cap on the number that could be issued, though there is a 10 percent local ownership requirement. The Town of Carbondale estimated $55,000 from marijuana business related sales and excise taxes in the 2018 municipal budget.
At least one local dispensary isn’t concerned. “Haven’t heard anything,” Rocky Mountain High Dispensary manager Kyndal Coppock said. “Nothing’s really changed.”