It appears that state governments and newly elected and appointed federal officials seem to be at an impasse when it comes to marijuana laws. Newly appointed Attorney General, Jeff Sessions - who has a history of being a staunch opponent of legalized marijuana and being a big proponent of marijuana enforcement on a federal level - recently commented that - "States ... can pass the laws they choose. I would just say it does remain a violation of federal law to distribute marijuana throughout any place in the United States, whether a state legalizes it or not.” Not only has Sessions continually made statements echoing anti-marijuana sentiments, but he has also more than implied a possibility of future federal crackdowns in states with legal marijuana programs in a Reagan like manner. In fact, even more recently, new Press Secretary Sean Spicer furthered these sentiments when he told reporters at a news conference that the administration had no plans to continue the Obama administration’s permissive approach in states that have legalized marijuana for recreational use.
Statements like the ones above along with the anti-marijuana attitudes of those within the Trump administration have frustrated entrepreneurs and citizens alike who voted to legalize marijuana in their respective states. Ironically, these attitudes undermine the long standing precedent of states rights that conservatives like Sessions have a history of fought for so furiously. Many times in the past we have seen states act as so-called “laboratories of democracy” - a phrase coined by U.S. Supreme Court Justice Louis Brandeis in the famous 1932 New State Ice Co. v. Liebmann case - that act according to their citizens wishes and “try novel social and economic experiments without risk to the rest of the country.” While it seems that historical and legal precedent are on the side of the states, if the comments from the Trump administration are any indication of what the future holds for legal cannabis then those in the industry should be worried.
The federal government’s stance alone won’t prove to be the only obstacle for legalized marijuana, especially in California. The sheer size of California in comparison with the other states who have legalized cannabis shows that California faces a much more daunting task when it comes to regulating cannabis businesses than Washington State, Colorado, Massachusetts, or Nevada- who’s combined populations only account for just over half of that of California. Original estimates were that California would start issuing licenses to businesses to sell recreational marijuana by January 1, 2018. However, some lawmakers in the state have expressed major doubt as to whether or not this is a realistic deadline. Last month during a hearing with Legislative Analyst office representatives, California Fiscal Review Committee Chairwoman Sen. Holly Mitchell (D-Los angeles) expressed concern about banks being unwilling to handle marijuana sales revenue since the drug is still illegal under federal law. She believes that this may require license holders to have to rely exclusively on cash transactions to pay state taxes, which in turn might make the state delay their tax collection for marijuana businesses.
Other concerns from lawmakers are regarding sheer logistics. Some lawmakers, like Sen. Jerry Hill (D-San Mateo) believe that California won’t be able to handle the tens of thousands of requests for licenses that will be coming in. He believes that California may have to implement a provisional licensing system while they process the applications. Therefore with regard to licenses, Sen. Jerry Hill - who also happens to be the chairman of the Senate Business, Professions and Economic Development Committee - says that “there is a considerable amount of skepticism from some of us up here about meeting that deadline.” Sen. Mike McGuire (D-San Rafael) also agrees with these sentiments stating that, “Proposition 64 put a massive requirement on state marijuana regulators and not very much time to accomplish the landslide of rules and regulations mandated by the initiative.. we have to face the facts - its not realistic that all of the Proposition 64 rules and regulations will be in place by the new year.” Even Lori Ajax - chief of the Bureau of Medical Cannabis Regulation which is in charge of providing permits for sellers of recreational cannabis - admitted that “there are a lot of challenges” in the process and that the committee “[will not] be able to grant everyone a license on Jan. 1, 2018.”
Despite, the possibility of delays in licensing in California and the apparent road blocks that might come about from the Trump administration many economists and investors remain optimistic about the future of the cannabis industry. It’s no secret to people versed in the marijuana industry that California is known as “the weed capital of the world.” Not only does California represent 10% of the population of the US, but it also represents the sixth largest economy in the world and it accounts for over half of all current medical marijuana sales in the country. In fact, according to Troy Dayton, the CEO of ArcView market research group, in 2015 California was able to generate around $2.7 billion in cannabis sales, which represents approximately 62% of all medical cannabis sales in the United States. Although these numbers are certainly encouraging, it’s impossible to tell for sure what the future will hold for the cannabis industry.