Will the Marijuana Industry Launch the First Big Advocacy Challenge?
As Donald Trump’s administration takes shape, one group is already mobilizing to take action against a key selection and the presumed resulting legislation.
With recreational marijuana legal in eight states, and medicinal marijuana lawful in 28 states, the burgeoning $6.7 billion marijuana industry is experiencing rapid growth in revenues and job creation. And the future looks bright: Nationwide polls affirm widespread support for ending federal marijuana prohibition, and as many as five states will ponder legalization in coming legislative sessions. Arcview Market Research recently projected the industry could generate an estimated $21.8 billion in retail revenues by 2020.
But when President-Elect Donald Trump named Sen. Jeff Sessions (R-Ala.) as his Attorney General nominee, it sent shivers through the industry. Sessions has called legalization a “tragic mistake,” criticized the 2013 Cole memo directing the Department of Justice not to enforce federal law in states where medical and recreational use is legal and said, “Good people don’t smoke marijuana” just last April.
If confirmed as the nation’s chief law enforcement official, Sessions with the stroke of a pen could turn thousands of legal growers and retailers and subvert the will of million of voters by enforcing a federal law that classifies marijuana as a Schedule 1 Drug, the same as heroin, LSD and mescaline.
“Obviously, Jeff Sessions as a U.S. Senator was one of the greatest threats” to the marijuana industry, said Isaac Dietrich, co-founder and CEO of MassRoots, a “social network for the cannabis community” with an estimated 900,000 members. “People are very alarmed about what could happen if he becomes the attorney general.”
The prospect of a sudden reversal in what had been accepted as near-certain expansion of legalization has spurred the marijuana industry to recognize it must rapidly intensify its federal lobbying efforts. Many within the industry have lamented how local and state success has not translated into changing federal law, criticizing how its focus on business has placed relatively little emphasis on dedicating resources to effectively advocate at the national level.
Sessions’ AG nomination may change all that. In fact, some say, it may galvanize the industry into exerting enough political and financial clout to demand Sessions either uphold the Cole memo or be denied confirmation — as well as spur it to demand changes in federal banking laws and tax codes that have hampered investment.
Sessions’ nomination is forcing the industry to “pull its head out of the sand,” said Erik Altieri, executive director of the National Organization for the Reform of Marijuana Laws (NORML). “We’re seeing a political awakening of the marijuana industry.”
“The industry has been a maturing over the years in terms of business,” said Michael Correia, director of government relations for the National Cannabis Industry Association (NCIA). Sessions’ nomination “is a great opportunity for the industry to mature politically.”
“We are coming for him. This issue is important to a lot of people,” said Adam Eidinger, co-founder of DCMJ, a grassroots group that spearheaded Initiative 71, the 2014 ballot measure that legalized marijuana in Washington, D.C. “If the industry rises up and flexes its muscles, I think there is a 50-percent chance that we can stop him just on this issue.”
AT STAKE: JOBS, STATE RIGHTS
According to Correia, Colorado’s legal marijuana industry alone annually generates $1 billion in retail value and “hundreds of millions in tax revenues and up to 50,000 jobs,” proving that “a tax-and-regulate system is better than a black market.”
Trump made “a big deal” during his campaign about saving “1,000 jobs at Carrier,” Correia said, but he is betraying his vow to respect states’ rights and be business-friendly because Sessions as AG would imperil the “fastest-growing industry in America.”
The number of Americans living in states with legal cannabis grew from 17 million to more than 67 million following November’s elections when voters in California, Maine, Massachusetts and Nevada approved ballot measures legalizing recreational use, and voters in four states — Florida, Arkansas, North Dakota, Montana — legalized medical marijuana.
At least five states — Connecticut, Maryland, New Mexico, Rhode Island, Vermont — could legalize recreational marijuana by 2018.
“There is wide and growing support for the idea that states should set policy,” said Robert Capecchi, director of federal policy for the Marijuana Policy Project (MPP), noting if Sessions re-exerts federal authority, it would chill momentum in state legislatures to adopt rules and regulations for legal marijuana.
Colorado and Washington, in particular, have developed regulatory infrastructures that could serve as templates elsewhere, he said. But every state should be able to determine, without federal prohibition, if it wants to legalize and how to structure its regulations. “This is what worked in Washington. This is what worked in Oregon. This is what legalization can look like in Rhode Island,” he said.
“We are hopeful” the federal government will continue to allow states to regulate, Capecchi said, before adding the industry “cannot afford to be complacent” and must demand Sessions issue a definitive clarification of what his policy regarding the Cole memo will be.
“Ultimately, Mr. Trump has said that he fully supports medicinal marijuana and that it should be left to the states,” he said. “Mr. Trump has promised a business-friendly administration and it makes good business sense to allow the states to regulate this growing industry.”
TARGET RED STATE SENATORS
In attempting to force Sessions to uphold the Cole memo or defeat his nomination, the marijuana industry will have allies. Sessions has a checkered record on civil rights and will inspire opposition from Democrats in general and Liberals in particular.
Bill Piper, senior director of Drug Policy Alliance’s (DPA) office of national affairs in Washington, D.C., said his organization has already staged “tele-press conferences” with civil rights groups and criminal justice reform advocates to coordinate opposition. “A lot of our strategy is hitting Sessions on a variety of issues,” he said.
“Sessions is defeatable. He has too many enemies,” Eidinger said.
One tactic is to go directly to the boss. The industry is “looking for a clear understanding that Donald Trump’s policy will trump Sessions’ private views,” Dietrich said. “It would be very alarming” if Trump does not clarify his position before Sessions’ confirmation hearing.
“We’re looking for a clear indication. So far, we’ve seen nothing that would be reassuring,” he said, noting an unacceptable answer would be, it is “the AG’s call.”
“We definitely want to highlight the inconsistency between what Trump said on the campaign trail (because) the nomination of Sessions is the opposite of what he was saying. It makes Donald Trump look bad,” Piper said. “It would be very helpful if Sessions and Trump clarify where they stand.”
Trump and Sessions have not addressed the Cole memo but, Eidinger said, he’s heard insiders within the Trump team have discussed the issue. “We are hanging on every word coming out of the Trump transition team and, so far, there hasn’t been anything good,” he said.
Altieri said NORML is “reaching out to our allies in the Senate” and contacting every member of the Senate Judiciary Committee to ensure Sessions is questioned about his plans regarding the Cole memo, he said, not just in private interviews but in his public confirmation hearing.
Tom Angell, chairman of the pro-legalization lobbying group Marijuana Majority, said his group will target “moderate” Republican senators on the Judiciary Committee, such as Susan Collins of Maine, Jeff Flake of Arizona and Mike Lee of Utah.
“My strategy is to try to convince the administration that cracking down on marijuana laws will be a distraction” and an unnecessary expansion of federal regulatory activism by an administration that campaigned on being business friendly, he said.
Angell noted more people voted to legalize marijuana in Maine and in Florida on Nov. 8 than voted for Trump. “In Florida, medicinal marijuana was approved in every single county in the state. It got way more votes than Trump, or Marco Rubio for that matter. State rights and federal law, it will be interesting to see how (Trump, Sessions) deal with that.”
Piper said the “Red State” strategy could be very effective because marijuana legalization is as popular with Republicans ion many areas of the country as it is with Democrats. “It is (Trump’s) political best interest not to interfere with state marijuana laws. They need to understand the extent of opposition. Sessions is the most controversial of his nominees.”
Eidinger said it is also imperative the industry demand Democrats solidify in opposing Sessions. “The Democrats can control the process” even though the 60-vote threshold to confirm nominations was eliminated in 2013. “The Democrats are not fighting hard enough — that’s really the reason they lost (control of the House and Senate to Republicans) in the first place,” he said.
DCMJ launched a #SmokeSessions campaign to document Sessions’ statements about prosecuting marijuana users. On Nov. 28, Eidinger led DCMJ activists into Sessions’ office and, on Dec. 8, he plans to do so again, this time with medicinal marijuana patients as part of a #ShowSessions campaign. (See Sidebar)
“We’ll be talking to (Congressional) staffers as they come to work” on Jan. 3, Eidinger said. “And we’ll be all-out at the hearings.”
Altieri said NORML is seeking a clarification from Trump and/or Sessions about the Cole memo. If they don’t like the answer, “There will be some blow-back. We can mobilize 1.5 million individuals within 5 minutes. We will put a halt to the nomination.”
He said once NORML issues an online call-to-action, senators and representations will be blitzed with emails, letters and phone calls.
MassRoots’ Dietrich said his online community — referred to as the “Facebook of Cannabis” — has mobilized its 900,000 members via mobile app to contact their elected representatives.
MassRoots has specifically targeted newly-elected Republican Sen. Cory Gardner of Colorado with an email letter signed by 600,000, demanding he “step up and defend the marijuana industry” in his state, Dietrich said, noting his organization is ready to spend “hundreds of thousands of dollars to protest, to stop Senator Session’s nomination.”
Piper said the DPA’s 25,000 members have emailed their senators to voice their opposition to Sessions’ nomination, noting, “There will be more letters and phone calls coming soon.”
GOING ON OFFENSE
MPP’s Capecchi said rather than simply defending what gains the industry has made, Sessions’ nomination has fostered a political awakening that could actually encourage it to be more aggressive in demanding changes in federal laws that have hampered investment.
This could be an opportunity to amend Section 280E of the federal tax code, adopted in 1982 to prohibit businesses “trafficking in controlled substances” from utilizing tax deductions and credits available to other businesses, such as deducting rent and employee-related expenses. Because of Section 280E, a marijuana business owner in Colorado, for instance, can pay an effective tax rate as high as 70 percent, as opposed to the more typical 30 percent rate.
“We’ll be working to change federal law on The Hill. We are moving on that,” Capecchi said. “Right now, they are being taxed like drug dealers” instead of legitimate business that create jobs and contribute to their communities.
“We will not be any less aggressive” in pursuing full legalization everywhere, Angell said. “We just won eight of nine ballot measures. We have a lot of momentum on our side. We will be active beyond the confirmation process.”
For instance, he said, if Sessions is nominated, Marijuana Majority and others will lobby to retain “amendments attached to appropriations bills” that prevent the DOJ from spending money to enforce federal laws in states where marijuana is legal.
“We will seek to broaden that,” Angell said, and to change banking regulations and tax codes, noting a previous proposal to do so lost by just nine votes. “We think that is achievable now with four more states legalizing marijuana. California, itself, has 53 representatives in the House. We can probably win that vote this time.”
The bottom line, NCIA’s Correia said, is Sessions will not be permitted to turn the clock back and re-impose Reagan Era drug laws. “We’ve already seen what a black market is like. Voters are making it clear that they don’t want a return to that, that they like where it is going,” he said. “This is not your dad’s marijuana. This is medicine. This is big business.”
“You cannot put the tooth paste back into the tube,” Capecchi said. “You cannot put a regulated market back underground.”
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