DENVER — Marijuana stocks tanked, investors balked and cannabis users across the country shuddered as the Trump administration signaled its willingness to clamp down on a marketplace that’s grown exponentially over the past three years.
In Michigan, would-be dispensary owner Jerry Millen said he’s not panicking — yet. Michigan permits medical marijuana, and voters this fall may be asked to legalize recreational cannabis.
“Trump’s approval rating is so low that I don’t think he’s stupid enough to mess with patients,” said Millen, of Walled Lake, Mich. “What’s going to happen when they start rolling out children and senior citizens who have been helped by marijuana?”
On Thursday, the Justice Department rescinded Obama administration policies that guided federal prosecutors not to interfere with state laws allowing people to use pot for medical and recreational uses, throwing the whole marketplace into confusion.
In Nevada, dispensary owner Fernando Leal said he was still trying to understand the implications, but stopped short of saying he’d have to lay off any of his approximately 80 workers.
In Fort Collins, Colo, dispensary owner Steve Ackerman urged his industry to hew even closer to the state regulations.
“I think that’s the key, to just follow the rules,” said Ackerman, who owns Organic Alternatives. “I just think it’s important that every business still adhere to the Colorado rules and regulations because those are our defense. Living within those guidelines of this business are what we have going for us and what does allow us to be here.”
Acknowledging the immediate stock impacts, cannabis analytics firm New Frontier Data downplayed the move, saying federal prosecutors had always retained the right to target the marijuana industry. Nevertheless, the small number of publicly traded marijuana stocks dropped sharply on Thursday. Stocks dropped similarly in early 2017 when then-White House spokesman Sean Spicer suggested Sessions might make this move.
“Consumers are not going to stop buying cannabis in legal states, and businesses are not going to start laying off people or closing their doors just because of this announcement. In the long run, the key question is how, specifically, the DOJ intends to enforce federal law in legal states, and that is still too early to tell,” said New Frontier Data CEO Giadha Aguirre De Carcer.
Eight states have legalized recreational marijuana, including California, which began sales Monday. Industry advocates say Sessions’ announcement will likely dissuade large investors who were already worried about an industry that remains entirely illegal at the federal level. A separate law already protects the medical marijuana industry, although it’s due to expire later this month.
Matthew Schweich of the pro-legalization Marijuana Policy Project noted that a recent Gallup poll shows 64% of Americans support making marijuana legal for adults, but said he worries the Trump administration could unleash the FBI against communities that voted to legalize.“This decision may very well lead to federal agents raiding licensed, regulated, and tax-paying businesses — these businesses are employing thousands of Americans and generating hundreds of millions of dollars in tax revenue for public services including substance abuse treatment programs and new school construction,” Schweich said. “MPP will be pushing Congress to pass legislation this year that establishes marijuana policy as a states’ rights issue and prevents federal interference.”
Investors have poured billions of dollars into the cannabis industry across America, from mom-and-pop pot shops to American Green, which bought an entire California town to create a marijuana mecca. While no marijuana is being sold or grown in Nipton, Calif., the company’s renovations are well underway.
“This level of confusion and lack of constitution does not justify actions against the American people,” said Stephan Shearin, American Green’s Nipton general manager.
Marijuana enthusiasts who spent the past three years developing a wide-ranging array of products say Sessions’ move also risks chilling the industry’s entrepreneurial spirit. They note that the American cannabis industry is 100% homegrown.
“The most disappointing point about this is that it goes against what over half the states and half the population of the country have voted to support,” said Jeffry Paul of Cannabiniers, a Nevada-based manufacturer of cannabis-infused teas and coffee. “The attorney general is going against the will of the people, which the government is supposed to take into consideration. President Trump’s platform was about creating jobs and this industry alone in California is projected at $8 billion, which is creating thousands and thousands of jobs. Ultimately the will of the people and job creation is in jeopardy, so what is the objective here being put forth?”
In his announcement, Sessions said he was simply revoking an Obama-era rule that inappropriately substituted the judgement of bureaucrats for that of Congress. The federal government has refused to lower the classification of marijuana from a Schedule 1 drug, keeping it on par with narcotics like heroin and cocaine, despite its widespread use and little evidence that cannabis is anywhere near as harmful as even alcohol.
California’s marijuana marketplace, which launched Monday, is posed to become a worldwide phenomenon worth a much as $5.1 billion this year, according to cannabis financial analysis firm GreenWave Advisors. Marijuana tourism is also a fast-growing industry across the states where cannabis is legal for adults to buy: California, Nevada, Colorado, Oregon, Washington and Alaska. Maine and Massachusetts have legalized cannabis but not yet launched sales.
“This move represents a broken campaign promise by the president,” said Tom Angell of the pro-legalization group Marijuana Majority. “He clearly and repeatedly pledged that he would respect state marijuana laws if elected. With polls showing that marijuana legalization is way more popular than the president is, this will likely turn out to be a huge political disaster for the administration. Either way, it’s not going to stop even more states from modernizing their cannabis laws.”
Meanwhile in Vermont, lawmakers forged ahead with a legalization proposal on Thursday after shooting down efforts to delay it in light of Sessions’ announcement.
Contributing: Kathleen Gray, Detroit Free Press, April McCullum, Burlington Free Press, James DeHaven and Brian Duggan, Reno Gazette-Journal, Nick Coltrain, Fort Collins Coloradoan.
credit:usatoday.com
