Business, Featured, Politics

Cole Memo Reversal Unlikely to Impact Kenai Peninsula Cannabis

by Allison Sayer for Seward City News-

On Thursday January 4, US Attorney General Jeff Sessions rescinded the Obama-era Cole Memo.  Sessions’ action was meant to reverse the Obama administration policy of “non-interference” with marijuana in states that had legalized marijuana.

Will this action have any impact on the legalized cannabis trade on the Kenai Peninsula?

What Did the Cole Memo Say?

The Cole Memo gave instructions to Federal law enforcement agencies to use “its limited investigative and prosecutorial resources to address the most significant threats.” In the case of marijuana-related offenses, the list of “significant threats” included selling marijuana to minors, growing marijuana on public land, using marijuana sales for money laundering or to aid other criminal activity such as illegal firearms distribution, and using marijuana sales to fund gang related activity.

In other words, as High Bush Buds owner Patricia Patterson put it, “It basically said if you’re not a criminal we’re not going to come after you.”

The Cole Memo went on to state that marijuana operations under robust state regulatory control were less likely to contribute to these “significant threats” than operations outside of any state control. It also reminded the public that federal enforcement is rarely involved with low level marijuana related offenses, leaving this to state and local level enforcement.

The Cole Memo gave a tacit acknowledgement that cannabis businesses operating within a well regulated state structure would not be pursued by federal drug authorities. This contributed confidence to marijuana start ups and investors.

When Sessions rescinded the Cole Memo, he removed this tacit acknowledgement. The implication is that cannabis businesses operating within states that have legalized marijuana can be pursued by federal agents.

Nothing Has Changed for Local Police

Soldotna Chief of Police Peter Mlynarik explained that nothing has changed at the local police level. The Cole Memo specifically deals with federal drug enforcement agencies such as the DEA and the FBI.

Individuals and businesses whose marijuana possession is in compliance with Alaska state marijuana regulations will not be arrested by local police. This is the case even if police encounter marijuana in the course of pursuing a call for an unrelated crime.

According to Chief Mlynarik, the area where the difference between state and federal law is most difficult for local police is seized property. For example, what would happen if someone stole a large quantity of marijuana from a legal business, and the police caught the thief? If the local police seized the marijuana from the thief, it would be extremely “tricky” for them to return the stolen goods to their rightful owners. How can they transfer marijuana to another person without violating their oath to uphold federal law?

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While there have not been any large thefts like the hypothetical one described above, there are many small scale seizures. For example a person can be taken to jail and have marijuana on their person. They can not take the marijuana into the jail with them; they must surrender it. The police can not simply hold on to it for them and give it back when they get out. Even though the marijuana is this person’s legal property, the police have to destroy it. The police don’t get into these conundrums on purpose. “We don’t really want it,” says Mlynarik.

Federal Enforcement in Alaska?

The Drug Enforcement Agency stated that they do enforce federal law and “will continue to do so.” Whether their enforcement approach will change in Alaska is unclear, as they “do not discuss enforcement strategies.” 

The Alaska U.S. Attorney’s approach to Sessions’ action was lukewarm.

A prepared statement from the Alaska U.S. Attorney reads, “The highest priorities of the U.S. Attorney’s Office in Alaska are consistent with those of the Justice Department nationally: combating violent crime, including as it stems from the scourge of drug trafficking. Consistent with those priorities, the U.S. Attorney’s Office released an Anti-Violent Crime Strategy in October of the past year.  We will continue to focus on cases that meet those priorities.”

This statement indicates that little will change for Alaska’s legal marijuana industry, unless members of that industry are involved with other crime.

Business As Usual for Retailers, But With Care

Patricia Patterson, owner of Soldotna’s High Bush Buds was kind enough to give me her perspective on the recent action from a retailer’s point of view.

The bottom line: “I don’t feel there’s going to be much of an impact.” She states she has “no fear of federal agents walking in my store.”

However, the change in the federal climate could cause her a few problems. She worries a bit about “ancillary businesses.” No business operates in a vacuum. Patterson contracts out for services such as printing, payroll, and garbage collection among others. What happens if those businesses reconsider working with her? “There are very few businesses that work well with marijuana,” she says, “If we lose a few [there may not be] another right there.”

According to Patterson, the most important thing she can do within the new federal climate is follow the law to a T. “It heightens how important it is that we follow all laws, regulations, and statutes in order to protect ourselves from federal prosecution,” she says. In addition to ensuring compliance with state marijuana control laws, Patterson feels a heightened pressure to go over other aspects of her business with a fine toothed comb. For example, she wants to ensure her taxes are perfect, and that she is in compliance with all other laws pertaining to operating a business. In order to keep the State of Alaska’s backing, Patterson feels it is now “more important to make no mistakes.”

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