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Sorry, Jeff Sessions: Congress Aims to Extend Medical Marijuana Protections

By Sean Williams – Mar 25, 2018 at 11:41AM

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Consider this a rare instance where the opinions of the public and lawmakers align on cannabis.

In our neighbor to the north, the cannabis industry is budding at an incredible pace. Canada legalized medicinal marijuana all the way back in 2001, and Health Canada, its version of the U.S. Department of Health and Human Services, has been overseeing licensing and production ever since.

Today, Canada stands on the verge of legalizing recreational cannabis. A bill introduced in April 2017 has made its rounds in the federal government and is set for a June 7 Senate vote that should lead to legalization shortly thereafter, assuming passage in the Senate. According to regulators, adults over 18 in Canada should be able to legally purchase cannabis beginning in August or September, leading to $5 billion or more in annual sales, if approved.

A judge's gavel next to a book on federal and state marijuana laws.

Image source: Getty Images.

The U.S. cannabis industry is stuck in neutral

Comparably, the United States is stuck in the marijuana "Stone Age." Not only is there little hope of recreational legalization on the horizon, but there's virtually no chance that the federal government with alter its Schedule I classification on pot, which makes it entirely illegal and categorizes it as highly prone to abuse and having no recognized medical benefits.

This Schedule I classification makes life very difficult for medical patients, investors, and marijuana businesses alike. For example, businesses have limited or no access to basic banking services, including lines of credit or something as simple as a checking account. Since U.S. financial institutions report to the Federal Deposit Insurance Corporation, a federally created entity, and pot is illegal at the federal level, any assistance provided by banks to marijuana companies could be construed as money laundering, under a strict interpretation of the Controlled Substances Act (CSA).

Similarly, pot-based businesses are forced to pay a ridiculously high effective tax rate that can approach 70% to 90% as a result of tax code 280E. Put simply, since cannabis is illegal, businesses that primarily generate their sales and income from an illegal substance under the CSA are unable to take normal corporate income-tax deductions.

As for patients, they're left out in the cold because of bureaucratic red tape. With only one legal growing facility in the U.S. at the University of Mississippi, researchers' hands are tied in validating the scientific risks and benefits of medical cannabis.

Jeff Sessions addressing an audience.

Jeff Sessions addressing an audience. Image source: Jeff Sessions' Senate webpage.

Jeff Sessions declares war on the U.S. pot industry

And at the heart of this opposition is Attorney General Jeff Sessions, who has made clear on a number of occasions how he feels about weed. He's suggested that "good people don't smoke marijuana," as well as intimated in speeches that marijuana is one of the drugs to have caused the opioid epidemic, rather than being a solution for it.

Last May, Sessions sent a letter to a handful of his congressional colleagues requesting that they repeal the Rohrabacher-Farr Amendment, also known as Rohrabacher-Blumenauer. This amendment is attached to federal spending bills, and ii's what currently disallows the Department of Justice from using federal dollars to go after medical marijuana businesses in legal states. Sessions hasn't been successful in getting this amendment tossed out.

But Sessions was able to successfully rescind the Cole memo on Jan. 4. The Cole memo, written by former Deputy Attorney General James Cole under the Obama administration, outlined a set of guidelines that states would have to follow if they wanted to keep the federal government from interfering with their weed industry. Among these guidelines were provisions to keep marijuana away from adolescents, as well as ensuring that pot grown within a state stayed in that state. The rescinding of this memo by Sessions, who claimed it overstepped its bounds when implemented, now allows state prosecutors to use their discretion in bringing charges against businesses and individuals that violate the CSA -- even in states that have legalized. 

A cannabis bud lying atop a doctor's prescription pad.

Image source: Getty Images.

Congress strikes back

However, Sessions' views aren't in the majority. A Gallup poll released in October showed that an all-time high 64% of respondents favors the idea of legalizing marijuana nationally. What's more, four other national polls since April 2017 have shown similar support for legalization. 

Therefore, it should come as no surprise that a federal spending bill designed to fund the government through Sept. 30, the end of the current fiscal year, contains a rider designed to protect medical marijuana businesses from the Justice Department and Jeff Sessions. Under Section 538 of the new law, the Justice Department won't be allowed to use federal dollars to go after medical marijuana businesses. It also continues existing protections for industrial hemp research. The law will limit the scope of what Sessions can do to slow the expansion of cannabis at the state level. 

Of course, that's not all. Last week, a group of nearly five dozen bipartisan lawmakers wrote a letter to the House Appropriations Committee requesting that new, broader provisions be included in the 2019 federal budget that protect all marijuana businesses, not just medical ones, from federal prosecution as long as they're complying with state-passed cannabis laws. As noted in the letter:

We are concerned about the Department of Justice enforcing federal marijuana law in a way that blocks implementation of marijuana reform laws in those states that have passed such reforms. The issue at hand is whether the federal government's marijuana policy violates the principles of federalism and the Tenth Amendment. Consistent with those principles, we believe that states ought to retain jurisdiction over most criminal justice matters within their borders. 

Thirty states have legalized medical cannabis in the U.S. -- Virginia became the 30th very recently -- and nine others have OK'd recreational weed. The stakes are high, and Congress appears to finally be siding with the majority view of the public, at least in this rare instance.

A drug free zone sign in a quiet neighborhood.

Image source: Getty Images.

Don't expect marijuana's scheduling to change anytime soon

But it's also pretty clear that as long as Jeff Sessions is the attorney general, and President Trump remains in the Oval Office, there's virtually no chance marijuana's scheduling will be altered.

Back in 2016, the U.S. Drug Enforcement Agency (DEA) had an opportunity to reschedule or de-schedule pot following two petitions to do so, but following the recommendation of the Food and Drug Administration it decided to let things be. In particular, the DEA found a lack of medical benefit evidence, as well as a high probability for misuse, as reasoning to leave its Schedule I classification in place. Considering how long petitions can take to work their way up the chain of command at the DEA, it's unlikely marijuana will get another look from the regulatory agency anytime soon. 

Meanwhile, Trump, who was supposedly "100 percent" behind the idea of medical marijuana during his campaign, has seemingly cooled on the topic of legalization. For example, Israel recently shuttered plans to export dried cannabis for medical purposes to the United States to satisfy Trump, according to reports. 

There simply isn't a pathway to legalization at the federal level right now, which leaves what could be the most lucrative marijuana market in the world stuck in limbo. That's bad news for patients who might benefit from medical cannabis, as well as for investors.

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