The Guardian Data Systems Blog

Our Perspectives on the Cannabis Industry

Trump & Cannabis – It’s not all gloom and doom and here’s why….

In the last few weeks following the election there has been a lot of chatter about a Trump Administration and what it means to the cannabis industry. President-elect Donald Trump continues to surround himself with advisors who have claimed a strict stance on marijuana policy or reform. His recent appointment of Senator Jeff Sessions of Alabama(R) to the Department of Justice has many people are wondering what he has in mind for the industry and what it may mean for efforts to move forward with reform.

sessionsSessions has been quite outspoken on his stance against cannabis.

He believes that it is a gateway drug that is much more dangerous than alcohol despite the facts that these beliefs have been debunked by experts. At a Senate hearing last spring he was quoted as saying “We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized.” Now, we have some “grown-ups” in charge and everyone is wondering if they’re going to crack the whip.

coleThe industry has been operating under a kind of truce between the federal government and the states – the states operate within the laws and regulations of the state and the feds won’t bust them…. The Cole memo promises that, as long as they abide by a series of guidelines, the federal government will not interfere with states that legalize recreational and, or medical marijuana.

The Justice Department under the guidelines of The Hinchey-Rohrabacher Amendment is prohibited from spending federal funds to enforce prohibition laws in states where medical marijuana has been legalized.

But many are worried that this pinky promise could no longer be honored now that there’s a new leader on the hill.

While on the campaign trail Trump expressed support for state sovereignty stating that it should be left up to the states to decide. In an interview with the Washington Post he was quoted “if they vote for it, they vote for it…..I really believe we should leave it up to the states”

However, it’s not just up to Trump. A new head of the Justice Department could technically revoke the Cole memo. As Attorney General, Sessions would have the ability to rescind those two memos. He also has the power to decide to use federal law enforcement against businesses operating under state law and/or sue the state regulators to effectively block state systems.  Now, Sessions hasn’t exactly kept his feelings about cannabis a secret over the years, he is considered a very outspoken opponent of any kind of legalization but will he do these things?

If the Justice Department lead a strike that affected the heart of the cannabis industry, the supply chain, it would force the producers to go back underground and consumers back to the black-market.

60Voters in 28 states have chosen to have various forms of legal regulated cannabis programs in their states. 1 in 5 Americans live in states where there is legal marijuana now. Keep in mind that 60% of all Americans support marijuana legalization. These are Americans from all ages and walks of life with all kinds of political ideologies. Over the last 10 years public opinion on legalization has done a complete flip flop. In 2006 only 32% favored legalization with 60% opposed. Now only ten years later the numbers are almost the exact opposite. The newest polls from Pew Research show 57% in favor and only 37% of Americans still opposed to legalization efforts. The report also found that an impressive 41% of Republicans support legal marijuana reform and laws, and while that may not represent a majority it is still a significant number.

The Trump Administration, Congress and the powers that be would have to take heavy consideration of the consequences of trying to roll back the existing laws. If the DOJ decided to crack down on legal states, they would be putting themselves at odds with not only all of the American voters that approved the legislation but also all of the state Governors, legislatures and regulatory bodies. During the campaign Trump eluded that he believed in the states rights to make these decisions for themselves on a state by state basis. Clearly, any effort towards overturning any of these laws would be looked at as bad public policy. It would be political suicide.

If the Attorney General and The Dept. of Justice decided they wanted to enforce federal laws on marijuana, Congress would be remiss if they didn’t consider the economic impact of the industry on the individual states as well as the whole country.

californiaFlorida’s medical marijuana program is supposed to bring in between $600-$800 million in sales in the first few years of operation. California’s cannabis market is expected to reach $7.6 billion by 2020 reaping about $1.4 billion in tax revenue in its first year alone. There are now 28 states with legal marijuana and 8 of them will be selling recreationally. Estimates are predicting that the total marijuana market is slated to become a $21.8 billion industry by 2020.  As much as the new politicians might be against marijuana they are very much for money.

With the passing of recreational cannabis in both Nevada and California there now exists a large cluster of legal states here on the west coast. California has a long history of setting political trends in the country and the fact that they have 53 representatives from the state in congress means that there is an opportunity to band together and collaborate to put pressure on the federal government. That won’t be hard for Nevada Senator Richard “Tick” Segerblom. He has already promised to stand and fight if he has to. He attended and sat on a panel at the Marijuana Business Conference & Expo in Las Vegas earlier this month and was quick to point out that “No one’s going to tell us what to do in Nevada”.

houseNow more than half of the Senators and 60% of the House represent cannabis regulated states. The fact is, the cannabis industry begets a significant increase in economic activity, job creation, and tax revenue. There is no doubt that this is a significant benefit to local economies and frankly it would be extremely difficult for them ignore the boon that the industry is bringing to the economy as a whole

As we move forward with the implementation of new laws and other states strive to follow suite any issues that arise from the conflict between state and federal law, issues like banking access and unfair taxation of the industry,  it will be increasingly difficult for them to continue to turn the other cheek.

Meanwhile, businesses in the industry, both established and budding, should try to lead by example and do their part to show law enforcement and government officials that this is an industry that can be run responsibly and safely.

Cannabis BusinessTrue leaders of the marijuana reform movement are continuing with their current strategies to move forward. We too, will continue to educate policy makers, create positive relationships on Capitol Hill  and advocate for respect as far as state laws are concerned from the federal government. We hope that Trump will keep his campaign promise and push Mr. Sessions to respect states rights and continue to uphold the promise of the Cole memo and others to not interfere with state marijuana laws.

There is much to celebrate after this years elections for the cannabis industry. With so many states passing their various marijuana policies there is ample evidence that we are enjoying definite steps in the right direction. We have been working for many years on the forward movement of marijuana reform and aren’t about to let one presidency halt all that we have accomplished. We will continue to move forward with cautious optimism and we hope that you will too.

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