America’s marijuana industry isn’t sure where President Trump and his attorney general stand on marijuana, but it is forging ahead with expansion plans anyway.
Cannabis businesses are hiring new workers, leasing new space and pushing across state borders. And regulators are drafting rules that will give access to legal recreational pot to tens of millions of adults.
The stakes are high: This is a job-generating industry that cannabis data firm New Frontier Data estimates may be worth $2.3 billion within three years.
“Far from the punchline of a joke, these are real people and real lives,” said Colorado Rep. Jared Polis, a Boulder Democrat who recently co-founded the pro-legalization Congressional Cannabis Caucus.
The nation’s marijuana industry expanded rapidly under President Obama, whose administration laid out Justice Department priorities for targeting drug dealers. In short, the Obama administration said, it would leave companies alone in states where voters approved recreational pot if the states took solid steps to keep marijuana away from kids and profits away from drug cartels.
Medical marijuana is reserved for people who’ve gotten a doctor’s recommendation to use it to alleviate specific symptoms, while states with that permit recreational use allow any adult to buy marijuana.
In states with licensed cannabis stores, it’s easy to forget those businesses sell a plant that remains an illegal Schedule 1 controlled substance under federal law. Federal prosecutors, if they chose, could easily arrest tens of thousands of people who have state licenses to grow and sell the drug, or even anyone walking out of a pot shop with a purchase. But they haven’t.
Trump’s administration may take a different tack, but so far, it has delivered conflicting messages.
Last month, White House spokesman Sean Spicer said the Justice Department would not use federal laws to prosecute medical marijuana users, in part because Congress has already banned it from doing so. But he drew a distinction between medical and recreational use.
“I do believe you’ll see greater enforcement” of federal laws against recreational marijuana use, he said. Then, in the same press conference, he suggested the matter wasn’t settled and referred reporters to the Justice Department for comment.
Shortly after, Attorney General Jeff Sessions in a speech seemed to suggest there’d be stricter enforcement in states with recreational marijuana. Members of Congress, including Sens. Rand Paul, R-Ky., and Cory Gardner, R-Colo., say Sessions has reassured them privately that is not the case.
The whiplash from the shifting positions jostled the market. Marijuana stocks tracked by Viridian Capital Advisors had risen steadily all year – up about 25% – until the day Spicer spoke. Then, in the hours after his press conferences, 80% of those marijuana-related stocks dropped. The next day, the first full day of trading following the comments, it got worse: 92% of the stocks dropped, said Viridian, which provides financial and data-analysis to the cannabis industry.
Those stocks have now largely recovered, said Viridian’s president, Scott Greiper: “I think the industry is very comfortable operating in a harsh, uncertain environment. It’s just what we’re used to.” Viridian tracks the movement of 50 publicly traded cannabis companies that are either worth more than $10,000 each or see trading volume of $20,000 daily.
Alaska, Colorado, Oregon, Washington, Maine, Massachusetts, Nevada, the District of Columbia and California voters have all approved laws allowing adults to grow and possess small amounts of recreational pot, though not every state has a functioning marketplace. And a Quinnipiac University poll released last month found 71% of Americans would oppose efforts to enforce federal marijuana laws in those eight states. The poll also found that 93% of voters support allowing the use of marijuana for medical purposes and 59% support making it legal for all purposes.
Congress has prohibited the Justice Department from interfering with states’ medical marijuana programs, but has remained silent about recreational marijuana.
Many marijuana businesses had hoped Trump would at least maintain the Obama-era attitude, if not relax restrictions even further in a nod to states’ rights, job creation, personal liberty. Trump on the campaign trail said he’d respect state laws that permit recreational pot.
Troy Dayton, CEO of the ArcView Group, which offers cannabis industry investment services and research, says the pot business also plays into Trump’s “America First” policy.
“This would be a really huge missed opportunity if we let other countries get ahead of us in something that is really our ours to lose,” Dayton said. “The question is whether we want these to be American jobs, do we want these to be American companies, or do we want Canada and Germany and Columbia take that market share.”
Dayton said it’s hard to imagine the Trump administration would shut down a widely popular industry: “I have a feeling they get to see the same polls we do.”
Still the broad uncertainty is enough to keep some cannabis businesses cautious. In California, marijuana grower CANNDESCENT has given its products soothing names like “Calm” and “Connect,” instead of relying of more typical names like AK-47 or Durban Poison or Day Wrecker.
“We literally changed our product names in order to better educate the public and seem less ominous to government officials,” said CANNDESCENT CEO Adrian Sedlin.
In states with recreational marijuana marketplaces, many front-line marijuana business say they think the country has come too far to ever roll back recreational pot, and regulators in California and Nevada continue drafting the rules necessary to implement their voter-approved cannabis marketplaces. Polis, the congressman from Boulder, said he plans to re-introduce federal legislation to regulate marijuana like alcohol, which would give states the power to create legal marijuana marketplaces if they choose. Previous measures haven’t received enough support to pass.
Marijuana business owners say they’ll stand tall despite the potential threat to their livelihoods.
“We employ 24 full-time people. It gives us a tremendous sense of pride,” said Amy Andrle of L’Eagle Services, a Denver-based marijuana store specializing in pesticide-free cannabis. “I’m very proud of the work we are doing. This is our small business we are running in this great country.”