What the Trump Administration's Position Could Mean for "Legal" Marijuana

The Trump administration has signaled that, unlike its predecessor, it may prosecute federal marijuana offenses even in “legalizing” states. This is definitely a problem for marijuana businesses, their customers, and legalization advocates. But it’s not a new problem – it’s been there all along.

It’s always been misleading to describe what states such as California, Colorado and Washington have been doing as “legalization.” Anyone in a given state is subject to two separate governments – the federal government and that state’s government – both of which have the power to make certain conduct criminal and prosecute offenders. Until recently, in all of these states marijuana was illegal under both federal and state law. (In practice, state and county prosecutors typically prosecute lower-level drug offenses, with federal prosecutors taking the bigger cases. It’s not uncommon for a state prosecutor, in plea negotiations, to threaten to refer the case to the U.S. Attorney’s Office if the defendant doesn’t accept a proposed resolution.)

The “legalizing” states, with their recent legislation, basically just decided they weren’t going to pursue certain types of marijuana-related conduct anymore. But as long as that conduct is still illegal under federal law, it’s not “legal” to engage in it, even in one of those states. It’s just that there’s now only one government, not two, that can prosecute you for it.

It’s not even correct to say, as some have, that there’s a “conflict” between state and federal law in these “legalizing” states. When one government body makes something illegal and another body doesn’t, that’s not a “conflict”; it just means that only one of the two has decided to address the conduct. And even if the combination of legal regimes did appear to create a conflict, the winner would be clear – under the Supremacy Clause of the U.S. Constitution, a valid federal law supersedes any state law to the contrary. A version of this issue came before the Supreme Court back in 2005, with the Court holding that the federal marijuana prohibition trumped California’s permissive medical marijuana law, and specifically reiterating that “if there is any conflict between federal and state law, federal law shall prevail.”

The result is that even in “legalizing” states, it’s always been legally perilous to engage in the marijuana business. During the Obama administration, the Department of Justice issued a memo essentially stating that it wouldn’t bring charges against people in “legalizing” states for conduct that complied with state law. This memo, however, was sprinkled with caveats and exceptions, and was in any event entirely non-binding. Even while this supposedly policy was “in effect,” the government could have at any time changed course and stepped up its enforcement regime – against anyone it chose to target, including businesses that had operated in reliance on the supposed nonprosecution memo.

And even aside from actual prosecutions, illegality under federal law causes a host of other issues. Most banks won’t deal with marijuana businesses, because transacting in money derived from illegal operations can expose them to money laundering charges and other problems (another memo came out on this issue, but as with the previous one, it was lukewarm and nonbinding). Tax burdens are higher, because some expenses that would be deductible for legal businesses are nondeductible for businesses involving illegal drugs. In some states, lawyers can’t work with marijuana businesses because of ethical prohibitions on advising clients to commit illegal conduct.

And now, the new administration is suggesting that these businesses and their customers might end up being subject to criminal enforcement after all. Whether this is a real threat remains to be seen. Public opinion on the marijuana issue has been shifting towards legalization and nonenforcement, and this can affect the feasibility of prosecution efforts. Here in Oregon, for example, some judges and lawyers I know describe a high rate of nullification – jurors refusing to acquit despite clear evidence of guilt – in the marijuana cases that do get prosecuted.

But even if full-scale criminal prosecutions don’t resume in these states, there’s an intermediate option available to the federal government, and it’s one that might prove highly tempting. That option is asset forfeiture – the seizure of money, houses, vehicles, and other property associated with illegal activity. The government doesn’t need to get an actual criminal conviction to seize assets, and both the law and the procedures are weighted heavily in the government’s favor. Asset forfeiture is an increasingly controversial topic and there have been calls to reform the framework, but for now it’s an incredibly powerful tool for the government.

Might the new administration launch an asset forfeiture drive against marijuana businesses? There’s an awful lot of money and property to be gained by doing so (which, according to some, is one reason why governments pursue forfeiture proceedings so zealously). And in the marijuana context, it’s hardly a difficult task. They won’t have to set up complex wiretapping schemes or dangerous undercover operations to find their targets – they can just use Yelp, or drive around until they see a huge neon “FRED’S MARIJUANA EMPORIUM” sign.

We’ll have to wait and see whether any of this happens. As a legal matter, though, it’s entirely possible – and this odd set of possibilities will remain until Americans reach some real consensus as to what we want to do with marijuana.

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