Historically speaking, the US Department of Justice hasn’t exactly been a friend to cannabis. Since the 1970s, the agency has been in charge of enforcing the federal Controlled Substances Act, the centerpiece of the country’s war on drugs. But in the months following voters’ passage of legalization measures in Colorado and Washington, as legal observers wondered whether the DOJ would stand in the way of markets opening, the agency took a remarkable step that effectively greenlighted state-legal cannabis sales across the United States.
“We were trying to say to the industry: We think there’s a space for you to operate.”
In August 2013, then-Deputy US Attorney General James M. Cole issued a memo to federal prosecutors that set out guidelines for the newly legal states. Known today as the 2013 Cole memo, the document directs US attorneys to focus their enforcement efforts on a narrow list of priorities, such as sales to minors, diversion to other states, involvement with organized crime, and cultivation on public lands.
“We were trying to say to the industry: We think there’s a space for you to operate,” Cole recently told Leafly, “because if you don’t operate a legitimate business in the marijuana space, that space is going to be filled by gangs and cartels, who you really don’t want operating in this space.”
Nearly five years later, state-legal cannabis markets in Washington and Colorado are flourishing. Other states, including Oregon, Nevada, and California, came online while the guidance was in place. And despite being rescinded in January by Attorney General Jeff Sessions, a vocal critic of legalization, the memo continues to influence federal cannabis policy to this day.
Leafly spoke with Cole, now a partner at the law firm Sidley Austin, ahead of his keynote address to the NCIA’s National Cannabis Business Summit and Expo, which kicks off Thursday in San Jose. Here’s an edited transcript of the conversation:
Leafly: The cannabis community is familiar with the Cole memo, which was a nonbinding Justice Department policy that you put out in 2013, a little more than six months after Washington and Colorado voted to legalize cannabis. Can you take me back to what was happening then, what that memo said, and what it was designed to accomplish?
Cole: Basically, as Colorado and Washington had their referenda in 2012 to legalize recreational marijuana, we realized that this was in fact going to be a growing trend. People were going to be smoking marijuana, and they were going to be smoking it legally under state law even if federal law was not allowing it. And they were going to get it somewhere.
We started to really think through the ramifications of that. What are the public safety interests that we have as the federal government in the marijuana space? What is it we’re worried about? Why do we care about this? And we came up with the various priorities in the Cole memo as the way to define why we thought there should be federal enforcement in this space, but limiting it to that—and also having the view that if, in fact, those federal priorities were taken care of, that the state would probably share those priorities. They would want to have their businesses run where they’re not selling it to minors, where you are not causing environmental damage, where you’re not using it to mask other, illegal drug sales that aren’t legal under state law or federal law.
“We wanted to get the cartels and the gangs out of the space, and we wanted to encourage the states to really enforce their own regulations and laws.”
We had a history of the states in the medical field where enforcement was not really robust. We were trying to say to the industry: We think there’s a space for you to operate, because if you don’t operate a legitimate business in the marijuana space, that space is going to be filled by gangs and cartels, who you really don’t want operating in this space. It’s going to give criminal enterprises a lot of revenue, it’s going to provide a product for people to smoke that could well be tainted and dangerous, it’s going to be an area where you can’t control who they’re going to be selling it to. If the states are looking to tax it, you’re not going to be able to tax it well if it’s done by illegal organizations. There were a host of reasons why you just didn’t want the illegal organizations that had been in the marijuana business to stay there. That was one of the big public safety features we were looking at.
We also wanted to give an admonition to the states: If you’re going to do this, do it right. Put some resources behind it. Make sure that you have enough money and enough personnel and sufficient guidelines and regulations and laws in place that it will operate as a legitimate business and not create any of the public safety risks that we had identified.
So, we were doing two things: We wanted to get the cartels and the gangs out of the space, and we wanted to encourage the states to really enforce their own regulations and laws. And we thought, if they did that, all the interests of the federal government would pretty well be satisfied in that space.
Is it fair to say that at that point in your decades of practicing law, state-legal cannabis wasn’t exactly something you’d focused on?
It was not. I had as a young prosecutor done drug cases like every young prosecutor does, but my focus during most of my career as a prosecutor, before I came back as deputy attorney general, was on public corruption cases.
At the time, a lot of people were wondering whether the Justice Department was going to let legalization go forward. Was there any thought, whether within the administration or at the DOJ, of trying to shut it down?
Sure, of course. The first thing you do is an analysis of where you are from a purely legal standpoint on these things, and then you move into the policy standpoint once you have a good handle on the law. The thing about the Controlled Substances Act is that it explicitly does not preempt the field. So, the pure legalization of use of marijuana was something that we couldn’t go into court and stop under state law, because the federal law and the state law could coexist. There was no implied preemption because of the incompatibility of it, and the explicit allowance in the Controlled Substances Act certainly made that a very, very difficult argument to make.
There was some thought that you could, although it might be tough, try to preempt the regulatory scheme, because that might in fact foster and promote the violation of federal law. But then you take a step back and say, well, why would that be a good idea? You’re just going to let it be legalized and have no regulation, no control over it? That’s not achieving what we want from a public safety perspective either and, as a matter of fact, would exacerbate the public safety problems. So that didn’t seem to be a particularly good alternative.
That led us to, OK, so what do we do? Where do we go with this? And that led to the development, and it took some time, of the criteria that we included in the memo—and working that through the administration. This was not something I just wrote at my desk and said, here you go. This was a project that was reviewed thoroughly in the executive branch and decided upon.
Nearly every state-legal market in the United States launched while the Cole memo was in place. While it didn’t entirely stop prosecutions that put people in prison, it basically allowed state-legal commercial cannabis activity to exist. Is that fair to say?
I think it did. And I think that that was part of the philosophy here was that you’re not going to get the cartels and the gangs out of it unless you allow some space for a legitimate business to be in it.
Yet at the same time, this was a nonbinding memo, meaning US attorneys were still technically able to bring cases against state-legal cannabis. That left a lot of uncertainty for businesses trying to operate in the space. What was the thinking behind that? Could it have been a binding policy?
Well, I’m not sure—as a memo, as policy guidance within the Department of Justice, it was the policy of the Department of Justice. In that regard, it did control the exercise of the discretion by US attorneys’ offices.
But there’s a lot of room in that memo, because you can’t anticipate everything. It says these are the criteria where we’re going to agree that we should be using our resources to prosecute cases involving marijuana. But it also says, look, there could be things we’re not thinking about, and on a case-by-case basis, you can bring those up and seek approval to go ahead and prosecute them if they’re not within the guidance. But this was generally meant as a directive to all of the US attorneys as to how they should proceed in bringing or not bringing marijuana cases.
It’s now been five years since that memo was issued. What does James M. Cole think about state legal cannabis in 2018? What seems to be working well, in your view, and what needs work?
I think there are a couple of issues that are challenges as you go forward, and there are similar challenges to the use of any intoxicant or psychoactive drug. The ability to test for drugged driving is a challenge, because it’s not as easy a test as is done for alcohol.
Generally you have states where their compliance has been more robust under the Cole memo, and they’ve gotten the message and that’s been better. It’s not all perfect, and some of this takes time, but I haven’t seen any situations or read about any situations where there’s been large-scale criticism and large-scale failure of the regulatory environment. That happened for a while under the early medical marijuana efforts, but I think it’s really tightened up.
There’s going to be, I think, progression over time, and we’ll have to see how it works as to whether or not this is resulting in marijuana being available to underage people. I think that’s a concern, because that’s where you see the largest agreement in the medical field as to the deleterious effects of marijuana, in the development of younger people’s brains and systems. But again, that’s a situation that’s been around for a long time. It’s something you’re going to have to deal with one way or another, and there’s lots of facets to it.
And in other respects, even though its’ been five years, that may not be long enough to judge the long-term impacts of this one way or another.
One factor federal prosecutors sometimes say guides policy decisions like that is the limited resources available. How big of a factor is that?
It’s an enormous issue. It’s probably the issue as to where you’re going to put your resources and what are the priorities.
Some folks have expressed concern about the slower-than-expected transition away from illegal sales and into the regulated market, in legal states. How concerning is that to you? If you were in the DOJ today, is that something you think would require a response?
You know, generally you take these things case by case. You can’t paint with too broad a brush on a topic like that. Obviously, our goal was to have people be regulated, and the people who aren’t complying with state law aren’t necessarily being regulated.
The benefits that come from regulation—the purity of the drug, the controls on who it’s sold to, the nature of the manufacture of it, the raising of revenue (which is probably one of the reasons many people decide not to comply with state laws, because they don’t want to pay taxes)—all of these things are aspects of this industry which we thought needed to be promoted in a certain way and preserved in a certain way.
If it’s a person here and a person there, it’s probably not worth the time and effort of the federal government to go after these cases, but if it’s on a very large scale, it might be. You have to judge each one on its own merit and under its own circumstances. Find a Licensed Retailer Near You
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