California’s Legal Cannabis Entrepreneurs Carry On Despite Cole Memo Repeal

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WASHINGTON, DC – DECEMBER 15: U.S. Attorney General Jeff Sessions holds a news conference at the Department of Justice on December 15, 2017 in Washington, DC. Sessions called the question-and-answer session with reporters to highlight his department’s fight to reduce violent crime. (Photo by Chip Somodevilla/Getty Images)

“The rescission of the Cole Memorandum by U.S. Attorney General Jeff Sessions is no surprise,” says Steve DeAngelo, CEO of the industry gold standard dispensary Harborside Health Center, in a public response to Sessions’ announcement last Friday. “Sessions is the last standing advocate of the widely discredited, unscientific Reefer Madness approach to cannabis policy…and chances are remote that his action will impact the legal cannabis industry.”

Last Thursday, Sessions announced his move to repeal the Cole Memo, a set of cannabis guidelines crafted to discourage the enforcement of federal marijuana laws. The news came days after California officially legalized adult-use cannabis, briefly sending the new industry into a cold sweat. But once the initial wave of hysteria subsided, the general consensus among entrepreneurs in the Golden State has been that Sessions’ action was more of a publicity stunt than genuine threat.

“It’s very disappointing to see,” says Jason Santos, the CEO and founder of BurnTV—a cannabis-centric Netflix-type digital lifestyle and entertainment platform. “In some ways I think it will cause people in the industry to second guess whether they want to spend money on marketing and advertising, and putting themselves out there. But I’m highly skeptical that it’s going to really impact the industry that much. It feels like a bunch of talk with the intention of creating worry more than it is something that’s actionable.”

Yet, cannabis is still a schedule one drug. So it’s within the realm of possibilities that the government could take down businesses in the legal and black markets.

Santos contends that the federal government doesn’t have the time or money to pursue and dismantle an industry that has a 64 percent approval rate in America. Considering the fact 30 U.S. states have cannabis laws, Santos explains that the Department of Justice will likely create war—at least a massive legal war—if lawful, tax paying businesses get shut down.

It’s still advised for people in the industry to proceed with caution, however. Kellsi Booth, an industry attorney who represents large-scale growers in Los Angeles and Nevada, explains that although the timing of Sessions’ announcement is curious, every business is still considered a target—and will be—until cannabis is rescheduled.

“I am encouraging everyone to get to know their U.S. Attorney,” says Booth. “There are 94 of them and they all have specific regions around the country. California has four, and of those four, three recently changed over to new people, which is very suspicious timing.”

Not only have three U.S. Attorneys changed seats in California over the last couple months, Brian Stretch (the U.S. Attorney for the Northern District of California) announced a sudden leave from office the same day Sessions declared the repeal of the Cole Memo. Then, on Jan. 7, Alex G. Tse, a longtime federal prosecutor who once worked in the San Francisco City Attorney’s Office, was named the U.S. Attorney for the Northern District of California, according to the Eastbay Times.

January 9, 2018 at 07:06PM
Forbes – Entrepreneurs