If you are involved in the marijuana industry in Oregon, and haven’t yet seen today’s pronouncement from the U.S. Attorney for the District of Oregon, then you should stop what you are doing and listen up: the Feds will not continue to look the other way with respect to certain categories of crimes illegal under federal law (many of which are also crimes under Oregon law).

The Memorandum was issued by Billy Williams, the U.S. Attorney for Oregon (the “Williams Memo”). It sets forth guidelines of how his office will exercise prosecutorial discretion. Mr. Williams explains that Federal prosecutors in his office will do what (IMHO) both the (since withdrawn) Cole Memo and the (now controlling) Sessions Memo always contemplated they would do: enforce federal law against marijuana operations with a primary (but not exclusive) focus on the following five enforcement priorities:

  • Overproduction and interstate trafficking;
  • Protecting Oregon’s children;
  • Violence, firearms, or other public safety threats;
  • Organized crime – including tax evasion and money laundering; and
  • Protecting natural lands, natural resources, and Oregon’s environment.

Significantly, Mr. Williams shares his thoughtful reasoning employed in the development of these guidelines. Presumably these Oregon-specific guidelines will also serve as a foundation for the issuance of similar guidelines by U.S. attorneys in other states where cannabis has been legalized for adult use.

However, Oregon may be a particularly troublesome jurisdiction for federal prosecutors because its regulatory scheme basically contemplates an unlimited number of licenses and there is no vertical integration requirement. The number of licensed growers, coupled with efficient cultivation techniques and the seasonality of outdoor growing, has led to significant overproduction in Oregon. Indeed, many growers have been imploring the Oregon regulators to beef up their enforcement efforts to prevent both unlicensed growers (i.e., competition that does not have to incur costs of regulatory compliance) as well as licensed growers whose produce sometimes seems to find its way into the black market notwithstanding their cannabis tracking software, METRC.

Query whether the Williams Memo’s express focus on “excess production” in Oregon is a thinly-disguised “suggestion” that the Oregon legislature needs to increase funding for local enforcement and oversight if they don’t want the Federales stepping in and asking questions later. Remember, even the prosecutorial “protection” afforded under the withdrawn Cole Memo was premised on a robust state regulatory regime, including monitoring and enforcement oversight. The Williams Memo was not shy about emphasizing the following three problems:

A lack of comprehensive and accurate data from regulators at the Oregon Liquor Control Commission,

Too few resources dedicated to enforcement and oversight, and

Significant overproduction.

Unfortunately but hardly surprisingly, the Williams Memo expressly refuses to make any promise to overlook state-legal and regulatory compliant marijuana businesses because Mr. Williams took an oath to uphold federal law as the supreme law of the land.