Recent developments in three New England states indicate that popular support for legalized marijuana is growing, even as the federal government reverses the hands-off policy of the previous administration.

New Hampshire On January 9, 2018, the New Hampshire House of Representatives approved a bill to make marijuana legal for adults over the age of 21. The bill would allow for home cultivation of up to three mature and three immature plants. While the measure does not include provisions for commercial sale, regulation or taxation, such provisions have been under consideration by the legislature. This latest step toward full legalization follows the decriminalization of marijuana use in 2017 and the legalization of medical marijuana in 2013.

The bill is not certain to become law, however, as Governor Chris Sununu is reportedly opposed to legalizing recreational use and home cultivation. In addition, a commission studying the matter is not expected to issue a report until the end of 2018.

Vermont On January 10, 2018, the Vermont state Senate gave its final approval to a bill that would allow for legal recreational use of marijuana. The bill had already been approved by the state’s House of Representatives and if approved by Governor Phil Scott as expected, the law would go into effect on July 1, 2018. This would make Vermont the first state to legalize marijuana use by legislative action rather than through a popular referendum. The new law would make it legal for adults over the age of 21 to possess up to one ounce of marijuana and to possess two mature or four immature plants in each dwelling unit. The law does not provide for commercial cultivation, sale, regulation or taxation. However, commentators believe that this may be a step in that direction. Vermont has permitted medical marijuana use since 2004, and it decriminalized possession of amounts under one ounce in 2013. There are currently four licensed dispensaries in the state.

Massachusetts Meanwhile, in Massachusetts, where Bay Staters voted to legalize recreational marijuana in 2016, the newly created Cannabis Control Commission (CCC) is preparing for the July 1, 2018, effective date of the new law. Draft regulations approved by the CCC on December 21, 2017, address license categories, licensing process requirements, operating requirements and enforcement measures.

Whether the nascent industry will be able to get off the ground in Massachusetts is now an open question, however. The Memorandum for All U.S. Attorneys on Marijuana Enforcement issued by U.S. Attorney General Jeff Sessions − rescinding an Obama-era policy that allowed states to implement their own laws without fear of federal intervention so long as issues such as youth use, impaired driving and interstate commerce were addressed − has made industry watchers wary. Attorney General Sessions’s memo emphasizes the view that “marijuana is a dangerous drug and that marijuana activity is a serious crime.” The enforcement of federal marijuana laws will apparently be left to the discretion of United States Attorneys.

The U.S. Attorney for Massachusetts, Andrew Lelling, has issued a statement indicating that he would be proceeding on a case-by-case basis in deciding what crimes to prosecute. Lelling concluded by stating that “deciding, in advance, to immunize a certain category of actors from federal prosecution would be to effectively amend the laws Congress has already passed, and that I will not do. The kind of categorical relief sought by those engaged in state-level marijuana legalization efforts can only come from the legislative process.”

In light of this uncertainty, a majority of Massachusetts’s 17 medical marijuana dispensaries notified customers in early January that they would no longer accept debit card payments, indicating in some cases that their credit card payment processing companies were no longer willing to process payments for fear of being subject to federal prosecution for charges such as money laundering.

Where there was already concern that there would be shortage of supply due to a lack of cultivators when the new recreational law went into effect in July 2018, uncertainty about federal prosecution may put an additional damper on prospects for new businesses.