On November 28, 2016, President-elect Donald Trump announced that he would nominate Congressman Tom Price of Georgia to be his Secretary of Health and Human Services. Days before, the Trump transition team announced the selection of Alabama Senator Jeffrey Sessions to serve as America’s next Attorney General. Both men are on record as deeply concerned about the advancing legalization of marijuana.
But barely two weeks before these federal cabinet announcements, Florida’s medical marijuana ballot initiative, Amendment 2, won nearly 2 million more votes than Donald Trump. On November 9th, Americans woke up to learn that in addition to Florida, three more states (Arkansas, Montana and North Dakota) had voted to approve or expand the legalization of medical marijuana – bringing the total of legalizing states to 29 (plus the District of Columbia). In that same election cycle, voters in California, Maine, Massachusetts and Nevada took marijuana legalization to the max, joining Alaska, Colorado, Oregon and Washington State (plus the District of Columbia) in voting to legalize cannabis for recreational use.
Despite the revolution occurring at the state law level, federal drug laws technically still classify marijuana as a Schedule 1 illegal substance (i.e., a drug with no accepted medical use and a high potential for abuse). Many observers of the developing medical marijuana industry are questioning how President-elect Trump’s recent cabinet picks will affect the legalization of cannabis.
The New Trump Team
In a speech he delivered on the floor of the U.S. Senate on March 7, 2016, Donald Trump’s nominee to be the next Attorney General of the United States, Alabama Senator Jefferson B. Sessions III (R-AL) warned that marijuana was a dangerous gateway drug. Discussing the increasing opioid addiction epidemic facing many communities in America, Senator Sessions stated:
You can't have the President of the United States of America talking about marijuana like it is no different than taking a drink, saying I used marijuana when I was in high school and it is no different than smoking. It is different. And you are sending a message to young people that there is no danger in this process. It is false that marijuana use doesn't lead people to more drug use. It is already causing a disturbance in the States that have made it legal. I think we need to be careful about this. What if this is the beginning of another surge in drug use like we saw in the sixties and seventies that led to massive problems in our communities?
Such opinions are significant when they are held by the Attorney General of the United States. As the head of the U.S. Department of Justice, the Trump Administration’s Attorney General can act quickly and decisively to reverse the Obama Administration’s current policy of non-enforcement towards marijuana communities operating under the aegis of state laws. Without that policy of administrative self-restraint, U.S. attorneys across America could arrest marijuana producers, processors, distributors, retailers and users, regardless of their state licensure.
Senator Sessions is not the only future Trump cabinet member to be concerned about the increasing misuse of opioids. The Trump transition team announced that Congressman Tom Price (R-GA) will be nominated to head the Department of Health and Human Services (HHS). Congressman Price has voted repeatedly against legislative initiatives designed to prevent the Justice Department from spending federal funds to prosecute members of the medical marijuana community; he also voted on three different occasions against legislation intended to give military veterans the freedom to secure medical marijuana recommendations through physicians employed with the Department of Veterans Affairs.
However, Congressman Price’s record also suggests that his concern over cannabis is focused primarily on marijuana as a gateway drug to opioid abuse, which has reached crisis levels in his Atlanta-based congressional district. He did vote to support legislative efforts directed at allowing specified patient populations to access low-THC cannabis oil -- similar to the regulatory model for “Charlotte’s Web” cannabis approved by Florida in 2014. He also has voted to ensure that federal funds are not used to impede research into industrial uses of hemp.
Nevertheless, the consensus among those who know Congressman Price is that he is far from an advocate for marijuana legalization. Although federal regulation of illicit drugs rests primarily with the Justice Department, the HHS secretary exercises jurisdiction over a wide swath of America’s doctors through their involvement in federal healthcare programs. For example, the agency could penalize doctors who recommend marijuana for patient use. It also could pursue legal action against marijuana producers or dispensers because cannabis remains an illegal Schedule 1 substance under current federal law.
Forces for [NO] Change
Despite having clear records disfavoring marijuana legalization, the selection of Messrs Sessions and Price is far from a guarantee that the marijuana no-enforcement policies of the Obama Administration are heading for the dustbin of history. The hedge against such a stark reversal in federal policy is twofold.
Politically, a crackdown on state-authorized medical marijuana communities would run contrary to the will of voters in 29 states across the country, including those in Senator Session’s own home state of Alabama. On May 4, 2016, Alabama Governor Robert Bentley signed into law SB 174, known as “Leni’s Law,” that creates an affirmative defense against prosecution for the unlawful possession of marijuana, and extends that legal defense to all Alabama patients suffering from debilitating epileptic conditions — or their caregivers — for the possession and use of marijuana extracts that are high in cannabidiol (“CBD,” a component of marijuana), whether the CBD was produced in Alabama or in other states. The new law, which went into effect on June 1, 2016, allows CBD oils with up to three percent (3%) tetrahydrocannibinol (“THC”), the psychoactive property of marijuana that leads to a euphoric high.
Economically, aggressive federal enforcement could cause chaos in a $6.7 billion industry that already is attracting major investment from Wall Street private equity funds and is expected to reach revenues of $21.8 billion by 2020. In Florida alone, estimates place the value of the state’s medical marijuana market at $193 million by 2018, and growing to nearly $1.5 billion by 2020, according to a report issued by Arcview Market Research in March of 2016. Similarly, a separate staff report issued for the Dade County Commission estimated that annual sales in the Southern Florida Region, comprising Miami-Dade, Broward, Palm Beach, Monroe and Martin counties, would reach nearly $300 million following passage of Amendment 2. Given that Donald Trump’s four year term carries into 2020, when economists estimate that the legalized marijuana industry will be generating over $20 billion in revenues for the national economy, and concomitant taxes will likely generate significant dollars for state and local governments, a 2017 federal crackdown on marijuana would carry a hefty price tag.
And yet, even with an incoming president who made his fortune through the graces of free-market capitalism, the future of medical marijuana legalization is far from clear. With politics and money arguing against a reversal of current federal tolerance, and incoming cabinet members who appear to have no tolerance for such tolerance, marijuana legalization seems to be yet another issue of national importance that will be resolved only at the eleventh-hour, on a “to be announced” basis from Trump Tower. To date, the President-Elect himself has iterated no definitive position on marijuana legalization. Rather, his public comments over the years reflect a variety of positions indicative of an open mind.
For example, Private Citizen Trump originally was for legalization in 1990 as the only way to win America’s “War on Drugs.” More recently, Presidential Candidate Trump expressed his reservations about legalization during the recent campaign cycle. In October of 2015 while on the campaign trail, candidate Trump stated that "[i]n terms of marijuana and legalization, I think that should be a state issue, state-by-state," while taking questions during a political rally at a casino outside Reno, Nevada.
Most recently, on February 10, 2016, Mr. Trump appeared to reiterate a previously stated position favoring medical marijuana, telling interviewer Bill O’Reilly of Fox News that for some patients with serious problems medical marijuana is a very important resource:
O'REILLY: In Colorado, they legalized pot, ok. $1 billion industry, a billion-dollar a year industry in Colorado. And all of the dealers, all the pushers are going to Colorado, loading up on the free pot because it's legal, not free -- legal and then zooming around the country selling it. Does that concern you?
TRUMP: That's a real problem.
O'REILLY: What would you do?
TRUMP: That's a real problem.
O'REILLY: What would you do?
TRUMP: There is another problem. In Colorado, the book isn't written on it yet, but there is a lot of difficulty in terms of illness and what's going on with the brain and the mind and what it's doing. So, you know, it's coming out probably over the next year or so. It's going to come out.
O'REILLY: What would do you to stop it? What would you do?
TRUMP: I would really want to think about that one, Bill. Because in some ways I think it's good and in other ways it's bad. I do want to see what the medical effects are. I have to see what the medical effects are and, by the way -- medical marijuana, medical? I'm in favor of it a hundred percent. But what you are talking about, perhaps not. It's causing a lot of problems out there.
O'REILLY: But you know the medical marijuana thing is a ruse that I have a headache and I need, you know, two pounds of marijuana.
TRUMP: But I know people that have serious problems and they did that they really -- it really does help them.
Quo Vadis Legalization?
Like most everything associated with this year’s presidential transition, America will have to wait and see what Mr. Trump decides. Even with the Obama Administration’s non-enforcement policies, federal law’s position that marijuana remains an illegal substance has impeded the development of vital industry infrastructures.
Foremost among these impediments are the de facto denial to marijuana industry members of (i) a viable banking system that will provide secure and professional-grade financial services, as well as (ii) insurance options that are critical to encourage entrepreneurs and developing industries to pursue growth in the face of economic risks. Concerns with federal compliance obligations resulting from the incongruity between federal and state law on marijuana use have deterred large financial institutions and major insurers from serving what is undeniably a maturing cannabis industry.
However, despite the sense of doom descending on legalization advocates following Mr. Trump’s most recent cabinet picks, it is too early to proclaim the end of legal marijuana in America. The president-elect has made two things crystal clear: (i) he is a man who will make up his own mind, and (ii) as president he will demand strict loyalty from his appointees. All of which suggests that in the context of medical marijuana, Attorney General Sessions and HHS Secretary Price may surprise their Congressional colleagues.
Interesting times ahead!