On Thursday, the House had passed a continuing resolution to the Appropriations Act which would have kept the government funded through February 16, 2018. That resolution kept in tact the protections for state medical marijuana programs from prosecutions by the Department of Justice, by restricting its funding. The Senate, however, would not agree to the resolution (because it included protections for young immigrants from importation) and the government has shutdown as of midnight on Friday.

The protection for medical marijuana operators that is typically included in the government’s budget, known as the Rohrabacher-Blumenauer amendment (f/k/a Rohrabacher – Farr Amendment), provides that none of the funds made available to the Department of Justice in the Appropriations Act may be used to prevent states from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

This provision had been contained in the appropriations act (Consolidated Appropriations Act, 2017, PL 115-31, Division B section 537), which funded the Department of Justice and other government departments through September 30, 2017. The provision was carried over through the appropriations act (Appropriations Act 2018, PL 115-56, Division D, section 101(a)(2)) that funded the Department through December 8, 2017, and was thereafter extended by Congress through two continuing resolutions through January 19, 2018. With the failure to pass a resolution to continue funding the Justice Department, the limitations on that funding, including those provided by the Rohrabacher Amendment, have no effect (since no funds have currently been approved to begin with).

This may raise more questions in the marijuana industry given Attorney General Jeff Session’s rescission of the Cole Memorandum on January 4th. The Cole Memorandum had provided guidance to federal prosecutors not to enforce federal marijuana laws against those marijuana businesses that were compliant with state law where the federal priorities were not implicated. Based on that rescission, the U.S. Treasury Department, on January 17th, stated that it is reviewing the FinCen guidance for financial institutions that provide services to marijuana businesses.

Specifically, during a hearing before Senate Committee on Banking, Housing and Urban Affairs, at which Under Secretary Sigal Mandelker testified regarding money laundering and the enforcement of the Bank Secrecy Act, Sen. Robert Menendez, D-NJ voiced his concern regarding access to banks and the impact on public safety (given the large accumulations of cash) if the guidance is rescinded. The Senator asked whether the Treasury’s review of the FinCen guidance was an indication that the Treasury Department perceived a conflict with FinCen having standards for banking transactions in states that permit marijuana sales given the Cole Memo rescission. The Treasury Department stated that it did not take a position whether there was a conflict at this time and, instead, reiterated that it was reviewing the guidance.

Despite this turmoil and the temporary lapse in the Rohrabacher protections, however, it is not likely that marijuana operators will see the Justice Department ramp-up widespread criminal prosecutions or civil forfeiture actions against them during the shutdown. First, the Attorney General’s rescission of the Cole Memo left the determination which marijuana activities to prosecute to the discretion of the US Attorneys. While US Attorney Lelling in Massachusetts stated he could not provide assurances that certain participants in the marijuana business will be immune from federal prosecutions and that such determinations will be made on a case by case basis, other US Attorneys, including in Colorado, have stated that their approach will not change as they have always focused on prosecuting those entities that create the greatest safety threats.

With respect to pursuing civil asset seizures and forfeitures during a lapse in appropriations, according to a U.S. Department of Justice FY 2017 Contingency Plan, that had been issued in September 22, 2016, the Justice Department continues the following activities: those funded by a source that has not lapsed, those for which there is an express authority or necessary implication to continue during an appropriations lapse, those related to the President’s duties and those related to emergencies. The Justice Department’s Asset Forfeiture program, pursuant to which authorities can seize property and assets suspected of being connected to criminal activity, is not subject to annual appropriations. Thus, federal employees in those positions are excepted from the shutdown and expected to work. Nevertheless, it is not likely that the excepted employees will turn their focus to pursue these actions during the shutdown, rather than the more pressing items to which they may need to attend given their operations on limited staffing and support.

That is not to say, however, that after the shutdown, authorities may not use the Asset Forfeiture Fund to pursue forfeiture actions against marijuana businesses. To address this, Representative Ted Lieu of California, along with Rep. Earl Blumenauer of Oregon and other members, introduced a bill (H.R. 4816) to block funds from the Asset Forfeiture Fund from being used by the authorities to enforce prohibitions on marijuana.

Given these numerous concerns raised for marijuana business operators, the marijuana industry continues to monitor Congress’s actions, not only during the shutdown, but beyond, to respond and provide it with stability.