December 13, 2013 | SteveElliott
Repealing state penalties for growing, possessing, and selling marijuana does not create a “positive conflict,” deputy attorney general says.
Deputy Attorney General James Cole admitted on November 10 that the U.S. Justice Department doesn’t have a viable legal challenge. “It would be a very challenging lawsuit to bring,” Cole said while testifying at the first Congressional hearing on cannabis legalization in the two states.
Cole said that repealing state penalties for growing, possessing, and selling marijuana does not create a “positive conflict” with the Uniform Controlled Substances Act.
He argued that the feds would be on firmer legal ground if they tried to preempt state licensing and regulation of cannabis businesses which are newly legal under state law. But the deputy attorney general said that approach would mean that if such litigation were successful, it would leave the industry unregulated.
That’s why the Department of Justice decided on the approach summarized in the memo Cole issued on August 29, limiting federal enforcement to cases that involve eight “federal concerns,” including sales to minors, drugged driving, and diversion of marijuana to other states.
“As long as they are not violating any of the eight federal priorities, the federal government is not going to prosecute them,” Cole said. However, “Nothing herein precludes investigation or prosecution, even in the absence of any one of the factors listed above, in particular circumstances where investigation and prosecution otherwise serves an important federal interest.”
Cole claimed that “catch-all” is “not meant to swallow the entire memo,” but the fact is, federal prosecutors still have the leeway to prosecute almost anyone whom they wish, even in legal states. Of additional concern is the fact that several U.S. Attorneys in legal medical or recreational marijuana states have already said the new directive will have no effect on who they prosecute.
Cole said the DOJ is working with federal banking regulators to address banks’ fear of working with pot businesses, which are forced to operate on a cash-only basis because financial institutions don’t want to incur federal wrath by accepting their deposits.
“We agree it is an issue we need to deal with,” Cole said in response to a question from Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.). “There is a public safety concern when businesses have a lot of cash lying around.”
Cole denied that the Drug Enforcement Administration had warned armored-car services not to do business with cannabis sellers. “DEA was merely asking questions of the armored car companies as to what their practices are,” Cole claimed.
The deputy attorney general said the inability of marijuana businesses to deduct expenses on federal tax returns would have to be fixed by Congress through legislation.