January 16, 2018

Cannabis enforcement threat may result in bigger returns, CCC chair says

File photo

The abrupt change in the federal government's approach to marijuana law enforcement means investors in the state-sanctioned Massachusetts pot market could see bigger returns on their investments, according to the state's chief regulator.

While saying he has limited resources to fight illegal activity, U.S. Attorney for Massachusetts Andrew Lelling threw a curveball into the market this month when he noted cultivation, distribution and possession is an unambiguous federal crime and said he can't assure immunity to anyone involved in the state-level marijuana trade. State officials balked, noting state voters approved marijuana legalization, but Lelling said its "a straightforward rule of law issue."

"It's a different calculation. There's no question about it," Steven Hoffman, chairman of the Cannabis Control Commission, told WGBH's "Greater Boston" during a Jan. 9 appearance. "There's a different calculation in terms of what the risks are, no question. But there's also a different calculation in terms of what the returns are because fewer people potentially will enter the business, therefore the potential returns are greater."

The greater returns could come with criminal entanglements, though. Hoffman acknowledged he can't guarantee federal law enforcers won't target investors in planned marijuana dispensaries or banks that want to accept dispensary deposits. He also said he has not reached out to Lelling's office.

Most of the state's medical marijuana dispensaries have already reverted to cash-only operations in the wake of U.S. Attorney General Jeff Sessions' Jan. 4 revocation of an Obama-era policy, outlined in the so-called Cole Memorandum, that directed federal prosecutors to essentially look the other way in states that have established regulated markets for legal marijuana.

During his appearance, WGBH played a clip of President Donald Trump speaking at an October 2015 campaign event in Nevada prior to his election in 2016.

"The marijuana thing, it's such a big thing," Trump said at the event. "I think medical should happen. Right, don't we agree? I mean I think so. And then I really believe you should leave it up to the states. It should be a state situation."

But Hoffman said he was not surprised by the shift in federal policy because of Sessions' prior statements about marijuana. Sessions, who Trump picked to serve as U.S. attorney general, was a U.S. senator prior to that and has long expressed anti-marijuana viewpoints.

"I just know what Sessions has said in the past about this drug and therefore it didn't surprise me that he came out with his statement rescinding the Cole Memorandum," said Hoffman.

While acknowledging the new threat to the market, Hoffman said the commission is forging ahead with regulations which will likely allow, among other things, for home delivery of marijuana and store openings on July 1, 2018. He expects applications will be accepted starting April 1.

"We're going to do everything we can to make it safe and legal and accessible in the state," said Hoffman.

Hoffman added, "My brother-in-law sent me a text after Sessions' announcement last week and he said, 'You have the most interesting job in the world.'"

"I think your brother-in-law knows what he's talking about," responded host Jim Braude.

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