by Nancy E. Brune, Ph.D.
On Thursday, January 4, 2018, U.S. Attorney General Jeff Sessions announced that he is revoking a directive, issued by the U.S. Department of Justice during President Obama’s administration, that provided guidance to federal authorities regarding the prioritization of resources used to enforce federal laws regarding the possession, distribution, and cultivation of marijuana. This policy guidance was viewed as an attempt to address the conflict between federal and state laws, particularly in states that have legalized the use of marijuana in recent years.
Many have referred to this guidance as the “Cole Memo,” suggesting that the U.S. Department of Justice issued a single memo during President Obama’s administration. However, as we elaborate below, the department, in fact, issued a series of policy memos over the span of several years.
The Ogden Memo
In 2009, following the effort in several states to legalize the use of marijuana for medical purposes, the U.S. Department of Justice’s Deputy Attorney General David W. Ogden issued a memo to all U.S. attorneys. He wrote, “The Department of Justice is committed to the enforcement of the Controlled Substances Act (CSA) in all States. Congress has determined that marijuana is a dangerous drug, and the illegal distribution and sale of marijuana is a serious crime and provides a significant source of revenue to large-scale criminal enterprises, gangs, and cartels…The Department is also committed to making efficient and rational use of its limited investigative and prosecutorial resources.”
In short, Ogden advised that prosecutors should direct their efforts toward large-scale criminal drug operations rather than on individuals whose actions were in compliance with state laws. Legal scholars have described the Ogden memo as “hands-off” policy for the federal government’s involvement in the laws of states with medical marijuana programs.
Cole Memo I
Two years later, in 2011, as the medical marijuana programs continued to grow across the country, the U.S. Department of Justice issued a second memo responding to the industry, especially the large-scale, privately owned industrial cultivation facilities that were emerging in some states. Deputy Attorney General James M. Cole wrote in a memo: “State laws or local ordinances are not a defense to civil or criminal enforcement of federal law with respect to such conduct, including enforcement of the CSA.”
Deputy Attorney General James M. Cole
Cole urged U.S. attorneys to use their discretion and consider their resources when choosing whether to pursue action against individuals or businesses engaging in marijuana. Some did choose to move forward with legal action. As noted in a UCLA Law Review article, “[F]our U.S. Attorneys in California combined forces in a concerted action against California’s medical marijuana industry. Montana’s industry was essentially shut down by law enforcement actions; and Colorado dispensaries within a thousand feet of a school were told they must either relocate or close their doors.”
Furthermore, the memo also reiterated that marijuana businesses are barred from using the U.S. banking system. Cole wrote, “Those who engage in transactions involving the proceeds of [marijuana] activity may also be in violation of Federal money laundering statutes and other Federal financial laws.” Until early 2016, under the Federal Deposit Insurance Corporation regulations and the Controlled Substances Act, any bank found to be involved in a marijuana business transaction is subject to asset seizure. In addition, major credit card companies are barred from giving accounts to marijuana businesses under the current Federal laws.
Cole Memo II
Following the legalization of recreational marijuana in Colorado and Washington, the U.S. Justice Department once again released a memo reaffirming the Federal government’s position on marijuana and offering guidelines for the U.S. attorneys dealing with marijuana in their jurisdictions. The memo stated that the U.S. government’s interests in pursuing marijuana-related cases are as follows:
- Preventing the sale of marijuana to minors.
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels.
- Preventing the diversion of marijuana from states where it is legal under state law in some other form to other states.
- Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity.
- Preventing violence and the use of firearms in the cultivation and distribution of marijuana.
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use.
- Preventing the growth of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands.
- Preventing marijuana possession or use on federal property.
The Federal government, however, has not involved itself in lower level drug crime or possession, leaving the enforcement and prosecution up to state and local law enforcement. This position will not change, provided “states and local governments that have enacted laws authorizing marijuana-related conduct will implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health and other law enforcement interests.”
Prosecutors were still expected to review each marijuana case on a case-by-case basis to determine whether the operation is “demonstrably in compliance with a strong and effective state regulatory system” and whether its fiscal operation are in compliance with federal regulations.
Cole Memo III
In 2014, Deputy Attorney General Cole followed up with two additional memos that provided clarification on the Justice Department’s position on state marijuana laws. The first memo, published in February, stated that financial institutions are allowed to begin accepting business from marijuana companies but are expected to closely monitor the actions of the companies for any illegal activity. That same year, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) released guidelines for the banking industry to work with marijuana businesses in the states where it has been legalized, provided the banks closely monitored those customers.
(This information was originally published in the Guinn Center’s “Clearing the Weeds: Fact Sheet on Question 2 Initiative to Regulate and Tax Marijuana” (September 2016). See here: https://guinncenter.org/wp-content/uploads/2014/01/Guinn-Center-Fact-Sheet-Q2.pdf).