The Relevance of the “Size or Commercial Nature” of a Marijuana Business

I agree with Ilya that DOJ’s new marijuana federalism memo leaves a lot to be desired, but there was point in it that I was pleased (and surprised) to see. The 2011 Cole memo about medical marijuana spoke very disparagingly about large, profitable operations:

The Department’s view of the efficient use of limited federal resources as articulated in the Ogden Memorandum has not changed. There has, however, been an increase in the scope of commercial cultivation, sale, distribution and use of marijuana for purported medical purposes. For example, within the past 12 months, several jurisdictions have considered or enacted legislation to authorize multiple large-scale, privately-operated industrial marijuana cultivation centers. Some of these planned facilities have revenue projections of millions of dollars based on the planned cultivation of tens of thousands of cannabis plants.

The Ogden Memorandum was never intended to shield such activities from federal enforcement action and prosecution, even where those activities purport to comply with state law.

The new 2013 Cole memo, while not fully retracting this statement, takes a markedly different tone:

The Department’s previous memoranda specifically addressed the exercise of prosecutorial discretion in states with laws authorizing marijuana cultivation and distribution for medical use. In those contexts, the Department advised that it likely was not an efficient use of federal resources to focus enforcement efforts on seriously ill individuals, or on their individual caregivers. In doing so, the previous guidance drew a distinction between the seriously ill and their caregivers, on the one hand, and large-scale, for-profit commercial enterprises, on the other, and advised that the latter continued to be appropriate targets for federal enforcement and prosecution. In drawing this distinction the Department relied on the common-sense judgment that the size of a marijuana operation was a reasonably proxy for assessing whether marijuana trafficking implicates the federal enforcement priorities set forth above.

As explained above, however, both the existence of a strong and effective state regulatory system, and an operation’s compliance with such a system, may allay the threat that an operation’s size poses to federal enforcement interests. Accordingly, in exercising prosecutorial discretion, prosecutors should not consider the size or commercial nature of a marijuana operation alone as a proxy for assessing whether marijuana trafficking implicates the Department’s enforcement priorities listed above. Rather prosecutors should continue to review marijuana cases on a case-by-case basis and weigh all available information and evidence, including but not limited, whether the operation is demonstrably in compliance with a strong and effective state regulatory system.

If this does indeed represent an increase in tolerance of large or commercial enterprises that are lawful in their state, that would be a welcome change. Economies of scale and profits are not a bad thing, even in the marijuana business; they are a form of economic growth.

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