Federal Directive Complicates Legal Marijuana In Massachusetts

Photo Credit: Seth Perlman

The Bay State’s fledgling marijuana trade has come face-to-face with U.S. Attorney General Jeff Sessions’ decision to rescind Obama-era guidelines that had removed marijuana as a priority of federal drug enforcement.

The rollback of the so-called Cole memo allows local U.S. attorneys to use their discretion in enforcing federal law.

This has put a chill on, but not deterred, the state’s growing medical and recreational cannabis industry, some advocates say.

Bay State residents voted to legalize medical marijuana in 2012, and recreational adult use in 2016. The Massachusetts Medical Use of Marijuana Program’s website states there are 19 registered medical dispensaries “open for sales” with 45,505 active patients as of Dec. 31. One of them is located in Salem.

One short-term result of Sessions’ new policy was immediate but temporary — some medical marijuana dispensaries, including one in Georgetown, were temporarily unable to process patients’ debit card transactions, because a vendor stopped processing them. The return to cash-only lasted only a few days as Bay State leaders came out in support of the industry.

“I am less concerned than most,” said attorney James Smith, a Swampscott resident and former state representative who serves as legal counsel to more than a dozen marijuana companies in Massachusetts.

On the North Shore, Smith represents Old World Remedies of Marblehead, which is proposing to open a dispensary in Lynn, and Phytotherapy Inc., which was one of three medical marijuana companies for which the Peabody City Council voted to issue letters of non-opposition in November.

To those who are committed to the state’s marijuana industry, “the business is just moving along,” Smith said.

North Shore hothouse

The North Shore has become a hothouse for the fledgling industry, with several outfits vying to open medical dispensaries even as the Bay State anticipates recreational sales this summer.

Salem was the first city in Massachusetts to have a registered medical marijuana dispensary when Newburyport-based Alternative Therapies Group opened one on Grove Street in June 2015. Salem also has a state-of-the-art medical marijuana testing laboratory downtown.

Other facilities have been proposed throughout the area.

Alternative Therapies Group, which has a grow site in Amesbury, is pursuing plans in Haverhill and Salisbury about setting up a medical marijuana dispensary in each community.

In Ipswich, Old Planters of Cape Ann is proposing a facility at 59 Turnpike Road (Route 1), according to its website. An outfit called Ipswich Pharmaceutical Associates also plans for a similar facility just down the road.

Danvers has given the go-ahead to an outfit called Sanctuary Medicinals for a new medical dispensary in the Danvers Industrial Park just off Route 1 southbound. It is expected to open sometime this year. The company is also one of the three simultaneously looking to set up shop on Route 1 in Peabody.

And in Gloucester, Happy Valley Ventures plans to open a dispensary and a growing and production facility in the Blackburn Industrial Park. The company has revised and expanded its plans, so it has to seek permission again from city officials.

The outlook for recreational marijuana stores is more mixed. Danvers Town Meeting recently voted to ban recreational pot facilities. Peabody and Beverly have placed temporary bans on them, too. Meanwhile, Salem is mulling new zoning rules to allow recreational marijuana shops in the city.

In North Andover, there are plans for a massive 1.1 million square-foot marijuana cultivation and research facility in the former Lucent Technologies/Western Electric plant on Osgood Street (Route 125).

“We are confident in the commonwealth’s resolve to protect our state’s rights and the will of its voters,” said property owner Jeff Goldstein in a statement affirming that the policy change does not impact development plans, which North Andover is set to vote on in a Special Town Meeting later this month.

No one’s immune

On Jan. 8, the state’s marijuana trade was put on notice when the new U.S. Attorney for Massachusetts, Andrew Lelling, issued a statement regarding federal marijuana enforcement.

“I cannot, however, provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution,” he said, adding that he would “proceed on a case-by-case basis,” and assess how best to use “limited federal resources.”

A few days after Lelling’s comments, the nonprofit Massachusetts Patient Advocacy Alliance held a rally outside the federal courthouse in South Boston.

“What happened last week was a knee-jerk reaction,” said Nichole Snow, a Salem resident and executive director of the coalition that helped legalize medical marijuana in 2012 and that advocates for patients’ rights.

After the initial chill, including the temporary shutdown of debit card processing at some dispensaries, Snow said an overwhelming response from state leaders and law enforcement helped. Snow was grateful for Gov. Charlie Baker’s remarks that it would be better to focus limited federal resources on street drugs like fentanyl amid the opioid crisis. Baker did favor legalizing recreational marijuana in 2016.

“Let’s focus on the stuff right now that’s wreaking havoc across our commonwealth,” Baker said recently. “I recognize and understand the voters in Massachusetts voted to create a legal, regulated, recreational marijuana market here in the commonwealth.”

Snow does not foresee a long-term impact. The state’s cannabis industry is well-regulated and has gotten off to a good start, she said.

But not everyone is so optimistic.

“It’s scary for businesses and traditional investors,” said Michael Latulippe, development director of the Massachusetts Patient Advocacy Alliance. Some mainstream businesses could become fearful about taking money from dispensaries for fear of running afoul of federal drug laws, he said.

Dispensaries have protection under the federal Rohrabacher-Blumenauer amendment, which blocks the Justice Department from spending money to prevent states from implementing medical marijuana laws. This protection could expire, however, if it is not reauthorized as part of a new federal budget deal.

Congressman Seth Moulton of Salem supports legislation to protect state marijuana laws, and co-sponsored a bill called the Respect State Marijuana Laws Act of 2017.

“Voters in my state made a decision to be proactive and move forward to recognize that a prohibition isn’t going to make marijuana go away,” he said. “We need to regulate it to make it safer.”