What Trump’s New AG Means For The Cannabis Industry

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Ex U.S. Attorney General Jeff Sessions Photo: Shutterstock

Tuesday’s election will have major short and long-term effects on marijuana policy. In the immediate sense, Michigan became the 10th state to legalize marijuana for adults, while successful ballot measures in Missouri and Utah brings the total number of states with medical marijuana laws on the books to 33. Numerous pro-legalization candidates were also elected to governorships and to Congress, and the two most anti-marijuana Representatives will not be returning to the House in 2019.

But one of the biggest changes – and perhaps the one with the most significant long-term impacts for the entire industry – came the day after the election, when U.S. Attorney General Jeff Sessions resigned at the request of President Trump.

With Sessions gone, the table has been cleared for Trump to select a new Attorney General – that could be either very good or very bad for the cannabis industry. Despite the uncertainty, however, there’s still reason to be hopeful.

Not surprisingly, given Sessions’ outspoken and outdated prohibitionist views, (he infamously said that “Good people don’t smoke marijuana”), cannabis stocks immediately rallied late on Wednesday as investors saw his ouster as a good sign for the industry. However, most cannabis stocks had fallen back to prior levels by the time markets closed on Thursday as investors likely realized that sometimes you’re better off with the devil you know than the one you don’t.

But investors were right to see this as a good sign. While in office, Sessions tried his best to roll back progress on marijuana reform, including revoking the Cole Memo that had restrained the Department of Justice from interfering in states’ marijuana programs. Luckily, that was the worst Sessions was able to do, as his conflict with President Trump over the Mueller investigation made him much less effective. While Trump publicly disagreed with Sessions on marijuana policy, saying states should be able to set their own policies, their disagreement over the Russia investigation was seemingly the impetus for Sessions’ firing.

The next Attorney General will inevitably play a major role in the U.S. cannabis industry. So what may the future hold?

With Sessions gone, Trump tapped Matthew Whitaker, Sessions’ former chief of staff, to assume the role temporarily until a permanent Attorney General is nominated and confirmed by the Senate. Since Republicans still control the Senate, whoever Trump nominates will likely have an easy path to confirmation. But since that’s no sure thing – and since Trump could end up appointing Whitaker for the permanent spot – it’s worth looking into how Attorney General Whitaker might view cannabis.

Marijuana Moment did some preliminary digging into Whitaker’s background, and found a mixed record on the issue. While running in the Republican primary for U.S. Senate in Iowa, Whitaker praised the state’s CBD-only medical marijuana law and said he knew people it would help – but he then proceeded to criticize Obama’s DOJ for declining to prosecute violations of federal law in states that had legalized marijuana. It’s unclear which sentiment would win out if Whitaker actually had to decide whether to intervene in state marijuana programs. Hopefully, his attacks on the Cole Memo were just an opportunity to attack President Obama in a Republican primary, rather than a deep-seated opposition to states’ rights.

If Trump decides to appoint someone other than Whitaker to serve as the permanent Attorney General, it could be either very good or very bad for marijuana reform.

While a majority of Republican voters now support regulating marijuana like alcohol, the issue is much less popular among the party’s establishment. While some members support the states’ rights approach to marijuana, there are still many die-hard prohibitionists among prominent potential GOP candidates.

The worst-case scenario would be President Trump nominating a prohibitionist who, unlike Sessions, is willing to follow Trump’s lead on the Mueller investigation. Since Trump does not appear to consider marijuana policy a high priority, it’s easy to imagine him striking a bargain where the new Attorney General pledges to defend Trump from Mueller in exchange for independence on policy issues they disagree on.

This role could be filled by someone like former New Jersey Governor Chris Christie, a long-time opponent of marijuana reform and an endorser of Trump in 2016. A former prosecutor, Christie was considered as an option for Attorney General before Trump selected Sessions, and is already making headlines as a potential replacement. In this scenario, an Attorney General Christie would create more uncertainty that would likely have adverse impacts on state-legal cannabis businesses and could dampen investor interest.

The best-case scenario is one in which President Trump identifies marijuana legalization as a winning issue with broad popular support, and nominates a pro-legalization Attorney General to capitalize on that. I’ve previously written about how Trump could take up the mantle of legalization, seizing an issue that should have been an easy win for Democrats if their leadership hadn’t failed to act on it when they were in power. This could position Trump very well for the 2020 election, since legalization is supported overwhelmingly by young people – a group that Democrats are relying on to take back the presidency. Marijuana reform has also passed by wide margins in swing states like Florida and Michigan.

One person who could fill this role would be Senator Lindsey Graham (R-SC). While he isn’t among the most vocal supporters of sweeping marijuana reform, Graham did sign on as a sponsor for the CARERS Act of 2015, which would have legalized medical marijuana federally. He has also been a key ally to President Trump, and South Carolina’s Republican governor means that a Republican could be appointed to finish out his Senate term if he left early. Graham has even said that Trump once offered him the job as Attorney General while they were golfing together. Though Graham claims that Trump was joking and that he would never want the job, refusals in Washington are rarely final, and it’s possible that Graham could accept under the right conditions.

Regardless of who winds up as America’s next top prosecutor, there is a reason to be optimistic. While we may never know why the Justice Department wasn’t more aggressive in cracking down on state-legal marijuana businesses under arch-prohibitionist Jeff Sessions, it likely had to do with political considerations by individual U.S. Attorneys. While the Attorney General does have the ability to set prosecutorial priorities, he or she technically does not have the ability to tell U.S. Attorneys which cases to pursue.

While U.S. Attorneys are not elected officials themselves, it is arguably the largest springboard to higher elected office in the country. In fact, perennial Attorney General candidates Chris Christie and Rudy Giuliani both kicked off their elected political careers after serving as U.S. Attorneys themselves. These on-the-ground prosecutors are generally appointed to serve in the states in which they live, and where they would run for future office. Cracking down on businesses that have been licensed by state agencies, under programs voted in by the citizens of that state, and which have only become more popular over time, would hardly be a way to endear themselves to the same voters whose support they would need to become a future congressperson, senator, mayor, or governor.

Of course, it’s impossible to tell which one of these paths President Trump will take, and there are many factors other than marijuana policy at play here. But with marijuana now legal in 10 states, represented by 20 senators – including Republicans like Collins (R-ME), Gardner (R-CO), Murkowski (R-AK), and Sullivan (R-AK) – this is an issue that isn’t going away, and President Trump would be wise to consider it when choosing his next Attorney General. Otherwise, Republicans run the risk of allowing Democrats to become the party of marijuana legalization, and giving Canadian companies a major head-start in the meantime.

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