Pot: Unanticipated Fallout

It’s not known what the new government will do about marijuana in legal states, which is problematic.

The states continue to operate their marijuana programs under cover from the Cole Memo from the DOJ. Basically, if the states fully regulate the industry according to several basic principles, they’ll be allowed to continue their “experiments”. Washington and Colorado have fully-compliant systems up and running, and seem satisfied with the results so far. Oregon is almost completely up with it’s program, Alaska is just now coming online.

Not all of the Oregon growers are folded into the regulated system yet; some in SW Oregon are suspicious, wary, of just how far the state will go to protect them from the feds. Perhaps it’s better to stay deep in the woods and out-of-sight. That’s been the successful technique for 40 years, and if things look dicey in DC, many in Oregon may choose to take their chances in the underground market which is consistent.

California does not have a program that complies with the Cole Memo, neither medical nor recreational. Consequently everyone in CA associated with the marijuana business is at risk for enforcement from the DEA. CA does have a medical program due to be implemented in January 2018, and Prop 64 implements a retail system at the same time. Both will be compliant, but they don’t exist yet.

Given that the growers in Northern California aren’t exactly sold on this regulation stuff (an understatement), suspicion and doubt about what goes on in DC might be a good reason to keep hidden, and not cooperate with the state’s programs. Getting buy-in from the vast majority (90%) of the industry is critical to showing compliance and defense against the DEA.

So now the regulators in CA are faced with questions concerning federal law, and faced with hard questions from the industry. We frequently hear of the incestuous relationships between regulators and the industry they regulate, but it always works best when the two sides cooperate. It’s very possible that the Northern California growers and the California regulators will be on the same side if the feds decide to enforce their laws.

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