Cannabis industry supporters are optimistic but skeptical days after a surprise pledge from President Donald Trump that he will support state marijuana programs.
“Today, we can all rest a little easier if we’re in the industry,” said David Dinenberg, chief executive of KIND Financial, a Los Angeles software maker for cannabis businesses.
“Whether there will be real change, we still have to wait and see.”
Sen. Cory Gardner, a Republican from Colorado, on Friday announced Trump had committed to support legislation codifying state rights to legalize and regulate the cannabis industry. That position is in line with what Trump said on the campaign trail, but he’s been silent on the issue as president.
Since his inauguration, Trump has let U.S. Attorney General Jeff Sessions speak for the Trump administration about cannabis. And Sessions has been both vocal and active in his disdain for legal marijuana, undoing past Department of Justice policies that protected state cannabis rights.
Sessions’ harsh stance, combined with Trump’s tendency to surprise everyone, is why many California cannabis industry leaders say they’re taking the president’s promising pledge with a grain of salt.
Nine states, including California, have legalized recreational cannabis. And 29 states permit medical marijuana. But marijuana remains illegal under federal law, which still lists it as a Schedule I drug, on par with heroin.
Through early January, an Obama-era policy offered legal marijuana states some protection from federal prosecution. The Cole Memo, issued by Deputy Attorney General James Cole in August 2013, stopped federal officials from prosecuting individuals and businesses in legal marijuana states if they were taking certain steps to keep cannabis from getting to kids and the black market.
But on Jan. 4, just three days after California launched legal recreational marijuana sales, Sessions repealed the Cole Memo. That gave U.S. Attorneys in each state the authority to prosecute residents for marijuana crimes as they see fit.
That decision didn’t trigger raids on California marijuana stores, and evidence of a federal crackdown on state-legal cannabis businesses has not emerged. But Sessions’ move appears to have dampened the fast-growing industry, with the financial publication Green Market Report noting that an index of 30 publicly traded cannabis companies it tracks fell by nearly 22 percent in the first quarter of 2018.
When news broke that Trump had promised to support state marijuana rights, many industry leaders said they were pleasantly surprised.
“By supporting this law, President Trump has arguably done more to advance the growth of the regulated cannabis industry than any other president,” said Isaac Dietrich, founder of the cannabis-oriented social network MassRoots.
A week ago, Aaron Herzberg, a cannabis industry attorney who’s part owner of two Santa Ana dispensaries, said he wouldn’t have predicted any progress under the Trump administration in terms of narrowing the conflict between state and federal cannabis laws. He thought the industry just needed to “button down the hatches” and survive.
Now, Herzberg’s view has changed. “There’s reason to be very optimistic that we’re going to see some movement.”
The news caused an immediate bump in marijuana stocks, which rose 8.8 percent in the final hours of trading Friday.
The market was no doubt bolstered by other good news in the world of weed.
Former Republican Speaker of the House John Boehner on April 11 announced that he has changed his mind about opposing marijuana legalization — a stance he held throughout his tenure in public office. Boehner is now touting the potential of medical marijuana to help veterans.
The next day, on April 12, Senate Majority Leader Mitch McConnell, R-Kentucky, introduced a bill that would legalize industrial hemp — a variety of cannabis that can’t get anyone high but is used to make fabric, building materials, nutritional supplements and more.
“Clearly the Republicans are on the bandwagon,” Herzberg said. “Frankly, the Democrats have been underwhelming on this issue.”