The outgoing U.S. Attorney for Southern California and her replacement remained mum Thursday on whether they would pursue prosecutions of recreational marijuana businesses now that Attorney General Jeff Sessions has lifted Obama-era restrictions on such enforcement. Some in the L.A. marijuana industry were defiant, while one investor group said the change could scare away potential entrepreneurs.
Sandra Brown, the outgoing U.S. Attorney for the Central District of California, which includes Los Angeles, Orange and five other counties, and Nicola Hanna, who begins his job as interim U.S. Attorney on Friday, declined to comment on the new policy.
In a one-page memo Thursday, Sessions said federal prosecutors are once again free to devote resources to marijuana cases as they see fit. In deciding which cases to prosecute, he said U.S. Attorneys should consider "enforcement priorities set by the Attorney General, the seriousness of the crime, the deterrent effect of criminal prosecution and the cumulative impact of particular crimes on the community."
Sessions overturned a policy established by a 2013 memo written by then-Deputy Attorney General James M. Cole. It said the federal government would not stand in the way of states that legalize marijuana, so long as officials acted to keep it from migrating to places where it remained outlawed and kept it out of the hands of criminal gangs and children.
Sessions has been a fierce supporter of the federal ban on marijuana. That leaves Hanna in a difficult position, given California’s overwhelming support of legalization, said Loyola Law School Professor Stan Goldman.
"There may be a bit of a tightrope to walk for U.S. attorneys who are only temporary," he said.
Politics should not play a role in Hanna’s decision whether to prosecute marijuana cases, said Robert Bonner, former U.S. Attorney for California's Central District.
"That's totally inappropriate - no, you do not consider what the politics of this are," said Bonner, who is also a former federal judge and once headed the U.S. Drug Enforcement Administration.
It’s more likely Hanna will have to consider the resources of his office of about 240 prosecutors, who must handle both criminal and civil cases in seven counties that have a population of 18 million, Bonner said. It’s the most populous federal district in the country and it deals with everything from national security prosecutions to gang crimes to the opioid crisis.
"You have to say what are the most important cases to prosecute, Bonner said. "The U.S. attorney’s office has limited resources."
"Jeff Sessions' appetite may be bigger than what he’s capable of actually doing," said Goldman, adding that the attorney general may be trying to deter marijuana activity more than anything else.
"It may all be a potential attempt to scare away bankers and financiers," he said.
So far, Southern California’s pot industry is taking Sessions’ action in stride.
Inside the West Hollywood dispensary Alternative Herbal Health Services, plenty of customers were lining up to buy cannabis Thursday. Shop owner Jason Beck said Sessions' position is not a surprise.
"Jeff Sessions has been saying this ever since he's been attorney general," said Beck. "This is nothing new with his messaging."
Beck said keeping his business running normally is the best way he knows to protest the attorney general's move.
Other local entrepreneurs said in interviews that they think widespread prosecutions are unlikely. They were also cautiously optimistic that California's pot industry will continue to grow.
"While our members are aware of the news from Washington, we feel confident that cannabis businesses will proceed as usual in Lynwood and we expect to have a successful year as we open for business," said the Lynwood Cannabis Association’s Tony Torres.
One marijuana industry venture capital group said the change could have some chilling effects.
"People who have been on the fence or who are very recent entrants may retreat a bit, valuations may drop, banking might become more difficult," Troy Dayton, CEO of Oakland-based The Arcview Group, said in an email. "But because the underlying fundamentals remain strong, this is a signal to other investors that there are phenomenal deals to be had."
This latest showdown over marijuana highlights the importance of resolving the conflict between federal and state laws, said former U.S. Attorney Bonner.
"We need to get out of this limbo situation we are in," he said.