Marijuana companies operating legally according to state laws where the cultivation and sale of the drug is allowed will not face action by the Justice Department, nominee for Attorney General William Barr said in testimony to the Senate on Jan. 15. If Barr is confirmed and follows through, this would reverse a decision made by Jeff Sessions, Trump’s first attorney general.
The national affairs director of the Drug Policy Alliance, a group that favors decriminalization of drug users, said in a statement to Fortune, “Barr’s comments are a welcome development, and a break with his predecessor. He should now commit his Department to working with Congress on a solution to the state v. federal conflict, so that we can reform our outdated marijuana laws in a way that is consistent with racial justice values.”
The legal marijuana market in the U.S. was $7 billion in 2016 and has grown rapidly as additional states have changed their laws. RBC Capital Markets estimated that the market could grow to nearly $50 billion within a decade. States tax marijuana heavily: Colorado alone brought in $1 billion in tax revenue from 2014 through late 2018.
Growers welcomed the news. The CEO of Harvest, Steve White, told Fortune, “We have faith that our elected officials, including the Attorney General nominee, will fulfill their duty to represent the mandate of the American public who overwhelmingly support cannabis regulation in this country.” Harvest is ranked third in the U.S. by square footage devoted to cultivation by industry resource Growers Network.
John Lord, owner and CEO of LivWell Enlighted Health, ranked sixth largest, said, “We are happy that Mr. Barr recognizes that state-legal, regulated cannabis is not a threat, and that the Department of Justice will respect the will of the voters and the 10th Amendment in those states that have chosen to legalize cannabis.”
During the Obama Administration, the DOJ issued the Cole memorandum, named for the deputy attorney general who wrote it, telling United States Attorneys that the federal government wouldn’t enforce a drug prohibition against marijuana in states that had legalized it “in some form” and which had put systems in place to provide regulation and enforcement.
The DOJ sent the memo in 2013, and Sessions rescinded it in January 2018. But Barr said he’d uphold the doctrine stated in the memo.
“I’m not going to go after companies that have relied on Cole memorandum,” Barr said in reply to a question from Senator Cory Booker, a potential Democratic presidential candidate in 2020, who has proposed legislation that would legalize marijuana and expunge federal marijuana-related convictions.
Democratic Senator Kamala Harris, also a potential presidential candidate in 2020, pressed Barr, asking, “Are you intending to use the limited federal resources at your disposal to enforce federal marijuana laws in the states that have legalized marijuana?”
Barr replied that “to the extent that people are complying with the state laws in distribution and production and so forth, we’re not going to go after that.”
However, Barr said that Congress needed to make a decision as to whether federal law would be changed or followed, stating that the current system was akin to “a backdoor nullification of federal law.” He noted, “If we want a federal approach, if we want states to have their own laws, then let’s get there and get there in the right way.”
Barr also stated his opposition to legalization, saying he thinks it’s a mistake to “back off.”
