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WASHINGTON, DC – DECEMBER 15: U.S. Attorney General Jeff Sessions holds a news conference at the Department of Justice on December 15, 2017 in Washington, DC. Sessions called the question-and-answer session with reporters to highlight his department’s fight to reduce violent crime. (Photo by Chip Somodevilla/Getty Images)

The one-page Marijuana Enforcement Memorandum issued by Attorney General Jeff Sessions has created uncertainty as to whether federal prosecutors now will prosecute marijuana-related businesses in the states where medical or recreational marijuana sales presently are legal under state law.

Whether we soon actually will see federal enforcement will be the individual decisions of 93 United States Attorneys around the country. No sooner did the Attorney General alter more than seven years of guidance that had provided a perception of protection to marijuana-related businesses than one U.S. Attorney said he would pursue business as usual and another said the industry would be fair game for prosecution.

I don’t expect federal prosecutors to rush into widespread prosecutions because of significant other policy enforcement priorities and resources. If federal prosecutors were to do so, and the “prosecuted” are in compliance with state law, then we will see constitutional challenges to the prosecutions.

Nonetheless, the fundamental fact remains that under federal law, marijuana-related business objectively is a criminal offense, and the purveyors of marijuana put at risk their property and freedom merely by their participation in these businesses.

I offer three general recommendations for industry participants. They are establish or enhance your compliance program, improve documentation, and monitor closely statements of local federal prosecutors to determine their likely enforcement postures. These recommendations are worth heeding outside the cannabis industry too.

The first, rooted in the Principles of Federal Prosecutions of Business Organizations adopted and followed by DOJ, is, regardless of industry segment, industry participants should review with competent counsel all elements of their company compliance programs.  To be clear, compliance programs offer no guarantees, particularly where the marijuana-related businesses by definition presumptively violate federal law.  Nevertheless, a company’s ability to demonstrate its efforts to work within the framework of applicable and governing state laws may prove persuasive for the lawyer advocating for the marijuana-related business.

The second is don’t cut corners and do tighten up documentation. Doing so is consistent with wise business practices in all young and emerging industries, as well as those in which aggressive enforcement impacts the compliance landscape.  Business principals, to …read more