Life After Melinda Haag

The feds are at the crossroads, the industry is emboldened, and 2016 election limbo begins.

Medical marijuana’s public enemy number one in the Bay Area — US Attorney Melinda Haag — will exit stage-left in September, brightening the future for local business owners and patients, but also increasing the haze.

Haag’s exit ushers in a period of legal limbo for Northern California. Locals will not know who their next permanent US Attorney will be until some time after the fall 2016 presidential election, when the next president nominates him or her. “The bigger question is not, ‘Who replaces Melinda Haag?’ it’s ‘Who replaces Barack Obama?'” said Dan Riffle, a Marijuana Policy Project lobbyist in Washington, DC.

Until then, Brian Stretch, acting US attorney for the Northern District of California, has to contend with mixed signals from his bosses in the nation’s capital as he decides what to do with a couple troubled, high-profile forfeiture cases against two of the industry’s best actors — Berkeley Patients Group and Harborside Health Center in Oakland. In December, Congress told Stretch’s superiors at the Department of Justice not to spend federal money undermining state medical marijuana laws (the Rohrabacher-Farr amendment). And the most recent memo from DOJ Deputy Attorney General James Cole tells prosecutors to focus on armed, interstate drug traffickers dealing to gangs and kids — not licensed dispensaries that check ID and only admit qualified patients.

However, the DOJ’s own lawyers told Stretch in a recently leaked memo from February that the medical pot industry remains fair game, despite Congress’ new rule. Congressmembers are calling for a federal investigation, and Congressional support for taking a hands-off approach to states that have legalized cannabis for medical or recreational use has grown since December. Rohrabacher-Farr is likely to be extended this year, Riffle said.

There are also a dozen other bills pending in the Republican-controlled Congress to “protect state’s rights” with regard medical or adult-use pot policies. Nearly 80 percent of Americans support access to medical.

Other signals include:

• The head of the Drug Enforcement Administration said this month for the first time that marijuana was less dangerous than heroin. “It may not seem like much to rational people. … But for the DEA to admit that is a fairly big deal,” said Riffle.

• The head of the National Institute on Drug Abuse said this month for the first time that the marijuana molecule cannabidiol (CBD) shouldn’t be considered a dangerous drug, let alone one of the most dangerous. NIDA’s head admitted that CBD can stop seizures. “All those sorts of things are part of the small, glacial change of pace that we see,” Riffle said.

Haag’s old forfeiture cases are also sailing into increasingly foggy legal waters. Both forfeiture actions are stayed pending the outcome of federal appeals by the cities of Oakland and Berkeley. And federal judges have begun to openly wonder if Rohrabacher-Farr applies to federal forfeitures against licensed dispensaries such as BPG.

If the cities lose in the Ninth Circuit, they can appeal to the US Supreme Court. That could take years. The dispensaries could also try to raise the Rohrabacher-Farr defense in court. “That could be a big, showdown argument,” said Henry Wykowski, attorney for Harborside, and a former federal prosecutor.

Winding down the forfeitures and moving on is best, though, Wykowski said. “He could justify getting rid of the cases, if he wanted,” Wykowski added, referring to Stretch.

The possibility of Stretch filing new forfeiture cases isn’t politically palatable, either, Riffle added. The DOJ “sees the poll numbers, just like politicians do,” Riffle noted. “They know what’s politically toxic for them and gets bad headlines for the administration and the agency. Washington, DC has been sending strong, overt signals, ‘Do not focus on marijuana, there’s better ways to spend money.’ … I don’t think you can do much worse than Melinda Haag, in terms of wasting resources and following guidelines from Washington.”

Local Focus

The industry may be singing “ding dong the witch is dead” at cocktail parties, but operators actually have much more to fear at the state and local level than at the federal one, notes Sean Donahoe, an industry consultant based in Oakland. The reason is that the vast majority of dispensary raids and arrests are locally driven. Growers are more likely to run afoul of county bans, code enforcement, and state wildlife agencies, than the DEA. “Sheriffs are huge,” noted Donahoe.

Medical regulations pending this fall in Sacramento likely will cull the industry like Haag never could. And voters will almost certainly decide on at least one industry-shaping legalization measure in fall 2016 — maybe several. With Haag on the way out, the advice for operators seems to be “stay the course, don’t catch a case, and if you do, drag it out as best you can. Your legal position improves every day.”

“Keep a low profile,” said Wykowski. “The trick is to make it to 2016, and chances are two things are going to happen: they legalize adult use and probably grandfather in everyone that’s open.”


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