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Legal pot industry faces crackdown from Sessions

Some lawmakers fight to defend states’ rights

In last year's elections, eight states, including Arkansas, legalized marijuana for medical or recreational use. But the growing industry is facing a federal crackdown under Attorney General Jeff Sessions, who has compared cannabis to heroin.

A task force that Sessions appointed to, in part, review links between violent crimes and marijuana is scheduled to release its findings by the end of the month. But he has already asked Senate leaders to roll back rules that block the Justice Department from bypassing state laws to enforce a federal ban on medical marijuana.

That has pitted the attorney general against members of Congress across the political spectrum -- including Sens. Rand Paul, R-Ky., and Cory Booker, D-N.J. -- who are determined to defend states' rights and provide some certainty for the multibillion-dollar marijuana industry.

"Our attorney general is giving everyone whiplash by trying to take us back to the 1960s," said Rep. Jared Huffman, D-Calif., whose district includes the so-called Emerald Triangle that produces much of the United States' marijuana.

[MARIJUANA: Map and charts of marijuana laws by state ]

"Prosecutorial discretion is everything given the current conflict between the federal law and the law of many states," he said last month.

In February, White House spokesman Sean Spicer said President Donald Trump's administration would look into enforcing federal law against recreational marijuana businesses. Some states are considering tougher stands. In Massachusetts, for example, the Legislature is trying to rewrite a law legalizing recreational marijuana, which voters passed in November.

About 20 percent of Americans now live in states where marijuana is legal for recreational use, according to the Brookings Institution, and an estimated 200 million live in places where medicinal marijuana is legal. Cannabis retailing has moved from street corners to state-of-the-art dispensaries and stores.

Sessions is backed by Americans who view cannabis as a "gateway" drug that drives social problems, such as the recent rise in opioid addiction.

"We love Jeff Sessions' position on marijuana because he is thinking about it clearly," said Scott Chipman, Southern California chairman for Citizens Against Legalizing Marijuana.

Marijuana merchants are protected by a provision in the federal budget that prohibits the Justice Department from spending money to block state laws that allow medicinal cannabis. Under the administration of former President Barack Obama, the Justice Department did not interfere with state laws that legalize marijuana and instead focused on prosecuting drug cartels and the transport of the drug across state lines.

In March, a group of senators that included Elizabeth Warren, D-Mass., and Lisa Murkowski, R-Alaska, asked Sessions to stick with existing policies. Some lawmakers also want to allow tax deductions for business expenses and to permit banks to work with the marijuana industry.

Lawmakers who support legalizing marijuana contend that it leads to greater regulation, curbs the black market and stops money laundering. They point to studies showing that the war on drugs, which began under President Richard Nixon, had disastrous effects on national incarceration rates and racial divides.

In a statement, Booker said the Trump administration's crackdown against marijuana "will not make our communities safer or reduce the use of illegal drugs."

"Instead, they will worsen an already broken system," he said, noting that marijuana-related arrests are disproportionately high for black Americans.

Consumers spent $5.9 billion on legal cannabis in the United States last year, according to the Arcview Group, which studies and invests in the industry. That figure is expected to reach $19 billion by 2021.

But marijuana businesses are bracing for a possible clampdown.

"People that were sort of on the fence -- a family office, a high-net-worth individual thinking of privately financing a licensed opportunity -- it has swayed them to go the other way and think: not just yet," said Randy Maslow, a founder of iAnthus Capital Holdings. The public company raises money in Canada, where Prime Minister Justin Trudeau campaigned on a promise to legalize recreational use of marijuana.

Rep. Earl Blumenauer, D-Ore., a co-chairman of the Congressional Cannabis Caucus, is urging marijuana businesses not to be "unduly concerned."

"We have watched where the politicians have consistently failed to be able to fashion rational policy and show a little backbone," he said. "This issue has been driven by the people."

A Section on 07/16/2017

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