Federal Marijuana Crackdown Could Disrupt Budding Industry

UPDATED: January 17, 2018 at 1:52 a.m.

Attorney General Jeff B. Session’s decision to more stringently enforce federal marijuana laws earlier this month renders the future of marijuana businesses in Cambridge hazy, local business owners and legislators say.

Sessions issued guidance to United States attorneys last week opening the door for the prosecution of local commercial and medical marijuana businesses, rescinding an Obama-era policy of avoiding prosecution in states where marijuana is legal. Session’s decision comes roughly a year after Massachusetts gave the drug the green light for recreational use—and just days after the first-ever medical marijuana dispensary opened in Harvard Square.

Nathaniel L. Averill, CEO of the new dispensary, Healthy Pharms Inc., said he feels tentatively optimistic for the future of his business as he monitors the developments surrounding Session’s new memorandum.

“For sure we’re concerned,” he said. “But we also think that the state and the people are behind us.”

In a Jan. 4 memorandum sent to all U.S. attorneys, Sessions called on them to enforce the laws enacted by Congress, which have determined that “marijuana is a dangerous drug and that marijuana activity is a serious crime.” The memo announced that “previous nationwide guidance specific to marijuana enforcement is unnecessary and is rescinded, effective immediately.”

Marijuana remains an illegal substance under federal law despite its recreational legalization in eight states, including Massachusetts, and legalization for medical use in over 25 states. Andrew E. Lelling, the U.S. attorney for Massachusetts, told politicians and businessmen in an official statement Monday that he may begin enforcing federal laws more harshly following Session’s new guidance.

“I understand that there are people and groups looking for additional guidance from this office about its approach to enforcing federal laws criminalizing marijuana cultivation and trafficking,” Lelling wrote in the statement. “I cannot, however, provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.”

Jillian Fennimore, director of communications for Mass. Attorney General Maura T. Healey ’92, wrote in a statement that Healey’s office “ is committed to helping implement legalization effectively and as safely as possible.” Fennimore called on Lelling to make his enforcement priorities clear and to provide guidance to Massachusetts locals, businesses, and municipalities.

According to the Boston Globe, a congressional budget rider currently prevents the use of Department of Justice funding for prosecuting most state-licensed marijuana businesses, but that amendment expires next month and may not be added to the next federal budget.

The new enforcement guidelines have the potential to disrupt a budding industry in Massachusetts. Florida’s Merchant Services Consulting Group, Inc., a payment company that services the majority of medical marijuana dispensaries in the state, pulled out of Massachusetts after Sessions’s comments, forcing many businesses to operate cash-only.

When asked if Healthy Pharms will seek to contact the U.S. Attorney for Massachusetts, Averill said, “probably not directly.”

Denise A. Jillson, executive director of the Harvard Square Business Association, said the Association’s policy of supporting local marijuana businesses has not changed.

“Those of us who were following the issue knew that this was a possibility,” Jillson said. “The voters have spoken, and the city and state issued that it’s a legitimate business within the state of Massachusetts and a legitimate business within the City of Cambridge.”

Jeremy Warnick, a spokesperson for the Cambridge Police Department, wrote in an emailed statement that “we will enforce the rules as they are constituted.”

—Staff writer Henry W. Burnes can be reached at henry.burnes@thecrimson.com.

—Staff writer Isabel M. Kendall can be reached at isabel.kendall@thecrimson.com.