Pot industry worries, waits in wake of new federal policy

SAN FRANCISCO — This week’s announcement that the U.S. Justice Department was ditching its hands-off approach to states that have legalized marijuana initially sent some in the industry into a tailspin, just days after California’s $7 billion recreational weed market opened for business.

But for long-term pot purveyors accustomed to changing regulatory winds, the decision was just another bump in a long and winding road to proving their business legitimacy.

Many in the industry said they’re keeping a wait-and-see attitude because the effect of Attorney General Jeff Sessions’ announcement depends on whether federal prosecutors crack down on marijuana businesses operating legally under state laws. Sessions provided no details other than saying individual U.S. attorneys are authorized to prosecute marijuana operators as they choose.

Stocks of publicly traded marijuana-related companies plunged Thursday after Sessions announced the Justice Department’s new policy. On Friday, though, many of those stocks recovered.

“The announcement was largely symbolic,” said Patrick Moen, general counsel of Privateer Holdings, a Seattle-based venture capital firm that invests in marijuana businesses. “This kind of stunt will not have a substantial effect on the industry.”

Moen noted Sessions’ action doesn’t change federal law, which includes a congressional provision barring authorities from spending federal money to prosecute medical marijuana operations that abide by state laws.

He conceded that the action would have a “near-term chilling effect” on the industry’s lobbying effort to compel banks and insurance companies to accept its business. Banks and insurance companies refuse to do business with cannabis companies because marijuana is illegal under federal law and most financial institutions are federally insured, forcing marijuana businesses to operate in cash.

Most of Seattle-based Privateer’s $150 million in investments are in companies based outside the United States, and Moen conceded that Sessions’ action Thursday would keep it that way for the short term because of regulatory uncertainty in the United States. Online news and marijuana information site Leafly is the firm’s biggest U.S. investment.

Sales begin in San Francisco

In San Francisco, a city long known for embracing weed, sales of recreational marijuana began Saturday as planned. Six pot shops confirmed they were selling recreational marijuana Saturday after receiving their state licenses the day before.

Shabnam Malek, a 44-year-old lawyer and mother of three, waited in line for a half hour for Apothecarium to open its doors in San Francisco.

She marveled at the difference between buying a legal bag of weed from the times in her 20s when she was buying marijuana on the streets, a situation she said exposed her to contaminated products and unsafe situations.

She said she thinks Sessions’ announcement will backfire on him.

“If anything I feel more galvanized,” she said. “I think he’s going to see a lot of us come out and be even more vocal about our support for legal cannabis.”

Sessions’ action also was on the mind of Kevin Johnson, director of operations at Grass Roots, which also opened its doors for recreational pot in San Francisco on Saturday.

“It’s certainly a concern,” Johnson said. “It may be more difficult for us to do proper banking but when we opened up, George W. Bush was president and the DEA was doing raids on dispensaries. We’re in this for the long haul.”

Grass Roots opened 13 years ago to sell medical marijuana.

Worried in Colorado

In Colorado, CEO Andy Williams said the announcement that he’s open to prosecution could turn years of work and millions of dollars of investment in his store Medicine Man Denver into a criminal enterprise. He said Sessions’ action goes against the will of Colorado voters, who legalized marijuana in 2014.

“Any action by the attorney general goes against the public sentiment,” he said. “I don’t think it’s a smart move. Of course, we haven’t seen what it is yet, so we’ll wait and see.”

The share price of Medicine Man dropped nearly 40 percent Thursday, from $3.18 to $2.11. The stock closed up Friday at $2.28 a share.

Colorado’s U.S. attorney, Bob Troyer, said his office won’t change its approach to prosecution, despite Sessions’ guidance. Prosecutors there have always focused on marijuana crimes that “create the greatest safety threats” and will continue to be guided by that, he said.

‘Business as usual’ in Oregon

Don Morse, director of the Oregon Cannabis Business Council, said he expects “business as usual” in Oregon’s marijuana industry despite Sessions’ policy.

The U.S. Attorney for Oregon, Billy J. Williams, indicated he would maintain the same level of enforcement with state and local authorities by focusing on unlicensed production of marijuana and smuggling to other states.

“Legal marijuana has become so entrenched in the U.S. — it’s a multibillion-dollar industry — and I don’t see the people who are behind this, people like myself, rolling over for the Justice Department, which means Congress will have to act,” Morse said. He said Congress should declassify marijuana as a Schedule 1 dangerous drug.

Morse said he believes the same federal provision that bars prosecution of medicinal marijuana operators also protects the recreational side to some extent, because “it is difficult to distinguish one from the other.”

Cannabinniers, a San Diego maker of marijuana-infused food and drink also expects slower investor interest in the short term.

“At this point, we have no details about what the attorney general plans to do or what is going to happen, but regardless this is going to slow down investment in one of the fastest-growing industries,” said Jeffrey Paul, vice president of sales for Cannabinniers.

Change could alter Nevada’s economy

Nevada’s thousands of marijuana employees and millions of dollars in pot tax revenue could be in jeopardy with the rescinding of a federal memo seen as the sole protector for state-regulated pot markets.

The directive puts the hundreds of licensed marijuana businesses in Nevada — and nearly 9,000 workers — in a state of flux as they wait to see what the move means for the state’s budding industry that generated more than $126 million in sales and some $19 million in tax revenue through its first four months of operation.

— The Review-Journal’s Colton Lochhead contributed to this report.

ad-high_impact_4
News
Three Square helps TSA workers
Three Square Food Bank donated over 400 care bags to TSA workers affected by the government shutdown Wednesday, filled with food, personal hygiene products and water.
Las Vegas furniture store donates to Clark County firehouses
Walker Furniture donated new mattresses to all 30 Clark County firehouses in the Las Vegas Valley, starting today with Station 22. (Mat Luschek/Las Vegas Review-Journal)
Mount Charleston Gets Heavy Snow, Fog
Mount Charleston saw heavy snow today, and fog in lower elevations as a cold front swept across the Las Vegas Valley. (Benjamin Hager/Las Vegas Review-Journal)
Krystal Whipple arrested in Arizona
Krystal Whipple, charged in the killing of a Las Vegas nail salon manager over a $35 manicure, is expected to return to Nevada to face a murder charge.
Holocaust survivor on acceptance
Holocaust survivor Celina Karp Biniaz, who was the youngest person on Schindler’s List, talks about the most important message for people to understand from her life and experiences.
Holocaust survivor speaks about telling her story
Holocaust survivor Celina Karp Biniaz, who was the youngest person on Schindler’s List, tells of opening up about her experiences during Sunday’s event at Temple Sinai.
Jesus Jara State of the Schools address
Clark County School District Superintendent Jesus Jara delivers his State of the Schools address on Friday, Jan. 11, 2019. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Michael Naft sworn in to Clark County Commission
Michael Naft, chosen by Gov. Steve Sisolak to be his replacement on the Clark County Commission, was sworn into office on Wednesday, Jan. 9, 2019. (Shea Johnson/Las Vegas Review-Journal)
CES Opening Party in Omnia Nightclub at Caesars Palace
CES conventioneers packed Omnia Nightclub at Caesars Palace, and let loose as they danced to DJs into the night. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas police piecing together details of fatal shooting
Six hours after the fact, Las Vegas homicide detectives worked to reconstruct the scene of a shooting early Jan. 7 that left one man dead in the southeast valley. (Rio Lacanlale/Las Vegas Review-Journal)
Dyer Lawrence explains college football playoff system proposal
Las Vegan Dyer Lawrence has a new idea for a college football playoff system that includes a unique scheduling component called National Call Out Day. (Ron Kantowski/Las Vegas Review-Journal)
Death row inmate Scott Dozier found dead in his cell
Nevada death row inmate Scott Dozier is dead. Dozier’s death ends his legal odyssey, which began in 2007 when he was convicted in the 2002 murder of Jeremiah Miller, but does little to clarify what’s next for Nevada’s death penalty.
I-15 southbound near Primm closed after ‘major crash’
A rollover crash Saturday morning involving at least nine vehicles on southbound Interstate 15 near Primm caused an hourslong traffic delay. Traffic was backed up to Sloan, live traffic cameras show. (Rio Lacanlale/Las Vegas Review-Journal)
Death Valley visitors deal with shutdown
Visitors staying at the Furnace Creek Campground were forced to move from the campground following health and safety concerns due to lack of resources during the partial government shutdown at Death Valley National Park in Calif., on Friday, Jan. 4, 2019. Richard Brian Las Vegas Review-Journal @vegasphotograph
Half of homicides in Henderson for 2018 domestic violence related
Lt. Kirk Moore of the public information office of the city of Henderson police department speaks to the Review-Journal in Henderson, Thursday, Jan. 3, 2019. Henderson saw a slight increase in homicides in the past year. (Rachel Aston/Las Vegas Review-Journal)
Governor-elect Steve Sisolak stops by Las Vegas Boys and Girls Club
Governor-elect Steve Sisolak kicks off his tour to Carson City, which will take him from Las Vegas, through Tonopah, and up to the capital city. First stop is the Downtown Boys & Girls Club.
Certificates for renewing wedding vows in Clark County
The Marriage License Bureau in Clark County began issuing a Certificate of Vow Renewal to married couples who are renewing their wedding vows on Jan. 3, 2019. (Shea Johnson/Las Vegas Review-Journal)
Las Vegas flu season better than last year (so far)
Dr. Fermin Leguen, chief medical officer and director of clinical services at the Southern Nevada Health District, said there were 24 flu-related deaths at this point in the flu season. No deaths have been reported so far this year. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
The Las Vegas Valley’s First Baby of 2019
The first 2019 baby in the Las Vegas Valley was Melialani Chihiro Manning, born at 12:10 a.m. at Henderson Hospital. (Briana Erickson/Las Vegas Review-Journal)
Las Vegas NYE Fireworks - VIDEO
The full show: A spectacular view from the rooftop of the Trump International Hotel as 80,000 pyrotechnics illuminated the Las Vegas Strip at the stroke of midnight. Fireworks by Grucci choreographed launches from the Stratosphere, the Venetian, Treasure Island, Caesars Palace, Planet Hollywood, Aria and MGM Grand.
Snow in Henderson on New Year's Eve morning
Light snow flurries in Anthem Highlands in Henderson on Monday morning, the last day of 2018.
Sources: Henderson Constable may face more charges
Henderson Constable Earl Mitchell may face additional charges ... stemming from his spending of county funds, sources said. Mitchell was indicted earlier this month on five felony theft and fraud charges ... after a Las Vegas Review-Journal story questioned his spending. But grand jury records show even more extensive spending including ... an $800 dinner at steakhouse ... nearly 200 atm withdrawals mostly at gambling establishments ... and even Disneyland tickets. But his attorney plans to ask a judge to dismiss the charges.
Las Vegas NYE Restrictions and Enhanced Security
If you are planning to celebrate New Year's Eve on the Las Vegas Strip or Fremont Street, be aware that you are not allowed to bring backpacks, coolers, strollers or glass. There will also be an increase in security to ensure safe celebrations across town.
Catholic Charities serves up 53rd annual Christmas dinner
Catholic Charities of Southern Nevada and more than 100 volunteers served 1,000 Christmas meals to Southern Nevada's homeless and less fortunate. (K.M. Cannon Las Vegas Review-Journal @kmcannonphoto)
Henderson couple adds another school to their generosity
Bob and Sandy Ellis of Henderson, who donate to several Clark County School District schools, have added Matt Kelly Elementary in Las Vegas to their list of schools where every student gets new shoes, socks and a toy. (K.M. Cannon/Las Vegas Review-Journal)
Jeffrey Martin Added To Nevada's Black Book
Martin was one of four men convicted of theft and cheating at gambling in 2016 in Clark County District Court and sentenced to prison. The Nevada Gaming Commission voted unanimously Thursday to include Martin in the black book.
Raiders Stadium Timelapse
Construction on the new Raiders stadium continues in Las Vegas.
Buffalo Wild Wings security video
Security footage from a Buffalo Wild Wings restaurant in southwest Las Vegas captured a driver who repeatedly crashed into a vehicle in a failed attempt to squeeze into a tight parking spot.
The Magical Forest at Opportunity Village
Opportunity Village's Magical Forest added 1 million lights and a synchronized music show visible from all over the forest this year. The holiday attraction, which began in 1991, has a train, rides, food and entertainment along with the light displays. (Heidi Knapp Rinella/Las Vegas Review-Journal)
Navigating the new I-515 southbound to 215 Beltway ramp configuration
After opening at 5 a.m. Tuesday, Dec. 18, 2018, the new Interstate 515 southbound to the 215 Beltway westbound freeway ramp configuration caused confusion amongst motorist. Here’s how to navigate the new ramp. (Mick Akers/ Las Vegas Review-Journal).
TOP NEWS
News Headlines
ad-infeed_1
ads_infeed_2
Local Spotlight
Home Front Page Footer Listing
Circular
You May Like

You May Like