Nevada’s foray into legalized pot was never without risks, particularly from a public-health standpoint. But also looming in the background was the reality that marijuana remained illegal under federal law.
Truth be told, when state voters in 2016 approved the use of recreational marijuana, nobody knew for sure how federal law enforcement officials would react. That uncertainty became much more acute on Thursday when Attorney General Jeff Sessions rescinded an Obama-era directive urging federal prosecutors to tread lightly in states with legal weed.
Legalization advocates raised the specter of federal agents rampaging through Nevada, California, Colorado and other states that have bucked the feds on the issue. But that’s unlikely. Mr. Sessions’ directive does little to actually change policy; it simply leaves the matter up to U.S. attorneys themselves.
Still, there’s no doubt the move will disrupt the nascent industry, at least in the short term. Banks were already hesitant to get involved with legal pot, given that the drug remains a Schedule I substance under federal law. Attorneys taking on industry clients also faced challenges, as did the Nevada casino industry in formulating guidelines to deal with pot-smoking patrons.
Mr. Sessions’ order will only exacerbate those concerns and likely lead institutional investment interests to shy away from marijuana entrepreneurs.
None of this should be any surprise. There was always an element of risk — and that will remain until the inevitable legal showdown is resolved.