By Patrick Rea, CEO & Cofounder, Canopy Accelerator
Much has been published and discussed since Thursday, February 23rd, when White House Press Secretary Sean Spicer answered a question about federal marijuana enforcement during his press briefing.
The next week, Attorney General Jeff Sessions commented on federal marijuana enforcement at the National Association of Attorneys General meeting.
And finally, Conservative legal radio host Hugh Hewitt interviewed Attorney General Sessions during which marijuana enforcement came up and was discussed.
These comments from Trump administration officials are concerning, and in times like these we turn to the experts in marijuana policy for their analysis. Rob Kampia, the founder and Executive Director of the Marijuana Policy Project, is one such expert and we are happy to support his work.So we’ve included Rob’s analysis of the Trump administration commotion here and below.
At Canopy, we monitor political developments continuously as part of our portfolio management and while these developments are concerning we concur with the analysis by the MPP. Our portfolio approach is designed to provide a layer of downside protection in the case of a slowdown in the development of the cannabis industry. We deliberately invest in companies that do NOT touch the plant and also prioritize investment in companies with the potential to scale to other industries. All of these factors combine to support our intention to create a more secure portfolio while maintaining exposure to the high growth cannabis industry.
Still, these types of comments can unnerve investors and cause a slowdown in new investment dollars flowing to startups and established businesses. It's threatening a multi-billion dollar industry that provides thousands of jobs across the majority of states in the union. Not good.
Thankfully, every day is a new day, and on Wednesday, March 15th, AG Sessions admitted that a Federal crackdown on the legal #cannabis industry is unlikely. Practically, any Trump administration directed action to stymie the burgeoning cannabis industry would be difficult thanks to the Rohrabacher-Farr amendment, which prohibits the Justice Department from spending federal funds to interfere with the implementation state medical marijuana laws. However, this amendment is part of the omnibus spending bill, which needs to be approved annually. Sources close to the advocacy front indicate this amendment will pass again in 2017, though nothing is guaranteed.
What does this mean for investors and entrepreneurs in the cannabis industry? Much seems to have changed, but little has. A mentor of mine, amidst the early stages of a sprouting crisis, pulled me aside and instructed me not to pause and resist reacting for 24 hours. His read was the crisis, rooted in emotion and rhetoric, would work itself out if left alone. It did. The lesson was learned.
It may seem like a long time, but we’re still in the first months of this Trump presidency. With so much turmoil boiling, one wonders if cannabis is an issue Trump will take on. Private conversations between AG Sessions and Sen. Rand Paul indicate cannabis won’t be a priority for the Justice Department.
“He told me he would have some respect for states' right on these things. And so I’ll be very unhappy if the federal government decides to go into Colorado and Washington and all of these places. And that’s not the [what] my interpretation of my conversation with him was. That this wasn’t his intention." - Sen. Rand Paul (R-Ky.)
Let’s all hope this doesn’t change. In the meantime, let’s all donate to the Marijuana Policy Project.