Decriminalized Marijuana and the Promise of Legal Profits

Pressure is building on federal, state and local governments to reconsider the criminal laws regarding marijuana and to allow interests as diverse as medical research, business entrepreneurs, and tax authorities to benefit from the new legal marijuana industry. Recent guidance memoranda by the U.S. Department of Justice (DOJ) and Department of Treasury (Treasury) have informally decriminalized some marijuana-related conduct, although many legal marijuana supporters and business interests complain that the guidance does not go far enough.'

The key issues addressed in those memoranda are:

• Criminal law enforcement priorities given marijuana's continued status as an illegal controlled substance regulated by DEA and state drug enforcement agencies; and
• Handling of proceeds of legal marijuana sales by financial institutions without violating the Bank Secrecy Act and related statutes.'

The federal government makes clear that it is not challenging the states' legalization of marijuana, but rather it seeks to assure that marijuana-related businesses operate with the same diligence as other businesses whose products implicate public health and safety concerns or generate profits that can fund criminal organizations. Businesses that enter the legal marijuana industry will have to carefully monitor and follow the patchwork of formal regulations and less formal guidance memoranda slowly being issued by government authorities. While perhaps not a risk-free endeavor, these enterprises can look to models and standards from other highly regulated industries to minimize criminal exposure.”