Another excellent recent example of an Ecoforming event that has sent shockwaves through the industry and adversely affecting share prices was the statement made (February 23) by the White House Press Secretary Sean Spicer. Mr. Spicer appeared to have made a clear distinction between medical marijuana and recreational marijuana. With respect to the latter “I do believe you will see greater enforcement of it” Mr. Spicer remarked. The “it” being the Federal laws with respect to enforcement. There are two extreme scenarios that some believe may play out.
One extreme view would have the US Federal Government take as its position that Federal law trumps State law and therefore the legality of recreational marijuana in those States that have legalized it could be headed to the Courts. The other extreme view is that the statement was posturing only. However, taken at face value, it was a statement suggesting that any person or business that is not in full compliance with State law is on notice that Federal law may be enforced. That view is consistent with the United States Court of Appeal for the 9th District’s ruling in August 2016 that essentially stated the Department of Justice (includes the FBI, DEA, etc) could not prosecute any person or business in lawful compliance with the cannabis laws of the individual State. Now is good time to reflect on what our own Federal Government said last spring and summer – that they expected existing laws to be upheld. As recent as December 2016, a headline of the Toronto Star stated that our own Prime Minister “wants police to enforce the law and criminally charge illegal marijuana dispensaries”. The two statements, at face value, made by each of the two nation’s Federal governments are not dissimilar. Before new laws can be introduced, action may be needed against those who have expressed no interest in being a part of any new legal and regulatory framework. The statements may have been similar but only time will tell how similar any actions taken are.
Many speculate that the US will not be at either extreme interpretation of the Press Secretary’s comment. The legal marijuana industry directly and indirectly employs over 150,000 Americans (August 2016 statistic and therefore understated) and the industry is valued in the billions. Turning the clock back will not only put many Americans out of work but there would also be the loss of hundreds of millions in tax revenues to States where it is legal. Perhaps even worse, it would be a return to black market supply system – further in this article is evidence that some black-market product may be laced with powerful narcotics. What investors will be looking at is - will the US administration’s actions result in the US Industry further lagging the world and if so investment dollars may move to a more hospitable environment such as Canada.
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