Massachusetts marijuana businesses are wary over threats of federal crackdown | Crain's Boston

Massachusetts marijuana businesses are wary over threats of federal crackdown

Local marijuana entrepreneurs and investors say a federal crackdown on weed could hamstring their new market in Massachusetts, just months after voters legalized the drug for adult recreational use in November.

In a briefing last week, White House press secretary Sean Spicer told reporters he expected "greater enforcement” of federal drug laws, which still count marijuana as an illegal substance.

"When you see something like the opioid addiction crisis blossoming in so many states around this country, the last thing we should be doing is encouraging people," Spicer said, linking pot to a deadly epidemic that has acutely affected Massachusetts.

There is little evidence linking increased marijuana use to opioid abuse, however. The National Academy of Sciences’ Institute of Medicine has said “there is no conclusive evidence that the drug effects of marijuana are causally linked to the subsequent abuse of other illicit drugs.”

President Donald Trump has said he’s "in favor of medical marijuana 100 percent," and that the decision to legalize recreational marijuana use should be left up to the states. (Polls are on his side there—a Quinnipiac poll released last week found a majority of Americans across all age groups and political parties are against the government enforcing federal prohibition laws in states that have legalized the drug.)

But Vice President Mike Pence and Attorney General Jeff Sessions have long been vocal opponents of marijuana. Sessions has called marijuana legalization a "tragic mistake." That has some reading Spicer’s comments as an opening salvo in a coming war on states that have legalized cannabis for recreational or even medicinal use.

"There is still a federal law that we need to abide by when it comes to recreational marijuana and drugs of that nature,” Spicer said.

Rob Hunt, a Boston-based consultant to and investor in marijuana businesses, said he’s troubled by Spicer’s statement, but doesn’t think it will translate into action.

“Spicer’s statement, while in some ways concerning, it’s certainly not policy,” Hunt said. He said while Pence and Sessions are anti-marijuana, Trump advisor Peter Thiel has himself invested in marijuana businesses. And Hunt points to California Rep. Dana Rohrabacher, who plans to introduce legislation in Congress preventing enforcement from the Department of Justice in states that have legalized the drug.

Hunt was CEO of Evergreen Garden Centers in Massachusetts, New Hampshire and Maine and in 2015 founded Tuatara Capital, a private equity company focused on cannabis-related investments launched.

Hunt said if the Trump administration decides to enforce federal laws against marijuana, it will likely focus on recreational use. Nearly 60 percent of Americans live in states that allow medical marijuana in some form, and Hunt said those policies aren't likely to change.

"While Spicer's comments are certainly cause for concern, it's still too early to tell exactly what the Trump Administration will do on marijuana," said Kris Krane, managing partner of the Massachusetts medical marijuana dispensary consulting company 4Front Ventures. "Since President Trump repeatedly said on the campaign trail that he supports states' rights on marijuana, it's still possible that the 'greater enforcement' Spicer mentioned could be directed at drug criminals who are acting outside the bounds of state marijuana programs."

Mark Malone, executive director of the Cannabis Business Alliance, said in a statement that he hopes Spicer's comments don't foreshadow an increase in federal enforcement.

"President Trump has said that this is a state issue, so we expect him to be true to his word and continue to let states regulate cannabis," said Malone. "Dialing back any level of legalization of marijuana would be extremely misguided and would turn back the enormous positive progress that has occurred over the last several years."

The threat of a federal crackdown has also shaken entrepreneurs who don't sell pot at all, but whose products cater to marijuana users.

Shanel Lindsay, who helped write the ballot measure that legalized pot for people over 21 in Massachusetts, founded the company Ardent last year. She said she's disappointed by Spicer's comments.

“I think we need to wait and see,” Lindsay said.

Lindsay said her company has already sold 3,000 units of their main product—a tabletop device for distilling the active chemicals from marijuana, simplifying the process of making THC-laced salves, tinctures and edibles—and is projecting $1.5 million in sales this year. Most of that will be from out-of-state sales, but Lindsay called the nascent Massachusetts market “a huge opportunity.”

If the Trump administration cracks down on states that have legalized marijuana, Lindsay said, he could pay a political price.

“Trump promised a better economy and more jobs,” she said. “Reversing course on marijuana would fly directly in the face of those promises.”

A spokeswoman for Governor Charlie Baker told the Boston Globe the Baker administration will “move forward” with the new law, despite Spicer’s comments last week.

But Lindsay said state lawmakers sent another message at the end of December when they delayed the implementation of some parts of the legalization ballot measure by six months.

“Our representatives and senators should be respecting the will of the people and they should be implementing this law as written,” Lindsay said.

Hunt, who is an investor in Lindsay’s company, is less worried about the delay.

“It means very little in the long-run,” he said.

February 27, 2017 - 9:07pm