The owner of a Seattle pot shop isn’t too worried about federal raids now that U.S. Attorney General Jeff Sessions has knocked down an Obama-era policy the marijuana industry relied upon. But there are other concerns to worry about.
“It doesn’t mean that jackbooted thugs are going to start breaking into and raiding pot shops and pot grows,” Ian Eisenberg said. “It just takes away one level of certainty we have in the industry.”
There are two main issues to watch out for now and they have more to do with financial hazards than police raids, according to Eisenberg who owns one of Seattle’s most prominent pot shops — Uncle Ike’s. He has three stores in the area. His shop, like all pot businesses, has operated under the Cole Memo — a policy that has allowed state recreational pot businesses to operate despite federal laws against them. Under the Cole Memo, the shops could have bank accounts and other services.
“From day one here we’ve had credit unions … that is the big fear right now; how the credit unions or the banks will react to what Sessions has done,” Eisenberg said. “If we lost the ability to have money management through a credit union or an armored car pick up, it increases the risk to public safety. You are going to have a lot more cash on hand, private cash transfers like paying tax bills in cash instead of wire transfers or checks. That’s a real concern – you don’t want to put employees at risk, you don’t want to put the public at risk. And that would be a very unfortunate consequence of what Sessions has done.”
The other issue is the overall investment in the industry which has shown great success and produced immense tax revenue for the government.
RELATED: Washington pot sales reach new high
“Another consequence of what Sessions has done is there was more institutional money flowing into the industry,” Eisenberg said. “A common complaint (of the industry) is that minorities and people of color have a hard time getting a leg up in the industry, and money was flowing in to allow other people to get financing to start up. I think now we will see a lot of financing disappear. A lot of people that were investing in the industry were doing so because they were comfortable with the Cole Memo. Now with that off the table, the perceived risks and maybe actual risks are higher so I think the investment in the industry will dry up a little bit.”
Seattle pot shop defense
On the positive side, Eisenberg says that Washington has leaders who are up to the challenge and potential legal fights. He points to Seattle Mayor Jenny Durkan and Seattle City Attorney Pete Holmes. Holmes made headlines in the past over his lax attitude toward enforcing marijuana laws, and the fact he once brought weed to work at city hall. There’s also state Attorney General Bob Ferguson who is no stranger to suing the Trump administration and the federal government. Ferguson sued them 18 times in 2017.
“These are people who understand cannabis,” Eisenberg said. “They understand how it would help the state and patients to have a legal framework and I think they will do the right thing and give us guidance in how to run our businesses in the best way possible to not attract federal attention.”
In the wake of Sessions’ announcement Thursday, Western District U.S. Attorney Annette Hayes issued a statement that said her office has focused on violent and organized crime related to marijuana in the past. She said “We will continue to do so to ensure – consistent with the most recent guidance from the Department – that our enforcement efforts with our federal, state, local and tribal partners focus on those who pose the greatest safety risk to the people and communities we serve.”
For example, Hayes has brought cases dealing with gangs and gun crime in the past. She also prosecuted a case against a Seattle police officer accused of transporting marijuana across the country.
“It’s probably too early to know what the effects are going to be,” he said. “It’s obviously not good for the industry, and it’s not good for the consumers and patients out there. It adds another level of chaos, which Trump seems really good at creating.”