Feds Taking Hands-Off Approach to Marijuana Legalization, Retail Cannabis Businesses?

The silence from the federal government on state-level marijuana legalization is deafening, leaving officials and entrepreneurs in Colorado and Washington in a state of extreme uncertainty.

But there are some promising indications that the feds could take a more hands-off approach to the issue than initially expected. The latest sign came this week, when Washington Gov. Jay Inslee met with US Attorney General Eric Holder to discuss the state’s voter-approved marijuana law. Inslee said the meeting was a “confidence-builder” as the state crafts regulations on cannabis, adding that he’s now convinced Washington should move forward with that process,  according to the Seattle Times .

This development, while not conclusive or official, provides the best idea yet of how the government will handle marijuana legalization in Washington and Colorado. One interpretation: The feds won’t interfere too much as long as the states craft responsible regulations governing the cultivation and sale of cannabis and implement safeguards to ensure marijuana isn’t diverted to other states.

That might sound like an overly optimistic view – especially given the federal crackdown on medical marijuana – but it’s plausible. At the very least, the government seems to be taking a wait-and-see approach. The Obama administration did not, as some people feared, come out of the gates swinging and attempt to shut down the programs from the get-go or try to influence the rule-making process.

Of course, everything in this industry can change overnight, as we’ve seen numerous times. But for now, the industry is cautiously optimistic.

“It’s certainly encouraging,” said Aaron Smith, executive director of the National Cannabis Industry Association. “At a minimum, this is a positive signal that the Department of Justice is willing to work with state officials who are bound to uphold the will of their constituents.”

Smith, however, said that the government must outline a definitive policy on the issue to create a stable industry.

“As Attorney General Holder works to develop that policy he should be seeking input not only from state officials, but from the leaders within the country’s existing regulated medical marijuana industries,” Smith said. “The federal government also needs to provide clarity to financial institutions to ensure that the billions of dollars this new industry creates doesn’t end up outside the banking system.”

This is about the best situation the cannabis community could realistically hope for at this point, short of the government officially announcing that it won’t interfere at all (which was not even a remote possibility anyway). In addition to Inslee’s meeting with Holder, the government gave another indication of its position when President Barack Obama said in December that prosecuting individual marijuana users in Colorado and Washington would not be a high priority. He did not offer his take on marijuana businesses in those states. But many cannabis professionals were encouraged by his comments nonetheless for just that reason (he could have, for instance, said he was unequivocally against retail marijuana businesses).

Both Washington and Colorado are moving forward with developing regulations to allow the cultivation and distribution of marijuana for adult use. Retail marijuana shops could be up and running in both states in about a year.