Attorney General Jeff Sessions’ decision to rescind the 2013 Obama administration memo saying it would not stand in the way of states that legalize marijuana may scare investors, but should not affect hemp-based businesses or the retailers that sell their products.
That’s the opinion of Sean Murphy, founder and publisher of Hemp Business Journal.
“CNN calls it a seismic shift—I don’t think it is—but if it is then it’s only a seismic shift for marijuana companies—not hemp companies,” Murphy said.
“If a company is a ‘hemp-derived CBD’ company — as both CV Sciences and CW Hemp are—then it should not truly affect them much from a business/operative perspective but it may cause their investors to get jittery/nervous because they don’t understand that the Cole Memo applies to marijuana companies—not hemp companies,” Murphy said.
The Cole Memo was originally drafted by former US Attorney General James M. Cole and de-prioritized the use of funds to enforce cannabis prohibition under the Controlled Substances Act towards a more hands-off approach.
For hemp companies, the more impactful legal item in this realm of regulations and oversight is the DEA New Drug Code for Marihuana extracts. Oral Arguments between HIA/Hoban Law vs the DEA are set for February.
The ruling from this will have a more direct impact as it relates specifically to DEA stepping its regulatory control from the marijuana regulatory environment into the hemp regulatory environment, Murphy noted.
One Wall Street analyst downplayed the impact of the decision, saying the legalization movement won’t be affected, CNBC reported.
“We don’t view this as terribly disruptive, as enforcement decisions will seemingly be left to state-level AG’s,” Cowen analyst Vivien Azer wrote Thursday. “In legal adult use cannabis states, given the tax revenue generation, we believe local governments and AG’s are largely on-board with legalization.”
Colorado was among the first to legalize marijuana and has raised nearly $200 million in pot revenue last year alone. Just this week, recreational use of marijuana became legal in California.