Executive Summary: On January 4, 2018—just days after California began selling recreational marijuana and became poised to become the largest legal market for the drug in the U.S.—the Department of Justice changed tactics on marijuana enforcement by rescinding the “Cole Memo” and other internal guidelines. Issued in 2013, the Cole Memo de-prioritized federal marijuana enforcement efforts to, among other things, prevent distribution of marijuana to minors; prevent marijuana revenue from funding criminal enterprises; prevent marijuana from moving from legal states; and prevent violence related to growing or distributing marijuana.

Rescission of the Cole Memo creates serious risks to legal businesses operating in states like New Jersey, where medicinal sale of marijuana is lawful and recreational sale soon will be. Now, U.S. attorneys in states where cannabis is legal can become more aggressive in enforcing existing federal laws prohibiting the cultivation, possession, and distribution of marijuana. Though some experts doubt the average consumer will be in danger of arrest by the federal government, the threat to state-legal recreational marijuana businesses is palpable.

Employers’ Bottom Line: We do not predict the latest announcement by the federal government will alter the potential issues and concerns affecting New Jersey businesses identified in our prior Client Alert regarding the expected legalization of recreational marijuana use in New Jersey, available here. Indeed, strongly-worded comments from government officials from Colorado, Oregon, and other states where recreational marijuana is legal suggest the New Jersey government also will rally behind its state-legal cannabis businesses.