Puerto Rico Legalizes Marijuana Via Executive Order

The Governor of Puerto Rico, Alejandro Garcia Padilla, signed an executive order this week legalizing medical cannabis.

According to the order, Governor Padilla is giving his Secretary of the Department of Health three months to prepare a report and formulate a plan to make cannabis available for specific medical uses. The Associated Press reported that Governor Padilla does not intend to allow marijuana to be smoked (that will remain a crime), but will permit using cannabis derivatives through other means of consumption.

What’s most interesting here is not that Puerto Rico legalized medical marijuana but how it did it:  through an executive order. And though we heartily applaud Governor Padilla on one hand, we also on the other hand wish that the same thing could have been accomplished by a vote of the Puerto Rican people.

Marijuana -- Puerto RicoExecutive orders are used for a variety of purposes, far too numerous to list here. At the state level they are most commonly used to reorganize parts of the executive branch. For example, Georgia Governor Nathan Deal recently signed an executive order to mobilize state agencies to implement its medical marijuana program. Executive orders are rarely used to implement substantive policies, unless the state legislature specifically gives the Governor that power.

Though Puerto Rico is not the first U.S. territory to legalize marijuana (Guam did it by ballot initiative last November), it is the first to do so by executive order. All other states and territories legalized marijuana either by popular ballot initiative or legislation. Puerto Rico’s legislature tried, but failed, to pass medical marijuana in 2015. Legalizing marijuana by an executive order truly is unprecedented.

Before you start dreaming about Bacardi, beaches, and bong hits, let’s briefly review the relationship between Puerto Rico and the United States as it relates to its new medical marijuana regime.

Puerto Rico is not technically a state; it is an autonomous, self-governing unincorporated territory of the United States. As such, it is not completely sovereign. It has its own locally-adopted Constitution and legislatively-enacted statutes, but the federal government in many instances can exercise parallel jurisdiction within Puerto Rico’s borders. For instance, federal law applies to alcohol manufacturing and income taxation in Puerto Rico. If you violate those laws, you could find yourself brought before an Article III judge at the United States District Court in San Juan (it sits in and appeals to the First Circuit), facing the same federal charges you would in any other state and, for the most part, enjoying largely identical substantive and procedural due process rights. Puerto Rico has its own U.S. Attorney—Rosa Emilia Rodríguez-Vélez—whose prosecutorial discretion and enforcement priorities are dictated by the DOJ’s Cole Memo, just like any other federal prosecutor.

In other words, just because Puerto Rico is not technically a state does not mean that cannabis businesses involved in the marijuana industry there will not face the same federal law problems as any other cannabis business throughout the rest of the U.S.—federal income taxation, banking secrecy, civil asset forfeiture, securities laws, and trademark laws (note that Puerto Rico has its own trademark regime and registration system), to name just a few.

There is some overlap in the jurisdictional issues faced by Puerto Rico and the Indian Tribes (whose legalization efforts we’ve spoken and written about extensively), and it will be interesting to see how Puerto Rico’s program develops in the face of these unique sovereignty issues. We’ll be keeping our eye on the situation, and stay tuned for developments to come.