The Significance Of The Recent DEA Letters On Washington Cannabis Businesses

How to operate a legal cannabis business.

On August 23, 2012, the Drug Enforcement Administration (DEA) sent to landlords of various medical cannabis access points 26 letters (“the infamous 26”) notifying those landlords that their properties were subject to prosecution and civil forfeiture if they did not shut down the cannabis operations on their properties within the next thirty days. The reason the DEA gave for writing the letter was that these marijuana businesses were too close to “educational facilities.” A copy of one of those letters can be found here. The execution date of that threat looms before the marijuana industry as another reminder that cannabis is still a Federal crime even if you are running a 100% State-law compliant cannabis business.

DEA Letters on Washington Cannabis BusinessesThe day after the letters went out, our cannabis lawyers were getting phone calls asking whether the threat from the Feds was real and how the Feds had determined what structures constituted an “educational facility.” Our clients also wanted to know how the Feds were qualifying the distance between a school and the cannabis access point. The DEA did not do anybody any favors by failing to define or identify the foregoing. The infamous 26 letter sent a whole slew of cannabis businesses in Washington State into a momentary tailspin. This blog post seeks to give answers behind the rhyme and reason of the DEA letters.

First and foremost, because cannabis is still a Schedule 1 drug under the Controlled Substances Act, the Feds can shutter cannabis businesses at any time and anywhere. Still, the idea of the “1,000 foot from schools” rule is a bit of a misnomer as a strict Federal law. Actually, the 1,000-foot rule is part of a Federal sentencing guideline under the Controlled Substances Act, which provides that possessing, distributing, or using cannabis (or any other Schedule 1 drug) within 1,000-feet of a school can lead to additional or extended criminal sentencing penalties. The Feds are now apparently using a 1,000-foot rule as a sword to close down cannabis businesses in Washington State.

States are permitted to regulate cannabis for medical use despite the conflict with Federal law. Somewhat surprising, in Washington’s Medical Cannabis Act, there is no rule regarding how far access point or a collective garden must be from a school. In the Seattle City ordinance regarding MMJ, the only mention of distance from schools is in the preamble of the ordinance in the “WHEREAS” section, which is not actually Seattle City law; it is more of a strong cue that medical cannabis operations should stay away from schools.

In an interview with KUOW.ORG, Jenny Durkan, the Federal prosecutor in the Western District of Washington, touched on why the infamous 26 letter was sent out. In classic US Attorney fashion, Ms. Durkan did not go into much detail regarding the standard the Fed used in determining to whom it would send the letter, beyond saying that it is a regular Federal policy to keep cannabis away from children. Ms. Durkan started out the interview stating that:

Number one, dispensaries are illegal under federal law. Period … If someone is operating a business that is really just a storefront for drug dealing, but they’re charading as a dispensary, we will go after you.

Regarding the infamous 26, Ms. Durkan had this to say:

We felt it was important, I believe it’s important, to make sure that our school zones are protected … there is a bright line drawn around schools and [most state laws ask people] to keep their drug dealing away from schools.

Based on these statements and on the DEA’s failure to define its own enforcement criteria, the cannabis industry in Washington is again left to its own devices and best practices in figuring out what to expect from the Feds in the future and how best to prepare for that right now. These sorts of federal letters are a popular form of Federal enforcement in other jurisdictions and Washington’s cannabis community can expect to see more of them in the future.

Bottom Line: So, what’s the bottom line for those of you seeking to operate a legal cannabis business? Know your neighborhood. Be the best neighbor you can be and comply with State and local laws. More importantly, know the laws in play to make sure your location is the “required” distance away from schools, day cares, and playgrounds.