After a landmark year for marijuana law reform, the state-regulated industry is on edge after the Trump administration and U.S. Attorney General Jeff Sessions made threatening statements signaling a potential shift towards a revived anti-marijuana federal government policy. But, entrepreneurs across the industry, armed with state laws protecting the regulated markets, say they are not going anywhere.

Chuck Smith, the co-founder of Dixie Elixirs, an adult-use edibles manufacturer based in Denver with operations in Nevada, Arizona, and California, says he is concerned about Sessions' comments and says it could send a chill down the backs of investors.

"I've been waking up a lot earlier in the morning this week with nightmares in my head," says Smith. "Anything that causes us not to move forward has the potential to make us move backward."

Smith, who is part of an organization of marijuana business leaders who work with Colorado Gov. John Hickenlooper, says Sessions' description of the industry as surrounded by "violence" has no resemblance to the regulated markets. Hickenlooper, during an interview with NBC's "Meet The Press" this week, said Colorado's teen drug use decreased since legalization and anecdotal evidence shows the marijuana black market has decreased in size.

Smith is concerned that misinformation and anti-marijuana reform could have a chilling effect on people who are not in the industry or trip up states with developing markets.

"Sessions says he wants to stamp out the drug cartels, but we won't be able to do that without a transparent and regulated industry," says Smith. "If you take away adult-use, all those customers are going back to the street and it will be a public safety issue."

While Sessions has the power to devastate the current state-regulated marijuana industry, governors and attorney generals around the country said they would fight to uphold their state marijuana laws. Governors from Colorado, California, Massachusetts, and Nevada all pledged their support to uphold their state's laws. Attorney generals from California, Washington, and Maine have also made statements in support of the industry, casting their support as a state's rights issue.

But, Sally Vander Veer, co-founder of Denver-based cultivator and retailer Medicine Man, also says she is worried.

"How much support does the industry actually have in Washington, D.C.?" she asked. "We're cautiously optimistic that Trump can see the economic benefit of this industry and I know he respects job creators."

Henry Wykowski, an attorney who successfully fought the federal government in asset forfeiture cases against dispensaries Harborside and Berkeley Patients Group, says companies should make sure they are in absolute compliance with state law and the Cole Memo. He also suggests companies should run through their standard operating procedures so employees know how to act during a raid.

"It would be dangerous to ignore Sessions comments," says Wykowski.

Ean Seeb, an investor who co-found Denver Relief, one of the city's first dispensaries, believes the industry is resilient and can withstand the uncertainty.

"We might see a brief pause in investment, but savvy investors and entrepreneurs understand that it will be hard to enforce federal law so long as state law, governors, and state attorneys fight for the industry," says Seeb.

Published on: Mar 1, 2017