Home > Academic Articles, Drug Enforcement > From Drug Cartels to The Boardroom: Is The Medical Marijuana Industry Really Legal?

From Drug Cartels to The Boardroom: Is The Medical Marijuana Industry Really Legal?


  • Medical marijuana is becoming an accepted alternative palliative treatment
  • State law does not protect users against federal prosecution
  • The Attorney General is not looking to prosecute medicinal marijuana use but the risk of prosecution is still very real

This article is by David Mindell, a 1L at Chicago-Kent.

Only a few years ago much of the marijuana found in America could be traced to drug empires and smuggling operations in Mexico.  One of the most widely used drugs, marijuana, has been at the forefront of anti-drug campaigns dating back to the early 20th century.[1] The medical benefits of marijuana are fast becoming an accepted alternative treatment in palliative care. California paved way for the medical marijuana industry with the passage of the Compassionate Use Act of 1996.[2] The Act promised seriously ill Californians the right to use and obtain marijuana for medical purposes, when deemed appropriate by a medical physician.  Fourteen years later fourteen states followed.

State statutes, however, do not provide an umbrella from federal prosecution.  The federal government regulates marijuana through the Controlled Substance Act (CSA), 21 U.S.C. § 811, which does not recognize the difference between medical and recreational use of marijuana.[3] Under the CSA, marijuana is classified as a schedule I drug, which is highly addictive and without medical value.  Marijuana for medicinal purposes is still illegal. The Drug Enforcement Administration (DEA), charged with enforcing federal drug law, frequently prosecuted patients, caregivers, and businesses in the medical marijuana industry.

In October 2009, the United States Attorney General, Eric Holder, and Deputy Attorney General, David W. Ogden, distributed a memorandum for selected United States Attorneys, temporarily ending the government’s crusade against medical marijuana users complying with state law.[4] The memo proclaims that the core priority of the Department of Justice is to fight illegal drugs and the illegal drug manufacturing and trafficking networks. The illegal drug list still contains marijuana. The priority of the Department is no longer focusing federal resources on prosecuting individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.  But is the industry really safe?  The Attorney General is temporarily managing the situation by diverting the government’s attention.  Although this is stated in a memo it is not the law.

Medical marijuana is building industries and communities. In northern California, the business is estimated to account for nearly two-thirds of the local economy, generating up to $1 billion a year.[5] Further, institutions such as MedGrow Cannabis College are emerging to educate medical marijuana patients and caregivers about the law and how to grow and cultivate marijuana.[6] “Other industries are not growing, but the medical marijuana industry is booming,” said a medical marijuana caregiver. MedGrow has sold out its six-week courses for months, producing hundreds of qualified registered caregivers, who are legally making a living off medical marijuana.

For the entrepreneurs finding opportunity in the industry, the risk of federal prosecution must not be discounted. The Attorney General’s memo does not legalize marijuana or provide a legal defense to a violation under federal law.  The last line of the memo states that “this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial direction.”  While the government may be looking the other way right now, it is still illegal.  With the advent of dispensaries and cannabis education programs, marijuana is beginning to be exchanged not by drug cartels but by business professionals.  Unfortunately until federal law changes, the pioneers of this industry will have to continue to break the law in order to follow the law.

[1] In 1937, Congress passed the 1937 Marijuana Tax Act, criminalizing the use and possession of marijuana nationally.

[2] http://www.leginfo.ca.gov/pub/03-04/bill/sen/sb_0401-0450/sb_420_bill_20031012_chaptered.html

[3] http://www.justice.gov/dea/pubs/csa/811.htm

[4] http://www.justice.gov/opa/documents/medical-marijuana.pdf

[5] http://www.cnbc.com/id/28281668

[6] http://www.medgrowmi.com/

  1. June 30, 2010 at 12:16 am

    I also think that a lot of the weed that dispensaries get is through illegal trade from small local growers. http://stonerdiary.wordpress.com

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