Must Reads: Trump says he is likely to support ending blanket federal ban on marijuana

Reporting from Washington —  President Trump said he likely will support a congressional effort to end the federal ban on marijuana, a major step that would reshape the pot industry and end the threat of a Justice Department crackdown.

Trump’s remarks put him sharply at odds with Atty. Gen. Jeff Sessions on the issue. The bill in question, pushed by a bipartisan coalition, would allow states to go forward with legalization unencumbered by threats of federal prosecution. Sessions, by contrast, has ramped up those threats and has also lobbied Congress to reduce current protections for medical marijuana.

Trump made his comments to a gaggle of reporters Friday morning just before he boarded a helicopter on his way to the G-7 summit in Canada. His remarks came the day after the bipartisan group of lawmakers proposed their measure.

One of the lead sponsors is Sen. Cory Gardner (R-Colo.), who is aligned with Trump on several issues but recently has tangled with the administration over the Justice Department’s threats to restart prosecutions in states that have legalized marijuana.

“I support Sen. Gardner,” Trump said when asked about the bill. “I know exactly what he’s doing. We’re looking at it. But I probably will end up supporting that, yes.”

The legislative proposal, which is also championed by Sen. Elizabeth Warren (D-Mass.), would reshape the legal landscape for marijuana if it becomes law.

California and eight other states, as well as Washington, D.C., have legalized all adult use of marijuana. An additional 20 states permit marijuana for medical use.

But even as states legalize, marijuana has remained a risky and unstable business because of federal law making it illegal. Concerns about federal law enforcement seizures have inhibited most lenders from working with marijuana businesses. And investors have also proceeded cautiously.

“If you are in the marijuana business … you can’t get a bank loan or set up a bank account because of concern over the conflict between state and federal law,” Gardner said at a news conference Thursday to unveil the new bill. “We need to fix this. It is time we take this industry out of the shadows, bring these dollars out of the shadows.”

He called it a “public hypocrisy” that the firms are expected to pay taxes yet are barred from participation in the financial system.

A lifting of the federal prohibition also would bolster efforts to create uniform testing and regulatory standards for marijuana, and potentially free scientists to pursue research into the medical uses of marijuana.

Trump’s support could potentially have a major impact, providing political cover for Republicans who worry about being tagged as soft on drugs. Still, the proposal faces a tough road in Congress.

Even though most lawmakers now represent areas where pot is legal for at least medical use — and public opinion polls show majorities of Democratic and Republican voters nationwide favor legalization — congressional leaders have shown little appetite for loosening restrictions. The House is blocking the District of Columbia from permitting sales of recreational pot, even after its voters chose to legalize. A 2014 budget amendment that protects medical marijuana businesses from Drug Enforcement Administration raids is perpetually under attack.

“It faces tremendous head winds,” John Hudak, a marijuana policy expert at the Brookings Institution in Washington, said, referring to the Gardner-Warren bill.

Trump said he is likely to support the federal legalization effort despite a warning against it from a coalition of narcotics officer groups.

“We urge you to see through the smoke screen and reject attempts to encourage more drug use in America,” they wrote in a letter to Trump Thursday.

The marijuana industry continues to be whipsawed by mixed messages from the administration.

In January, the Justice Department sent pot businesses into a panic by rescinding an Obama-era policy that restricted prosecutors from targeting sellers who operate legally under state laws. Sessions warned at the time that any pot business could find itself in the crosshairs of prosecutors — regardless of whether marijuana was legal in their state.

The move enraged Gardner, who said the administration had earlier given him assurances that there would be no such raids, at least in his state. At Gardner’s behest, Trump in April ordered an abrupt retreat from the announced crackdown. Trump made the order without even consulting Sessions, a sign of their tense relationship.

But prosecutors did back off. During this administration, there have apparently been no federal raids or seizures of pot companies for sales that are legal under state law.

“Remarkably little, if anything, has changed,” said John Vardaman, a former Justice Department attorney who helped draft the Obama-era rules, known as the Cole memo, after former Deputy Atty. Gen. James M. Cole, who issued it. “Almost every U.S. attorney in states where marijuana is legal has decided to apply the same principles as the Cole memo,” said Vardaman, now an executive at Hypur, which sells banking compliance software to marijuana companies.

Banking is the area in which the Gardner bill could most help pot companies.

The Senate proposal, and a companion bipartisan measure in the House, would amend the Controlled Substances Act so that its marijuana provisions do not apply to any person or business that is in compliance with state laws. To put bankers at ease, it specifies that such marijuana sales would not be considered trafficking and do not amount to illegal financial transactions.

“The very people you want involved in this market are the ones who have been most reluctant to get involved because of the banking issue,” said Vardaman. “If you address that, you would have enormous beneficial effects for the industry.”

While Trump’s comments were welcomed by marijuana activists, they remain on edge, especially because of Trump’s spotty record at actually pushing legislation through Congress.

“We have seen this president voice his support for a lot of things related to cannabis, but he has done absolutely nothing to move legislation,” said Hudak. “This is just more empty rhetoric from a president who is vague on this issue.”

Gardner is hoping he can persuade more of his conservative colleagues to join the crusade by framing the issue as one of state’s rights. Several Republicans, including Reps. Dana Rohrabacher of Costa Mesa and Don Young of Alaska, are demanding an end to federal marijuana laws that intrude on the states. Their movement is slowly growing in Congress.

“This is a chance for us to express that federalism works,” said Gardner, who like some other Republicans was not a proponent of marijuana but took up the cause after his state’s voters endorsed legalization, “to take an idea that states have led with and provide a solution that allows them to continue to lead.”

evan.halper@latimes.com

Follow me: @evanhalper

UPDATES:

2:10 p.m.: This article was updated with additional analysis and reaction.

This article was originally published at 8:50 a.m.