[Author note: this post was written by Wendel Rosen attorney Wendy Manley.]

Just weeks after a court determined that a Proposition 65 (Prop 65) warning is required for acrylamide in coffee, a California appellate court ruled a warning is NOT required for acrylamide in breakfast cereals.  Acrylamide is listed as a carcinogen by the State of California and, consequently, a warning must be provided before exposing California consumers to acrylamide.

Warning exemption pending for acrylamide in coffee 

Not surprisingly, the coffee decision created a high degree of confusion and disbelief among dedicated coffee drinkers who, just months earlier, embraced the good news that coffee may protect against certain cancers.  In June, the International Agency for Research on Cancer (IARC) released a monograph that reviewed more than 1,000 studies of coffee and cancer.  IRAC concluded that coffee is associated with a reduced risk of liver and uterine cancer and there is inadequate evidence that coffee causes cancer.  In other words, the scientific studies show that while acrylamide causes cancer, coffee — which contains acrylamide — does not.

Recognizing that the Prop 65 warning requirement cannot be reconciled with the science, OEHHA (the Office of Environmental Health Hazard Assessment) immediately proposed a new (and still pending) regulation exempting coffee from Prop 65 warning requirements with respect to acrylamide and certain other chemicals.  The proposed rule states: “Exposures to listed chemicals in coffee created by and  inherent in the processes of roasting coffee beans or brewing coffee do not pose a significant risk of cancer.”  In its Initial Statement of Reasons supporting the rule, OEHHA identifies other Prop 65 chemicals formed in the brewing of coffee that would be encompassed by the exemption, including acetaldehyde, furfuryl alcohol, formaldehyde, naphthalene, and several chemicals with polysyllabic, tongue-twisting names.

The coffee research highlights a gap in Prop 65’s science: the mere presence of a chemical known to cause cancer (even at levels above what is believed to be safe), does not necessarily equate to a risk of cancer from exposure to an item that contains that chemical.  Most products, unlike coffee, have not been exhaustively studied for cancer risk, and few manufacturers either have or are willing to expend the resources necessary to undertake a comprehensive risk assessment to determine whether a product containing a Prop 65 chemical in fact presents a risk of cancer or reproductive toxicity under Prop 65.  As a result, many warnings are not supported by science, and some may not be supportable were the research performed.  To add further uncertainty, OEHHA has not established “safe harbor” levels for most of the more than 900 chemicals listed under Prop 65, making it even more difficult for manufacturers to complete a risk assessment.

OEHHA will hold a hearing on the proposed coffee warning exemption on August 16, 2018, and will accept comments through August 30, 2018.  Follow developments on the OEHHA website.

Warning requirement for acrylamide in breakfast cereal preempted

In another recent decision, a court determined that Prop 65 warnings are NOT required for breakfast cereal.  The basis for the decision was the principle of federal preemption: states cannot implement laws that conflict with federal laws.  The court found that Prop 65 poses an obstacle to the accomplishment and execution of a policy under federal law in which the Food and Drug Administration (FDA) promotes whole grain foods in the American diet.  When there is no express preemption provision in federal law, the court examines the entire scheme of a federal statute for implied preemption, and if the court determines that its purpose and operation are frustrated by the state law, then the state law is preempted.  In Post Foods v. Superior Court, the court found Prop 65 is an obstacle to the accomplishment and execution of the FDA policy of promoting whole grain foods in the American diet.

Although most cereals contain acrylamide at a level that would require a Prop 65 warning, whole grains are a significant source of important vitamins, minerals and fiber.  Based on research demonstrating the health benefits of whole grains, the FDA established a policy to promote the consumption of whole grains.

FDA described its policy in two letters to OEHHA and the Attorney General in 2003 and 2006 advising against acrylamide warnings on food.  FDA was concerned that labeling foods with warnings about dangerous levels of acrylamide would confuse and potentially mislead consumers, both because the labeling would be so broad as to be meaningless and because the risk of consumption of acrylamide in food is not yet clear.  FDA also worried the warning would dilute its messaging about healthy eating, mislead consumers into thinking acrylamide is only a hazard in store-bought foods, and ultimately cause consumers to avoid grains (specifically breads and cereals), potentially increasing their risks of disease from less fiber and other beneficial nutrients in their diets.  FDA concluded that Prop 65 warnings on foods would “conflict with FDA’s ongoing efforts to provide consumers with effective scientifically based risk communication to prevent disease and promote health.”  FDA’s advised that Prop 65 warnings for acrylamide should not be placed on foods, including breakfast cereals, unless and until the science supports such a warning.  FDA noted that even if acrylamide warnings became warranted, FDA may require manufacturers (as it does with trans fats) to identify foods containing acrylamide and the amount based on quantities consumed.

The Second District Court of Appeal found FDA’s letters thorough, consistent, and containing persuasive reasoning why Prop 65 acrylamide warnings on whole grain cereals would mislead consumers and lead to health detriments.  Prop 65 warnings, it concluded, conflict with a clear federal program to encourage healthy eating by consumers, and so is preempted.

Under the Post Foods case, breakfast cereals are now exempt from Prop 65 warnings (pending any potential appeal).  The exemption should extend to other grain products such as bread and granola bars, and arguably to other foods encompassed by FDA’s letters, but it is not generally felt that the decision will discourage all Prop 65 food claims based on acrylamide.  The decision may also invigorate other defendants to pursue federal preemption arguments, given appropriate supportive facts.

[Special thank you to guest contributor Ana Orozco for this post.]

Three weeks have passed since the three agencies overseeing the implementation of California’s new cannabis laws introduced their Proposed Permanent Cannabis Regulations and kicked off a 45-day public comment period. This means that Californians have roughly three weeks left to submit comments in writing, or at public hearings held throughout the state, that could modify the draft permanent regulations. The public review and comment period invites input from the general public and cannabis operators, as well as local governments.

One new and notable draft regulation strongly opposed by local governments and their representatives in Sacramento is the proposed expansion of delivery services to all cities and counties. When voters approved Proposition 64, local jurisdictions understood that the regulations implementing the proposition would give them broad discretion to regulate recreational cannabis, including prohibiting it altogether. However, when state agencies adopted the initial “emergency” regulations they did not address whether local jurisdictions could restrict the delivery of cannabis in their jurisdiction. The Proposed Permanent Cannabis Regulations clarify this ambiguity by stating “A delivery employee may deliver to any jurisdiction within the State of California.”

Not surprisingly, a vocal opponent of the draft permanent regulations is the League of California Cities, which deems protecting local authority in the state’s new cannabis laws a priority under its 2018 Strategic Goals. On July 26, 2018, the League of California Cities submitted a letter to the Bureau of Cannabis Control stating its opposition to the draft and concerns about maintaining local control. Specifically, the letter emphasizes Proposition 64’s stated intent to give cities authority over all commercial cannabis activity, highlights the financial costs cities face in protecting public safety, and questions the Bureau of Cannabis Control’s regulatory power to alter the statutory provisions.

The League’s reasoning against the draft permanent regulations echoes its opposition to Senate Bill 1302 – which also would have allowed cannabis delivery in all jurisdictions – and likely previews the feedback cities and counties will provide during the public comment period. SB 1302 was ordered inactive by its author, Senator Ricardo Lara one month before the draft permanent regulations were introduced. However, the opposition to SB 1302 sheds light on the groups that would oppose the draft permanent regulations. To list a few, SB 1302 was opposed by the California Police Chiefs Association, Urban Counties of California, Rural County Representatives of California, and California State Association of Counties. In a joint letter to Senator Lara, these organizations expressed their concerns about losing local control and fears of “a race to the bottom” effect, in which cannabis sellers flock to jurisdictions with permissive cannabis regulations and low taxes, creating over-concentrated cannabis commerce and monopolies in those jurisdictions.

While no formal statements regarding the draft permanent regulations have been issued by local government organizations, it is expected that they will use the same reasoning as in SB 1302 to oppose the provisions in the draft permanent regulations allowing the delivery of cannabis in all jurisdictions. The contentious discussion will continue  at the upcoming public hearings.

State regulators recently issued long-awaited draft permanent regulations for California’s cannabis industry, including some changes that could have an immediate impact on license-seekers and others that will shape the industry for many years to come.

Once the draft permanent regulations become law, they will replace the “emergency” rules that have governed the state’s cannabis industry since November 2017. A 45-day comment period kicked off Friday, during which the three state agencies overseeing legalized cannabis will consider public input and possible modifications before endorsing final rules.

While some recently-revealed changes to the draft permanent regulations are merely refinements of earlier provisions, others are new. For instance, the state will end the practice of  issuing 90-day temporary cannabis licenses on December 31, 2018, placing a hard deadline on many operators who still are far from obtaining their standard licenses. This means that all temporary licenses will expire by the end of March 2019 and businesses without a standard licensed will have to shut down.

A short list of other highlights is as follows:

• License transfer through ownership change: As part of a 100% business ownership change, the Bureau of Cannabis Control (regulating distributors, testing labs, and microbusinesses), will prohibit a purchaser from operating the company it buys until a new license application has been approved by the Bureau. This rule could cause business interruption as the new owner awaits the Bureau’s application review. The Dept. of Food and Agriculture (cultivation) and the Dept. of Public Health (manufacturing) each have separate and somewhat less onerous rules on this issue.
• Expanded delivery services: Previous drafts stated that cities could not stop delivery services from using public roads. The permanent regulations clarify that “a delivery employee may deliver to any jurisdiction within the State of California.” This modification addresses the interpretation by some city attorneys that cities could ban deliveries within their limits, and at the same time, not impede the use of public roads.
• CEQA: All of the relevant state regulatory agencies clarified that they will require applicants to provide evidence that their operations comply with the California Environmental Quality Act or that they are exempt from the Act. If neither can be shown, the applicant must provide information to enable an agency to determine the appropriate level of environmental review. This could trigger expensive and time consuming studies about an operator’s environmental impacts and mitigations.
• Still no one-acre cap per grower: A much-touted restriction to protect small cultivators was removed in the drafting of emergency regulations back in 2017, generating a hue and cry from small farmers and a lawsuit by the California Growers Association. But, to no avail thus far. The draft permanent regulations do not reinstate the one-acre cap.

Other important changes can be found in the draft regulations, including the Bureau’s 136 pages of rules, the Department of Health’s 111-page draft and the Department of Food and Agriculture’s 68-page document. They, no doubt, will make for interesting discussions at public hearings over the next six weeks at ten locations across the state.

My favorite Megan Mullally quote, and there are many, is her ode to coffee: “I’ll quit coffee. It won’t be easy drinking my Bailey’s straight, but I’ll get used to it. It’ll still be the best part of waking up.”

Wendel Rosen attorney, Wendy Manley, recently wrote about the new labeling requirements for coffee. As she noted, a California court recently determined that coffee must bear a warning under the state’s Safe Drinking Water and Toxic Enforcement Act (aka “Prop 65”) regarding acrylamide, a carcinogen found in low levels in coffee due to the roasting and/or brewing process. As it turns out, things may not be so dire after all, and coffee lovers may soon raise a mug to celebrate California regulators.

On Friday, June 15, the Office of Environmental Health Hazard Assessment (OEHHA) proposed to add a new section of the California Code of Regulation, stating that no significant risk of cancer is presented by drinking coffee. OEHHA is the lead state agency that implements Prop 65 and has the authority to promulgate and amend regulations pertaining to it. Citing to the International Agency for Research on Cancer (IARC) in its press release, OEHHA justified its proposed regulation, in part, on the IARC’s conclusion that drinking coffee does not present a significant risk of cancer. Thus, while acrylamide is designated as a probable human carcinogen, a cup of joe is not considered to be, according to IARC research.

This conclusion isn’t surprising to the coffee industry. In 2016, the cancer agency of the World Health Organization removed coffee from its “possible carcinogen” list, and there have been numerous published studies touting the potential health benefits of drinking coffee over the years.

OEHHA maintains that its proposed regulation will benefit “the health and welfare of California residents by helping to avoid cancer warnings for chemicals in coffee that do not pose a significant cancer risk.” One can’t help but wonder, though, if this regulatory about face is intended to benefit Prop 65, too. As reported in Law360 (a subscription is required), a bipartisan group of members of the U.S. Senate and the U.S. House of Representatives may be looking to undermine labeling requirements on the federal, state and local levels, and in particular, Prop 65, by requiring that labels clearly identify potential cancer risks of products based on the “best available science.”

The proposed legislation, H.R. 6022 and S. 3019, would require labeling warnings that are supported by science that is based upon objective scientific practices, which includes findings and data that are reliable and peer reviewed when possible. According to Rep. Adam Kinzinger (R-Ill.), the proposed federal legislation is intended to counter state laws that may cause some products to be “incorrectly labeled with warnings about harms that do not exist.”

To be sure, the fight over coffee and the scope of Prop 65 will not end soon. Public comment on the proposed regulation will be open until August 30, 2018, likely fielding comments for and against the regulation. Should OEHHA’s proposed regulatory change pass, it is also likely that it would be challenged in court. And, given the detractors of Prop 65 both in and outside of California, a challenge to OEHHA’s proposal may be the least concern. Congress rarely agrees on much these days, but they definitely seem jittery over the recent efforts to regulate their morning cup. So, we’ll continue to monitor this potential food fight and keep you posted.  For now, just “sip” back and relax.

Wendel Rosen attorney, Eugene Pak, will be attending the National Conference of State Liquor Administrators in Waikoloa, Hawaii from June 17-20, 2018. He’ll be there to hear all about “Regulatory Strategies for an Innovative Marketplace” – this year’s conference theme – and we can’t wait to get his take on it when he returns to sunny California. And, if you will be attending the conference, make sure to say “Aloha!” to Eugene.

On May 11, 2018, the California Department of Tax and Fee Administration (CDTFA) released its cannabis tax revenue numbers for the first quarter of 2018. These numbers fall short of the high expectations of industry analysts and the state. The CDTFA reports that it has collected a total of $60.9 million from licensed cannabis operators in Q1. This amount includes the state’s cultivation, excise and sales taxes, but does not include local tax revenue collected by cities or counties. Breaking it down a bit further, the excise tax generated $32 million, the cultivation tax brought in a mere $1.6 million, and the sales tax generated $27.3 million. Medicinal cannabis sales are exempt from sales tax if the purchaser holds a valid Medical Marijuana Identification card.

In addition to regulation and the elimination of the black market, the promise of tax revenues  was a major force behind the passage of Prop 64 back in 2016. The governor’s budget proposal had predicted $175 million in revenue in the first six months of 2018, which has proven to be optimistic based on the first quarter results. Two prime culprits for the tax shortfall may be suppressed sales volumes due to competition from healthy gray and black markets and fewer tax paying operators due to widespread local government bans on commercial cannabis activity and major delays in those jurisdictions that are allowing commercial cannabis.

In addition to competing with leaner gray and black market competitors, compliant operators face strict zoning requirements, slow and reticent local permitting bodies, and moratoriums on commercial cannabis activity. These obstacles result in fewer regulated operators, fewer sales, and fewer tax dollars. The expected tax revenue will only come if the cannabis industry is able to launch at scale and thrive. Imposing high taxes on a fledgling industry, much of it still emerging from the gray and black markets, is not an ideal way to encourage transitioning and new operators to jump through the numerous hoops set up by state and local governments. Local prohibitions on commercial cannabis exist in 70-80% of local jurisdictions. This means that operators are flooding those few jurisdictions that are permitting commercial cannabis activity with applications, resulting in delays.

The CDTFA’s report may have already put a damper on AB 3157, a bill  currently in committee that, if passed, would reduce the excise tax to 11% and eliminate the cultivation tax until June 2021. A recent addition to the bill allows the Legislature to restore the excise tax rate to 15% if the revenues collected from the excise tax are “insufficient to adequately fund the reasonable regulatory costs” outlined in the Revenue and Taxation Code. This language seriously weakens AB 3157 and puts a significant amount of pressure on a brand new industry.

[This post was written by Wendel Rosen environmental attorney Wendy Manley.]

Coffee drinkers were pleasantly surprised recently to learn their daily beverage may afford a number of health benefits. The beverage contains antioxidants and nutrients, and may protect against Type 2 diabetes, Parkinson’s, Alzheimer’s and liver cancer. Make that a double latte, please.

            NEWS FLASH:

Warning: coffee contains acrylamide, a chemical known by the State of California to cause cancer.

What just happened?

In short, after eight years of litigation, a California court determined that coffee must bear a warning under the state’s Safe Drinking Water and Toxic Enforcement Act, otherwise known as Proposition 65 or “Prop 65.”

Prop 65 was enacted by voters in 1986 with the objective of eliminating toxic chemicals in consumer products by requiring a warning before exposing a person in California to a chemical listed by the State as causing cancer or reproductive toxicity. If your product contains a listed chemical, it may need a Prop 65 Warning.

While there have been some success stories – trichloroethylene out of correction fluid and lead out of wine bottle caps, jewelry, brass faucets, calcium supplements and ceramic ware, for example – Prop 65 has spawned a cottage industry of citizen enforcers, some of which seek to safeguard human health, others of which are motivated by the reward of penalties and attorney fees.

There are more than 900 chemicals on the Prop 65 List that cause cancer or reproductive toxicity or both. In a few cases, the state has set a “safe harbor” level below which no warning is required. Plaintiffs can initiate an enforcement suit based on a lab test showing the presence of a listed chemical, and the burden falls to the defendant to prove the exposure poses “no significant risk,” which is one excess case of cancer in an exposed population of 100,000 assuming a 70 year lifetime of exposure at that level. The risk assessment needed to establish the no significant risk level (NSRL) is complicated, expensive, and vulnerable to attack in a courtroom. Consequently, the vast majority of cases are settled regardless of the merits of the claim.

Acrylamide was added to the Proposition 65 list in 1990, but not discovered in food until 2002. Since that time, more than 650 Prop 65 claims have been brought for failure to warn about acrylamide in a wide range of food products, including french fries, potato chips, sweet potato chips, vegetable chips, hash browns, bread, bagels, English muffins, breakfast cereals, granola bars, animal crackers, ginger snap cookies, molasses, toasted almonds, black olives, and coffee.

A listed chemical is often times present as an ingredient or contaminant. In many cases, such as lead or cadmium in chocolate or seaweed, it is naturally occurring, and exempt from the Prop 65 warning. Acrylamide is unusual in that it is neither added to coffee nor does it occur naturally – it is created during roasting. Cooking at high temperatures, including frying, roasting and baking, transforms sugars and the amino acid asparagine into acrylamide through the Maillard reaction. Consequently, acrylamide is unavoidable in conventional coffee roasting techniques.

Back to the coffee case. In Council for Education and Research on Toxics v. Starbucks, defendants first argued and lost several defenses based on the NSRL, First Amendment and preemption by federal law. In the second phase of the trial, which concluded in January 2018, defendants argued a rarely utilized defense involving an Alternative Significant Risk Level (ASRL) based on considerations of public health. The regulations provide that “where chemicals in food are produced by cooking necessary to render food palatable or to avoid microbiological contamination,” considerations of public health allow for an ASRL.

The Coffee defendants’ risk assessment calculated an ASRL of 19 micrograms per day, which was an order of magnitude higher than the State’s established NSRL of 0.2 micrograms per day.

To their disappointment, the coffee producers failed to persuade the judge that the ASRL should apply. The court found their expert’s quantitative risk assessment deficient, analytical chemistry methods unacceptable, evidence of health benefits unpersuasive, and the minimum quantity of acrylamide necessary to render the coffee palatable unsubstantiated, among other things. In their objections to the proposed Order, the defendants took issue with a number of the court’s findings and regulatory interpretations. Although the plaintiff immediately filed a motion for permanent injunction, it is widely expected that some or all of the defendants, which total 91, will appeal.

Just as Yogi Berra famously said, it ain’t over till it’s over. If the case is appealed, it will likely be quite some time before we know whether a Prop 65 warning is required for acrylamide in coffee. If a warning is ultimately required, specific warning language may be developed for coffee. Meanwhile, high doses of acrylamide administered to rodents suggests acrylamide may cause cancer in humans, but questions still remain whether one can even drink enough coffee to raise the risk or whether the health benefits more than offset the potential risks.

Food producers investigating acrylamide in their products need to think more broadly, since furfural alcohol is also a Prop 65 chemical generated from the Malliard reaction during cooking. And the Prop 65 plaintiff’s bar knows about it.

A legislative proposal to create a limited-service banking system for the California cannabis industry crossed an important hurdle last week when the State Senate Bank and Financial Institutions Committee unanimously approved the bill.

Senate Bill 930’s author State Sen. Robert Hertzberg (D-Van Nuys) introduced the bill on Jan. 25, 2018 to address the fact that the federal prohibition on marijuana makes traditional banking difficult for most California cannabis businesses. It would provide for “cannabis limited charter banks,” that could issue certified checks to pay state and local taxes, rent and vendors serving cannabis businesses. The bill is fairly general and would likely change and become more detailed were it to be approved by the State Legislature.

U.S. Treasury Department guidelines allow federally-chartered banks to serve cannabis clients, but require such banks to maintain records and issue special reports specifically on cannabis accounts. As a result, most commercial cannabis operators have chosen to transact in cash. This causes numerous practical challenges, including the need to transport and store large amounts of cash and the inability to write checks or make direct electronic deposits.

SB 930 addresses some of the banking issues facing cannabis businesses, but not all. The bill notes that cannabis limited charter banks will not be prohibited by the state from “obtaining private insurance,” but does not create a state-backed financial insurance option that would replace the Federal Deposit Insurance Corporation. In addition, the bill would limit payment options to paper checks, because electronic fund transfers are regulated by the federal Electronic Fund Transfer Act, placing any electronic transfers under federal authority.

Under SB 930, the California Department of Business Oversight would oversee the new limited banking system, but the department has not taken a position on Hertzberg’s bill. Last year, the department discussed setting up a network of financial institutions that would guarantee to federal banking regulators that the accounts they hold are subject to special tracking, oversight and transparency, but nothing concrete has come of those discussions.

We previously wrote about when the FDA postponed restaurant nutritional labeling requirements at the 11^th hour. In Act II today, the FDA extended the compliance date for food manufacturers to update their nutrition labels by eighteen months.

Different Administration, Different FDA

In 2016, under the Obama Administration, the FDA published two final rules: the “Nutrition Facts Label Final Rule” and the “Serving Size Final Rule.” The Obama FDA set the deadline for compliance with these two rules for July 2018 for manufacturers with $10 million or more in annual food sales and for July 2019 for manufacturers with less than $10 million.

In June 2017, the FDA under the Trump Administration announced an indefinite delay in the launch of these initiatives. The FDA published a final rule on May 4, 2018, extending the deadline “in response to concern that companies and trade associations have shared with us regarding the time needed for implementation of the final rules and the need for FDA to provide further guidance to manufacturers subject to the final rules.” The  new compliance deadline is now January 1, 2020 for manufacturers with $10 million or more in food sales, and manufacturers with less than $10 million get even more time – until January 1, 2021 – to comply.

The Nutrition Facts Label Final Rule was intended to “improve how the nutrition information is presented to consumers” to “help consumers maintain healthy dietary practices.” It required manufacturers to make a number of changes to their labels including providing more detailed information regarding calories and nutritional context in the form of Daily Reference Values.

The Serving Size Final Rule was intended to “ensure that serving sizes are based on current consumption data and to provide consumers with information on the Nutrition Facts label related to the serving size that will assist them in maintaining healthy dietary practices.” It required all containers over a minimal threshold of Reference Amounts Customarily Consumed (in my house an entire can of Pringles or a pint of Three Twins ice cream) to be labeled as a single-serving container.

Keeping Today’s FDA Action in Perspective

While intense lobbying from some food and beverage industry trade groups has resulted in the delays to changes in the Nutrition Facts Panels and serving sizes, not every manufacturer has been sitting idly by. Manufacturers of all sizes have been early adopters in implementing these changes. When you go to the grocery store, take a little extra time to review the packages of the foods that you routinely buy. Chances are, you will see a mixture of new and old Nutrition Facts Panel formats.

While consumers and health advocates see the delays as a significant public policy gaffe by the FDA, FDA Commissioner Dr. Scott Gottlieb has stated that the FDA will be implementing other changes previously championed by the former Obama Administration such as sodium reduction targets for food products, and caloric disclosures on chain restaurant menus. According to the FDA, the changes that consumers will see are intended to educate everyone as to the link between diet and chronic diseases such as obesity and heart disease. Wherever you fall on the “need” for these rule change delays, gaining a better understanding that what we eat matters is a healthy goal for all of us.

Congress recently failed to protect the recreational cannabis industry from federal law enforcement, choosing instead to maintain a defense only for cannabis operators in states that have legalized marijuana for medical purposes.

In late March 2018 and with little fanfare, Congress renewed the Rohrabacher-Blumenauer amendment, which since 2014 has offered the medical cannabis industry some shelter from the Department of Justice. The amendment precludes the DOJ from spending funds to prevent states that have legalized medical cannabis “from implementing” their laws. The Ninth Circuit Court of Appeals has interpreted the amendment to mean that the DOJ cannot bring enforcement actions against medical marijuana providers complying with those state’s laws (U.S. v. McIntosh, 2016).

The amendment took on added significance in January when Attorney General Jeff Sessions rescinded the Cole Memo, an Obama-era policy advising the DOJ to take a hands-off approach to states regulating medical cannabis in compliance with a list of federal priorities. In response to Sessions’ announcement, a bi-partisan coalition pushed for a new spending bill amendment that would expand Rohrabacher-Blumenauer to recreational cannabis operators that comply with state regulations.

In February, eighteen U.S. Senators, including Kamala Harris of California, signed a letter to the Senate Committee on Appropriations supporting the new amendment. The senators wrote that rescinding years of guidance (the Cole Memo) has created “disruption, confusion, and uncertainty throughout the country. Citizens who have been acting in good faith based on federal and state assurances now feel exposed. This disruption may deny medications to the sick, push individuals back into illicit markets, and nullify the previously-effective regulations – all while thwarting the democratically-expressed will of the states.”

In the end, the effort to protect legal recreational cannabis operations from DOJ enforcement seems to have suffered from bad timing. The proposal came as Democratic and Republican leaders tried to avoid yet another government shutdown and grapple with other controversial issues vying for a place in the spending bill, such as gun rules and border security.  Many in the cannabis industry remain cautiously optimistic that Congress will eventually expand the Rohrabacher-Blumenauer amendment to protect recreational cannabis in states where it has been legalized.