January 10, 2018

Federal changes cause medical pot dispensaries to nix card transactions

WBJ File
Regulated marijuana companies may not be safe from prosecution.

As state regulators, investors and entrepreneurs ponder what a shift in federal marijuana law enforcement might mean for the burgeoning recreational pot industry here, medical marijuana patients have already felt its effects and are organizing to push back.

Since U.S. Attorney General Jeff Sessions' revocation last Thursday of an Obama-era policy that directed federal prosecutors to essentially look the other way in states that have established regulated markets for legal marijuana, most of the state's medical dispensaries have quickly reverted to cash-only operations.

This week, a majority of the state's 17 open medical marijuana dispensaries notified customers that they would no longer accept debit card payments, with some of them citing a decision by their card payment processor or U.S. Attorney Andrew Lelling's statements saying that no aspect of the state-sanctioned marijuana industry is immune from federal prosecution.

"This directive results from a Statement released earlier today from US Attorney Andrew Lelling stating that he 'cannot provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution,'" John Hillier, executive director of Central Ave Compassionate Care in Ayer, wrote this week in a message to patients. "Folks, unfortunately, this means we are back to CASH ONLY transactions until further notice."

In Good Health of Brockton told its customers online this week that debit card payments would cease "due to federal changes beyond our control," and other dispensaries said their debit card processor instructed them to stop accepting debit card payments. In total, at least nine dispensaries have stopped accepting debit card payments, according to a review of dispensary websites and information compiled online by activist Eric Casey. Dispensaries do not accept credit card payments.

"Medical marijuana patients are already being negatively impacted by the change with one processor who processed debit card transactions no longer processing for dispensaries," the Massachusetts Patient Advocacy Alliance said on its Facebook page. "It will only get worse."

Merchant Services Consulting Group, which handles debit card processing for many Massachusetts dispensaries, did not return a call seeking comment.

Michael Latulippe, development director for MPAA, said the rescission of the so-called Cole Memorandum has "created confusion and fear in the Massachusetts medical marijuana patient population" and patients are already being affected by the change.

"As patients, we've become very accustomed to being able to go in and use our debit cards. I know it doesn't sound like a lot, but for people with debilitating pain, creating extra steps like going to an ATM or a bank can really put up barriers to access for people," Latulippe said. "It's really going to cause a lot of inconveniences for a lot of sick people."

When Sessions rescinded the Cole Memorandum last week, he also rescinded certain banking protections for marijuana businesses and gave Lelling discretion over enforcing federal marijuana laws in the Bay State, where voters in 2016 passed a state law legalizing marijuana for adult recreational use.

Lelling has issued two statements addressing how his office will proceed with federal marijuana law enforcement in light of the new guidance from Sessions. Though lawmakers and activists have bristled at the vagueness of Lelling's statements, the prosecutor has made clear that no aspect of the state-sanctioned marijuana industry will be clear of federal scrutiny.

A 16-year veteran of the Justice Department who took over as U.S. attorney late last month, Lelling said this is "a straightforward rule of law issue" and said he will proceed on a case-by-case basis to determine whether a case is worthy of expending "limited federal resources" to pursue.

Angered by Sessions' action and Lelling's statements, the Massachusetts Patient Advocacy Alliance has organized a "stay away from our medicine" rally and protest outside the federal courthouse in South Boston at 9 a.m. on Thursday morning.

While businesspeople hoping to establish themselves in the legal adult use marijuana here must now consider the possibility that they could be prosecuted under federal law, medical marijuana companies are shielded from federal prosecution by a congressional budget rider.

The Rohrabacher–Blumenauer amendment, which became law as part of a 2014 federal spending bill, prohibits the Department of Justice from using federal monies to interfere with the implementation of medical cannabis programs in states that have approved them. But that protection is set to expire Jan. 19 unless Congress approves a new budget that also includes the Rohrabacher–Blumenauer amendment.

The amendment has been included in the federal budget since 2014, but MPAA said on its Facebook page that "nothing is certain anymore." Other activists are seeking to extend the amendment's protections to adult use marijuana, too.

"The Rohrabacher–Blumenauer amendment ... protects medical marijuana facilities and we are going to be reaching out to the congressional delegation to ask them to make sure that protection is extended to adult use marijuana facilities," Will Luzier, political director for the Marijuana Policy Project of Massachusetts, said Tuesday.

Latulippe said the MPAA hopes the Rohrabacher–Blumenauer amendment is again authorized but noted that it's only a temporary solution for an industry that is growing to now include 30 states.

"Now is also the time for our Massachusetts leaders in the federal government such as Senator Elizabeth Warren, Representative (Seth) Moulton, and Senator (Edward) Markey to take a stand and introduce legislation that will permanently enshrine protections for medical marijuana programs at the federal level," he said.

Activists from both organizations may have a receptive senator in U.S. Sen. Elizabeth Warren, who on Tuesday tweeted, "States have the right to enforce their own marijuana policies – and I'm working on legislation to make sure it stays that way. Stay tuned."

Warren was the target of derision last week by anti-marijuana activist Kevin Sabet, the founder and president of Smart Approaches to Marijuana, after she suggested in a statement that Sessions' decision to rescind the Cole Memorandum would affect medical marijuana patients.

"Confusing medical with non-medical. C'mon. Smarter than that," Sabet tweeted. He later doubled down on his assertion that medical marijuana patients would not be affected by the shift in federal policy in a tweet directed at Cannabis Control Commission member Shaleen Title.

"This will *not* affect any "patients". Just "patents" from Big Pot!" he tweeted at the commissioner.


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