Could Trump’s Administration Be Headed for a Cannabis War?

The possible approval of Jeff Sessions as attorney general concerns marijuana lovers, but billionaire Peter Thiel could tip the scales in their favor.

Taly Krupkin
Taly Krupkin
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A worker removes a branch of buds from a marijuana plant on a farm near Garberville, California, October 12, 2016.
A worker removes a branch of buds from a marijuana plant on a farm near Garberville, California, October 12, 2016.Credit: Rich Pedroncelli, AP
Taly Krupkin
Taly Krupkin

NEW YORK – In the month since the election, disappointed liberals like to joke that at least their friends in California can numb the pain. On November 8, voters in California, Massachusetts, Nevada and Maine chose to legalize recreational marijuana.

But President-elect Donald Trump has picked Alabama Senator Jeff Sessions for attorney general, someone who once said that “good people don’t smoke marijuana.” He has said he thought the Ku Klux Klan “were OK until I found out they smoked pot.”

All this of course concerns supporters of legalizing marijuana; the attorney general has the power to prosecute cannabis businesses and users even in states where marijuana is legal.

But while advocates warn that the Trump administration might snuff out the U.S. marijuana revolution, a different kind of cannabis war might be brewing above Trump Tower’s marble atrium. Billionaire Peter Thiel, a key Trump adviser, was a pioneering investor in the legal cannabis industry.

During the election campaign, Trump said he opposed the legalization of recreational marijuana but believed the decision should be left to the states.

“The cannabis industry is rightly concerned,” says Bruce Barcott, author of “Weed the People: The Future of Legal Marijuana in America.” He’s also deputy editor of the website Leafly, which has been called the “Yelp for pot.”

Entrepreneur and investor Peter Thiel exits an elevator after a meeting at Trump Tower in New York, November 16, 2016. Credit: Eduardo Munoz / Reuters

“Jeff Sessions, if confirmed, could have an effect on the state-legal cannabis industries that have been created in 28 of the 50 states. The current industry relies on a Justice Department policy, not a law,” Barcott told Haaretz.

“In 2013 the Obama administration enacted the Cole Memo, which allowed Colorado and Washington State to proceed with the legalization and regulation of adult-use cannabis, as long as those states adhered to certain guidelines – like preventing out-of-state transport and sales to minors. Sessions could scuttle that memo, and the policy it enacted, during his first few weeks in office if he wants to.”

Legalization advocates have raised similar concerns, and this week an article in Politico warned that “every marijuana grower and dispensary owner who came out of the shadows to become a taxpaying member of the legal recreational cannabis industry in Colorado, Oregon, Washington state and Alaska has exposed himself to potential criminal prosecution by a DOJ run by Sessions.”

Still, Thiel, the cofounder of PayPal, could be the wild card. He made headlines a few years ago when he invested in the cannabis industry.

A venture capital firm in which Thiel is a partner, Founders Fund, has invested millions in Privateer Holdings, a Seattle-based private equity firm that invests in marijuana businesses. One of the ventures is Marley Natural, a cannabis brand it says is “based on the life and legacy of Bob Marley.”

Sen. Jeff Sessions (R-Ala) listens during a meeting on Capitol Hill in Washington, November 29, 2016.Credit: Molly Riley, AP

Another Privateer venture, Tilray, is a mail-order service for medical marijuana based in Canada. It's also setting its sights on the United States and Europe – it started exporting to Croatia a few months ago.

Leafly, the cannabis resource, is yet another of Privateer's projects. It offers information on nearby marijuana dispensaries, along with reviews. New York City has only a few medical dispensaries, but users in Seattle, for example, might need help choosing from the city’s stable of recreational and medical marijuana stores and dispensaries.

Trump is now expected to name two more people close to Thiel to his transition effort: Mark Woolway, the acting chief financial officer at insurance software startup Zenefits, and Kevin Harrington, a managing director at Thiel Capital, according to Forbes. They are expected to assist efforts at the transition at the Treasury Department and the Commerce Department respectively.

According to Bloomberg News, the Trump team is also considering appointing another Silicon Valley investor close to Thiel, Jim O’Neill, as head of the Food and Drug Administration.

In response to Haaretz request, Priveteer Holdings confirmed that “Founders Fund (not Peter himself) invested in Privateer Holdings in December 2014 and continues to be an investor."

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