Will marijuana industry’s expansion plans be slowed by Trump’s AG nominee?

Nov. 8 brought elation to the marijuana industry as Nevada and three other states passed measures that will legalize recreational marijuana use.

That meant more pot sales and more business — more pot farming, more distributors, more pot stores, more employees and more money.

But the industry’s excitement proved short lived, as just days after the election President-elect Donald Trump nominated Alabama Sen. Jeff Sessions, a harsh cannabis critic who said earlier this year that “good people don’t smoke marijuana,” for U.S. Attorney General.

The nod towards Sessions instilled fear and anxiety into Nevada’s budding industry almost instantly.

“No one is calm about the issue,” said Armen Yemenidjian, founder and co-owner of Essence Cannabis Dispensary, which has two locations in Las Vegas and one in Henderson. “The industry is definitely not happy about the appointment and we’re very nervous about what he could potentially do.”

And what Sessions could do as the nation’s top law enforcement official is undo the legalization strides made by the $6.7 billion industry in the past decade with nothing more than a pen and his signature.

In 2013, then-Attorney General Eric Holder’s office issued a directive that established that federal law enforcement would take a more hands-off approach to cannabis prosecutions in states where the drug had been legalized and regulated. If Sessions chooses to retract the so-called Cole Memo he could effectively kill the entire industry.

He could direct the FBI and Drug Enforcement Agency to enforce federal law, where marijuana is still listed as an illegal drug on the same level as heroin and ecstasy, and have cannabis sellers, growers and consumers arrested in states that have legalized the drug for recreational or medicinal use.

Sessions, who still must be confirmed by the Senate, hasn’t made any public comments on marijuana since his nomination was announced, but has been an staunch and outspoken opponent of legalization during his time as a senator.

“We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized, it ought not to be minimized, that it’s in fact a very real danger,” Sessions said in the April during the Senate Caucus on International Control.

But as the dust has settled in the weeks since the election, some in the local marijuana industry are hopeful that things won’t be as bleak as they initially anticipated and aren’t letting the Sessions nomination alter their plans for expanding their businesses to meet the demand for recreational marijuana.

“(Session’s) viewpoints are archaic at best,” said Derek Peterson, CEO of Terra Tech Corp, which owns marijuana shops in Las Vegas and Reno as well as California. But, Peterson added, “I think the fear is a little bit irrational.”

Both Peterson and Yemenidjian think there are a few reasons for optimism going forward.

Trump said on the campaign trail that marijuana should be an issue left for the states to decide. And Sessions himself has been an ardent supporter of the 10th Amendment and states’ rights on several other issues in the past.

And with 28 states having some form of legal cannabis, enacting a nationwide marijuana prohibition could prove to be an unpopular venture. A national Gallup poll conducted in October showed that 60 percent of Americans think the drug should be legal.

“If 60 percent of the country believes that this should be legal, I would hope that a person wouldn’t put his own personal beliefs ahead of what his constituents would like,” Yemenidjian said.

As Peterson puts it, “Pandora’s box is open,” so his company is moving forward with its plans to expand in the legal recreational markets that are coming to Nevada and California.

According to a report by Las Vegas-based RCG Economics released in July, legalized marijuana will generate an estimated $1.1 billion in annual economic impact and create as many as 6,200 jobs in Nevada by 2024.

Terra Tech currently has 180 employees between its growing facilities and dispensaries between their Nevada and California operations, according to Peterson. That number will double within the next 12 to 18 months, he said, as the company expands its growing facilities to meet the higher product demands and moves to open more storefronts.

Legalization comes just in time, Peterson said, because the medical cannabis industry in Nevada just hasn’t taken off as quickly as expected.

There are just over 25,000 medical marijuana cardholders in the Silver State, a small customer base for the more than 50 dispensaries that have been vying for their business.

“A lot of people made huge investments. And frankly, business is slow,” Peterson said.

But the legalization of recreational adult-use cannabis should fast-track the industry’s growth and offers a beacon of hope for those who invested heavily in Nevada’s medical market.

“This is lifeblood for us.”

Contact Colton Lochhead at clochhead@reviewjournal.com or 702-383-4638. Follow @ColtonLochhead on Twitter.