PP 57 | Cannabis Prohibition

 

Why is cannabis prohibition a waste in so many levels and what does legalization mean for the economy and social justice? These issues are close to the heart of Barry Grissom, who joins Tony Frischknecht in this episode. Barry is the United States Attorney for the district of Kansas from 2010 to 2016. He also works as general counsel for Electrum Partners, where he works with people in the cannabis industry to give them a direction on how they can be successful in whatever endeavor they’re involved in. In this interview, Barry tells us why cannabis legalization is not just a drug enforcement issue – it is an economic and social justice issue that begs to be resolved once and for all.

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The Economic And Social Benefits Of Cannabis Legalization With Former Kansas United States Attorney Barry Grissom

In our lives, I find that it’s tough to know what’s happening behind the curtain. Many of us are always wondering, “I wonder how they do it.” My next guest I’m going to bring on has the insight of being behind the curtain. He was nominated by President Barack Obama to be the US Attorney for the District of Kansas and was unanimously confirmed by the Senate in August 2010. He served in this position until April 2016. I want to welcome Barry Grissom to the show. Barry, how are you doing?

Tony, it’s great to be with you.

Thanks so much for being on. This is a big deal for me because I would say you’re my first political guest. This is fun here. I’m hoping everybody else is excited as much as I am. Barry, you’ve had quite a career. When we were talking, I started going through all the different things that you’ve done over the years and it’s very impressive.

Thank you. It’s been an interesting ride so far and it’s far from over. There are still lots of challenges and fun things ahead.

You fall into an interesting time being a US attorney in the beginning stages of legalization in America. I also know you have some other interests helping people less fortunate, like human trafficking and fair labor. Understanding all these dynamics that are happening in the cannabis world, especially when it comes to social equity that’s happening. These are all little pieces of fighting for the little guy.

We’ve seen all of the unrest and I’ll say the awakening that’s taking place surrounding criminal justice reform. A big piece of that is what I refer to as the silliness of cannabis prohibition. It is a waste on so many levels. It’s a waste of taxpayer’s money. It’s a waste of law enforcement resources, but most importantly, it’s a waste of human capital. Incarcerating our fellow citizens for engaging in conduct that should otherwise be legal like alcohol, to me, doesn’t make good public policy.

There have been several communities, especially out of California, where they’re expunging records, which is amazing. We’ve been looking for something like this for a while. What do you think is sparking that?

It’s a number of things. One in addition to other things you mentioned, I’m also a general counsel for a company called Electrum Partners. We work with people in the cannabis universe and give them a direction on how they can be successful in whatever endeavor they’re involved in that universe. When I first became aware of what I might be able to bring to the discussion, that was about six weeks before I left the US Attorney’s office. I was in DC and I went down on K Street where the lobbyists live, and I went to the headquarters of NORML. I walked in and I said, “My name is Barry Grissom. I’m United States Attorney for the District of Kansas. I’m here to help you. What can I do? I’m going to be leaving in six weeks.”

PP 57 | Cannabis Prohibition

Cannabis Prohibition: We will be a much better society if we can admit that cannabis is something that people want to use.

 

After they peel themselves off the wall because I was looking every bit, the part of the Fed. My dark suit, red tie, and white shirt with my little brass lapel button and said, “Department of Justice,” I met Keith Stroup who started NORML back in 1970. Keith said, “We’re going to have a conference in Aspen. We have it every year and people get their continuing legal education credits there as well as other items.” When I went into that conference and the way you started off your interview, I was the very first former federal prosecutor to speak to a group like NORML. I have to admit, I had certain preconceived notions of who might be attending that.

The thing that surprised me in a very positive way was the number of people who were looking at it from not only a business perspective. There were venture capitalists there to be sure, but also from a social justice perspective. In the past few years, there’s a bit of raised consciousness about what is social justice and how we can attain that. Issues surrounding cannabis prohibition is a part of that effort that we can make and we can change so that we don’t do things that from my perspective were bad public policy for all communities. Not just communities of color or underprivileged people, but for all of us. We will be a much better society if we can admit that this is something that people want to use. The classic line is it’s a gateway drug. That’s foolish of saying beer is a gateway drug to alcoholism.

We don’t penalize people for owning beer or possessing beer or having beer in their homes. We need to have a discussion that’s data-driven. That’s also another part of this. The discussion now, it’s not red state, blue state kinds of stuff. It’s about libertarians. It’s about what I should be allowed to do as an adult if I’m responsible in my own home with my friends. What I was calling an adult approach has awakened a lot of people. We’re starting to see that on the federal as well as the state level. The majority of states have some level whether it’s recreational or medical use.

We see lots of legislation. I know Cory Booker, the Senator of New Jersey, he has a great piece of legislation that says, “Take it off of being a Schedule I drug.” As most of your readers know, there is a federal Controlled Substances Act and they have different schedules for different kinds of drugs. Schedule I is heroin and marijuana. You’ve got to remember when that was done, that was done by Richard Nixon in 1970. If you read John Ehrlichman’s book, they did it for the sole purpose of going after communities of color, going after what they saw were antiwar people. That’s the only reason why it’s there.

Do you think that’s why it’s not legalized yet because they’re still trying to get through this old bureaucracy that has been on the books for so long?

I can’t remember what Supreme Court justice said that the states are the laboratories of democracy. We see the changes happening have been at the state level primarily. It’s important to also realize if it was legalized, it was done through referenda. The people are way ahead of the politicians on this. Now politicians are catching up. When you look back in 1970, when 13% of the people, according to Gallup thought it should be legalized compared to now, which is almost 70%. It’s across the board, Republicans, Democrats, Independents. It’s something that if you are a politician and you maintain the status quo, you do that at your peril. Now is the time to make that change. We’re starting to see that and more and more laws and legislation are being passed at the state and the federal level.

That was Jim Cole. It’s called the Cole Memo. I was at the department at that time and we had a discussion about what were we going to do with all of these different states that were on track through referenda to legalize cannabis use, particularly Colorado. At that time, the US attorney in Colorado, a great guy, John Walsh, said, “We need to address this because if we don’t, then we’re going to be forced under preemption to go into a state. We take a right away from the citizens of that state who overwhelmingly said, ‘We want this.’” There was a working group formed at DOJ, and they drafted up what eventually became known as the Cole Memo. Jim Cole was the Deputy Attorney General under Eric at that time.

Anytime there’s a change, the DAG, as he or she is referred to, signs off on it. Jim signed off on the infamous Cole Memo. The brilliance of it, it’s very straightforward. It’s very common sense. It basically says if a state chooses to have some form of use, whether it be recreational, whether it be medical, if there is a system in place much like if you’re trying to get a liquor license. It says you can’t engage in criminal activity. You can’t sell the minors. You can’t use this money or have other people involved in the process who are involved in criminal enterprises. It’s the same question you have to answer if you’re getting a liquor license in your state. The Cole Memo said if you do those things, we will not preempt.

That created the stability that was so much lacking in the industry at that time.

Of course, our big fear was when Mr. Trump won the presidency. We found out that Senator Jeff Sessions was going to be the Attorney General of the United States. We were buckling up for a very bumpy ride, but surprisingly Sessions said, “I’m going to defer to each US attorney.” There are 93 US attorneys because there are 93 federal judicial districts. We have to have one in each district. He said, “I’m going to defer to whatever that US attorney wants.” We were talking about stability. Now we don’t have stability. We have 93 interpretations. Luckily and fortunately, for the most part, people have taken a step back and let what was already in place continue to go forward. I know Colorado, the four districts and California, other states that have provided for recreation or medical use, nobody’s run out, to the best of my knowledge, in this administration and shut down a bunch of dispensaries, which is great.

Cannabis prohibition is a waste of taxpayer's money, a waste of law enforcement resources, but most importantly, a waste of human capital. Click To Tweet

Was one thing that we were talking about in our association groups, these were our marching orders. We followed this and we kept everything on the up and up. That allowed us to do business and gave us that stability. It was the first time that the Feds acknowledged us as something of what a business should look like.

I haven’t seen the new numbers, but when you go back and you look at 2017, the total cannabis-related sales in the State of Colorado was $1.5 billion. What that tells me as a former federal prosecutor is $1.5 billion didn’t go to bad guys. It didn’t go to cartels. It went to entrepreneurs who created over 20,000 new, full-time jobs that paid a living wage and provided the new tax revenue source for the state. I see that as a win-win proposition. The idea that we have now taken that element out of the cartel’s portfolio is a huge win for law enforcement.

I know there’s still a fair amount of black market happening across the state, but not to the scale of what it was. It’s not even close.

We still have people up in the hills who are making the liquor illegally. You’re always going to have that. That’s not going to go away, but as the industry matures, and you’ll agree with me from your experience, it’s come a long way in a very short period of time from a business maturity perspective. As it continues to mature, it will be treated like a Coors beer company or Budweiser. As we’re seeing in Canada and what they’ve done and the amount of American money, I believe, from Coca-Cola, Philip Morris, people like that, that they’ve invested in that market. It’s like sitting on the sidelines, if you will.

Some people saying like vultures, but I won’t go that far. Sitting on the sidelines, waiting to swoop in to the American market once it’s off that Schedule I because aside from the criminal aspects of it, it prohibits you from banking. If you’re in Colorado and you have a dispensary or in another state where recreational use is provided for and you’re operating on a cash basis, that in and of itself makes you a target for criminal activity. Why rob a liquor store that has a couple of thousand dollars and you can knock over dispensary that has tens of thousands of dollars on any given day. As a friend of mine in Colorado said, “The fastest growing business in Colorado isn’t the cannabis business. It’s a security business.” Police officers leaving after they’ve been on the force for 5, 10, 15 years, taking all that institutional knowledge. Now they have a 9:00 to 5:00 job. They’re not breaking up domestic violence. They’re not walking into places. It’s a completely different dynamic, but we need to have the change in the banking laws so that banks can lend capital. People can deposit their money like any other business. If you own a dispensary, because it’s still an illegal drug under the Controlled Substances Act, you can’t write any of that off from a tax standpoint.

It still boggles my mind to this day. Since 2012 in state, it has been legal here. Even I tell some of my friends, I’m like, “They still can’t write off normal expenses.” They’re like, “What are you talking about?” I explained it to them and they’re like, “Why can’t they do that?” I said, “It’s federally illegal.” I could go into that. That’s a long conversation, bankruptcy and all that stuff, but I did have one question for you that I don’t want to forget about asking. How was it to work with Eric Holder?

He is a fantastic guy. He’s a great leader. His time at the justice department will be looked back on and thought of almost in the same way that we think about Robert Kennedy’s time at the justice department. He implemented what is known as smart on crime the way you approach prosecution. Before Attorney General Holder took the position, if you were a line prosecutor, what you were ordered in effect mandated to do was you charged the highest, most provable offense you could. That meant if you had a conspiracy theory and you’re going after Mr. Big over here, who’s getting rich. There’s some kid in Lawrence, Kansas who’s selling 2 pounds of cannabis that came originally from that chain of people from Mr. Big. A kid in Lawrence, Kansas gets to do ten years like Mr. Big.

Holder said, “Let’s be more circumspect. Let’s look at what’s the more appropriate way to go after the kid in Lawrence, Kansas versus Mr. Big. Mr. Big may need to go away. The kid in Lawrence, Kansas might need to be referred to state prosecution or charged with a lesser offense for some time. If he truly has a drug dependency problem, maybe we need to get him into treatment.” We had all these options and that was something that AG Holder pushed hard for. Under AG Holder, they rebuilt the Civil Rights Division of the Department of Justice, which is the gold standard of DOJ after it was gutted by the Bush administration. Sadly, it’s been gutted again, and hopefully, we’ll be able to rebuild it during the next administration. Attorney General Holder is an amazing guy. He is involved with President Obama with a group that is trying to help Democrats win legislative seats at the state level because in 2021, we’re going to have redistricting. One of the major reasons why the Republicans were so successful was that in the last time, they gerrymandered a lot of state seats, two or more Democrats would vote in the statewide election, but when you saw how they can cut up, more Republicans won. He’s been involved in pushing back on issues surrounding voter suppression and gerrymandering.

To go back to a few steps, as a prosecutor going for the highest level of prosecution, can you explain to me a little bit more in-depth on how that is when you go to charge somebody that’s maybe moving 1,000 pounds or 100 pounds because it’s a layer. As you go, you basically build all the way up. From my experience, I’ve seen some of this.

PP 57 | Cannabis Prohibition

Cannabis Prohibition: Even if cannabis become big and money comes in and takes it over, it’s still going to be lots of money to be made and opportunities to provide jobs for people.

 

Let’s talk about methamphetamine or heroin. We can agree that those are substantially different substances as compared to cannabis. If you want to go after whoever is manufacturing, creating, distributing something like methamphetamine, and you have somebody who is, to use a common phrase, a street dealer. You might go in and put pressure on that person through a charge in hopes that that person to save himself or herself. To get that charge may be reduced or a recommendation that under the sentencing guidelines, that because of their assisting in the prosecution, finding someone else to prosecute is further up the chain, they get a consideration. Oftentimes that’s how it works.

Going back to Attorney General Holder and the Smart on Crime Initiative, one of the challenges is if you had been a line prosecutor 5 or 10 years in an office like in Kansas or Missouri or any other state, and you’ve always been told, “This is the right way to do it.” Now someone comes along and says, “We’re going to change this.” The pushback that was there, because quite frankly there are some rollout problems with that for those people who’ve been doing what they thought was the right way all that time. Now they’re saying, “You’re telling me I did it the wrong way.” It’s like, “No, it’s a different policy.” As you can imagine, getting people to change that mindset, as they say, it’s like turning a battleship. It’s an institutional change. It takes a long time for that to sink in and people start doing it the way that Eric wanted. Of course, the day after Mr. Sessions became the Attorney General, if you went to the DOJ website, the Smart on Crime Initiative was gone. They went right back to charging the highest, most provable offense.

We’re also seeing states that are releasing prisoners and expunging records. These are massive things that you can’t hit a switch and turn it back around and stop those ships.

I used to tell people they find out you worked for the federal government, they think it’s an unlimited amount of resources out there for you to tap into. We have three offices in Kansas. I had 48 lawyers and 56 support staff and I got roughly $8.5 million. That’s it. They’re not going to give you more. The question becomes, “What is your priority, Mr. US Attorney? Are you going to go after sexual exploitation of children on the internet? Are you going to go after human trafficking? Are you going to go after people who are violating labor laws? Are you going to spend all your money chasing guys who were down I-70 coming out of Colorado who are bringing cannabis back into Kansas?”

From my perspective, when you talk about investigation, interdiction, arrest, prosecution, and incarceration, that’s a lot of resources. At the end, what have you got? You basically have someone who’s now potentially in jail. They spend their time in jail. When they come out, their inability to find employment because they are now a felon, it has all these ripple effects. It affects their family. It affects their community. There’s got to be a better way to address it. I know that at one point in time, a couple of years ago, there were over 40 pieces of legislation pending on the hill that address different aspects of cannabis use, cannabis industry.

From my perspective, and I’m a partisan, if the Democrats can take back the Senate and we went in the White House and continue to build on what we’ve done in the house, within the first six months, the legislation that Senator Cory Booker from New Jersey had proposed, it will be signed. It’s going to have a profound effect on individuals who were not involved in crimes of violence. That’s a separate thing. If you have drug charge and crimes of violence, you’re probably not going to get expunged. If it was simply something as trafficking, manufacturing or those kinds of things, you can get your life set back straight. Now you can remove that weight of conviction off of yourself, you can get that student loan, which you can’t get now.

You can go to college or you can get that job. There was a move called Ban the Box, if you remember that for a while. In every application in that little place, you had to check. Have you ever been convicted of a major felony or a misdemeanor other than traffic offenses? If you checked it and you were in the pile, they wouldn’t even look at it. A lot of companies have gotten away from that because quite frankly, everybody does background checks on prospective employees. If that’s the case, if you’ve got something out there, you need to sit down and say, “Barry, we saw you and you have a felony.” You say, “Yes. When I was nineteen, me and three friends of mine stole a car and we went joyriding. I pled out to a non-person felony. I didn’t have to any time, but yet it’s on my record.” Giving someone the ability to explain themselves, as opposed to arbitrarily putting them in the other pile, they’ll vanish into the ether and never get a job. If we can do away with that, that in and of itself is going to help a lot of people.

What do you think are some of the best opportunities for people out there looking to get involved in the industry that maybe are coming from these expungements or coming from potentially they’ve had problems with the war on drugs? Do you see certain avenues where you’re like, “That’s the direction I would take,” or “This is the business I would start?”

It’s going to be interesting to see. I used the term how it is a maturing economy and when it becomes legal and it will. It’s going to actually displace a lot of people because you’re going to have these large industrial venture capitalist types coming in and in effect, buying up markets and making it difficult. What it might come down to is being like a cool boutique vineyard that you only produced less than 1,000 cases of Pinot. Maybe you’ve got a certain strand that is unique. I have friends who live up in Mendocino, California, and they’re already talking about appellations for wines.

They’re talking about appellations for cannabis plants. It’s going to take some creativity because once big money gets involved in the industry, that’s going to change things, but somebody has to be employed by those people. Whether you are in the agricultural side of the business, whether you want to be a lobbyist for them, whether you want to get into a sales promotion, the ad world, there are all kinds of opportunities that are going to come out. Even if we become big, money comes in and takes it over, it’s still going to be lots of money to be made and opportunities to provide jobs for people.

I’m excited for a lot of people out there that still are on the beginning stages of this market because there’s a lot of opportunity available in it. I know that gentlemen like yourselves are pushing forward in the market, which is exciting to me as well. What projects are you specifically working on that would want to share?

We’re still working with Electrum Partners. Many other businesses, COVID has frozen people in their tracks from an investment standpoint. MJBiz, which is a huge cannabis conference, they had to cancel and probably be canceled again. Things are slow. We’re all taking this time. We spend time with our family, hug the people that you love. People you haven’t talked to a long time, pick the phone up, see how they’re doing. It’s given us time to reflect and reset. That’s what I’m doing. I hope other people are as well because as they say, “This too shall pass.” All the various businesses, hopefully, will be back. Maybe not the same way as it was before, but we will be back.

The cannabis industry will continue to grow and mature because there is a real need for cannabis for recreational and medicinal purposes. Click To Tweet

I certainly think this industry will continue to grow and continue to mature because there is a real need, a real want, and a real desire for cannabis, not only for recreational purposes but for medicinal purposes. Once it’s taken off that Schedule I, then we can start having meaningful research to find out what are some of the curative cares that cannabis hemp has because we can’t do that. The other place in America, ironically enough, where they can do legal research on cannabis is at the University of Mississippi. It’s the only place where they’re growing it and can do research. Other than that, you have to look outside the country. Israel has been a leader in doing research into this. Once the virus thing is hopefully at some point behind us or under control, I think the business of cannabis will get back to where it was before the virus.

When you’re talking research, there are many compounds in the plant that we have no clue what they’ll do. This blindness of not being able to do this study has created this unknowing, “What’s happening? Is this good for me? Does this help? Does these two parts of the plant help?” It’s very confusing to the consumer because they don’t get it either. We’re opening up and saying, “It’s got THC in it. This has CBD in it.” That’s the two things that people are looking at. There have been some big wins. There was a lawsuit filed against the DEA by the doctor from Arizona. There were a couple of battles where she sued the DEA in response to her application to study the plant. She won. I don’t know when they’re giving those out, but there are a couple of universities that are getting this.

We go back to where we were talking about earlier. It’s changing the mindset and we have to get past that 1970s mentality and say, “Let’s put this in the hands of researchers who can do peer review research as to what the properties are, if any, that I have from a medical standpoint. All those kinds of things. We’re not seeing it across the board. There are different situations that several years ago, we wouldn’t have seen. Several years ago, we have somebody said, “Do you know what CBD is?” They couldn’t tell you. The thing is maybe another government agency, like the FBI, IRS, the alphabet soup thing. Everybody knows and is probably closer to their home, there’s a CBD shop down the road that helps with this or this. It’s a maturing, growing industry and that’s one more example of it.

I have one last question for you. Would you be willing to tell me one thing that you enjoyed about this interview?

The thing I enjoy about reaching out and talking with people about cannabis from the perspective of a former federal prosecutor, I like educating people. It’s not Reefer Madness as we were all led to believe for so long. Being able to talk to people and to hopefully provide them an insight and an education on cannabis, cannabis use, whether it’s a good public policy or not, I’ve thoroughly enjoyed it, and being able to talk with you.

Thanks, Barry. Me too. I know I try to provide as much as I can for the readers on the education side for the exact reasons you said. If you want to reach out to them, Barry, what is the name of your company again?

Electrum Partners.

I would like to in the future, if you want, to talk some more about that. When you guys start getting busy, I’d love to have you back on.

Sure, that would be great. I’d love to.

Thank you so much for being on the show. I hope the readers enjoyed it like I did. It was great. Keep on moving down the field. We need guys like you that are pushing forward. I appreciate the prosecutor’s vision behind the curtain. It’s been great having you on.

Thank you.

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About Barry Grissom

PP 57 | Cannabis ProhibitionBarry Grissom was appointed U.S. Attorney for the District of Kansas by President Barack Obama in 2010 and served as such until 2016. As U.S. Attorney, he assessed and resolved a wide array of civil and criminal cases, managed three offices and a large legal workforce of 49 Assistant U.S. Attorneys and 53 support staff, while representing the Department of Justice in diverse communities across his district. Grissom’s law enforcement priorities included national security, violent crime, drug trafficking, financial fraud and crimes against children.

As U.S. Attorney, Grissom was selected by Attorney General Eric Holder to serve as one of 15 members on the Attorney’s General Advisory Committee (AGAC), which advises the Attorney General on matters of administration and policy. As a member of the AGAC, Grissom contributed to efforts to reform the federal criminal justice system through his Smart on Crime initiative. He also served on several sub-committees, including Financial Fraud, Health Care Fraud Prevention & Enforcement Team, Terrorism & National Security (Cyber), Native American Issues and Civil Rights.

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