After Jeff Sessions’ January 4 Memo on Marijuana Enforcement, many property owners and business people are wondering if federal asset forfeiture could become a growing problem. The asset forfeiture laws allow the federal government to seize assets (e.g., bank accounts, cash, vehicles, homes, or other buildings) that the government alleges are tied to the distribution or production of controlled substances, including cannabis. They remain a problem for all cannabis businesses, although some recent reforms have reduced the impact of asset forfeiture.
The asset forfeiture laws began in the 1970s as a new way to fight organized crime and money laundering. Predictably, asset forfeiture increased over time, as government agencies found it is an easy way to raise funds by exploiting groups without political power. Unlike in criminal cases, the government does not need to prove its case beyond a reasonable doubt; it just needs to make a case by a “preponderance of the evidence.” The owner of the property does not need to be convicted of any crime in order to have the property seized. Under this system, it is easy for innocent people unfamiliar with the legal system or who do not keep detailed records to lose all their savings. The system also allows for the federal government to seize assets linked to conduct that is fully legal under state law, but illegal under federal law – like commercial cannabis activity.
As the abuses and unfair results of asset forfeiture gained more exposure, there have recently been reform efforts. In 2015, Attorney General Eric Holder announced new policies restricting schemes where the federal government would encourage local governments to seize money and share profits. In July 2017, Jeff Sessions announced that he was re-instating the “adoptive forfeiture” process, in which a state or local law enforcement agency seizes property pursuant to state law and requests that a federal agency take the seized asset and forfeit it under federal law. Adoptive forfeitures, however, are only a small percentage of overall asset forfeitures. Fortunately, over half the states have recently adopted reforms curtailing the power of police to seize assets. In many states, new statutes require a criminal conviction as a predicate to state seizures. And since most crime and law enforcement occurs at the local level, the federal government rarely gets involved in asset seizures unless a state gets them involved or through the federal government’s own investigation.
In addition, Congress has passed an amendment – Rohrbacher–Blumenauer – precluding the Department of Justice from spending any funds interfering with state-sanctioned medical marijuana. This law restricts not only the criminal prosecutions done by the DOJ against medical marijuana, but also any other activities, including asset forfeiture. Recently, the Ninth Circuit Court of Appeals upheld a ruling blocking the DOJ from enforcing an injunction against a medical marijuana business as long as Rohrbacher-Blumenauer remains in effect. Much of the federal government’s asset forfeiture work is done by the DEA, the FBI, and the United States Attorney’s Office, all of which are included under the umbrella of the Department of Justice. The Rohrbacher-Blumenauer law severely restricts the avenues that the federal government would have to seize funds related to medical marijuana. It keeps it easy, however, for the federal government to seize funds related to non-medical marijuana. All non-medical-cannabis activity remains subject to asset forfeiture.
Asset forfeiture laws are a recurring threat to cannabis-related business. In order to fix the problems, we hope that the federal government will de-criminalize marijuana and reform its asset forfeiture laws, or short of that, pass a Rohrbacher-Blumenauer-type law that applies protections to adult-use cannabis. This could all happen easily and quickly if people come together and enact common-sense reforms.