Legal Seminar, Denver, CO

071018 Discussion Draft

e. In Gonzales v. Raich , the Supreme Court rejected a constitutional protection for medical use based on substantive due process, as well as a challenge to Congressional authority under the Commerce Clause. o This means that illegal activity defined by federal law may not only involve dispensaries in states that have legalized marijuana, but also members of the medical community who participate in administering marijuana for medical purposes. o So, does your payment system or banking customer engage in illegal activity that might implicate you in a federal crime? f. The Obama Administration has announced a policy of détente, of sorts, in a memorandum by Deputy Attorney General Cole to all United States Attorneys dated August 29, 2013, [hereinafter “Cole Memorandum”], available at https://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf o The guidance details enforcement priorities, which include among other things “preventing revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels.” o It channels enforcement priorities away from states that have robust controls and procedures not only on paper, but in practice, to limit harms from drug- related activity. o Although the size of an operation was previously a subject for concern, regulation displaces size considerations in terms of enforcement priorities. g. The legal protection from such guidance is ephemeral at best. o “This memorandum does not alter in any way the Department’s authority to enforce federal law … regardless of state law. Neither this guidance herein nor any state or local law provides a legal defense to a violation of federal law, including any civil or criminal violation of the CSA.” o “[N]othing herein precludes investigation or prosecution, even in the absence of any one of the [federal enforcement priority] factors listed above, in particular circumstances where investigation and prosecution otherwise serves an important federal interest.” h. Financial transactions involving persons or businesses engaged in distributing marijuana present serious legal risks for banks and intermediaries with knowledge of the nature of the business being conducted – and typical CDD activities can be expected to generate that knowledge in most cases. o Aiding and abetting translates into criminal liability as a principal for those who knowingly aid persons committing federal crimes with the intention of furthering that crime, even if they did not participate in each and every element of the offense. See 18 U.S.C. § 2(a); Rosemond v. United States, 134 S.Ct. 1240, 1244-47 (2014) (discussing elements of aiding and abetting). o There are limits to this risk, as suggested by this footnote reference in Rosemond v. United States : “We did not deal in these cases, nor do we here, with defendants who incidentally facilitate a criminal venture rather than actively participate in it. A hypothetical case is the owner of a gun store who sells a firearm to a criminal, knowing but not caring how the gun will be used. We express no view about what sort of facts, if any,

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