Was Barr's Marijuana Antitrust Investigation Really Illegal?

Last month, U.S. Attorney General William Barr came under fire after a U.S. Department of Justice (USDOJ) whistleblower revealed that he directed investigations into ten proposed marijuana industry mergers. In the weeks since, dozens of House members have introduced a resolution calling for a possible impeachment inquiry into Barr as he “abused the power of his office” to improperly investigate marijuana businesses and allegedly engaged in other unlawful conduct. The operative word here is “improperly.” 

Antitrust laws are designed to protect trade and commerce from abusive practices, such as price-fixing, restraints, price discrimination, and monopolization. The principal federal antitrust laws have been in place for a long time, particularly the Sherman Act and the Clayton Act, passed and later amended since the 1890s. The key issue now is whether Barr’s investigations into alleged antitrust violations truly represent an abuse of power and warrant impeachment – or is that an overreaction?

Marijuana is unequivocally a Schedule I, controlled substance and illegal under federal law. In our highly politicized world, and with a Presidential election looming in November, every action of every official in the Trump Administration will be thoroughly scrutinized – if not sensationalized. Various federal agencies and departments falling under the purview of the Executive Branch have been perhaps more politically charged than ever; or at least more blatantly polarized.  This does not sit well with most Americans or with many of the Administration’s political opponents.  

Congressman Earl Blumenauer stated, “It is outrageous that Attorney General Barr has allegedly politicized the Justice Department while continuing to put his own personal beliefs before those of the American people. His egregious disregard for his oath to serve without bias warrants an investigation into his misconduct, at the very least. I’m going to continue working with my colleagues in Congress to hold him accountable. America deserves better than this corrupt administration.”

Blumenauer’s press release is highly-spirited, but did Barr do anything wrong in this scenario?

The press has reported that Justice Department personnel have claimed that Barr’s actions were “not even close to meeting established criteria” for such reviews. USDOJ prosecutor, John Elias, submitted that they amounted to industry “harassment.”  Put another way, how can the marijuana industry suggest that this investigation was illegal or improper when marijuana remains a Schedule I drug?  

The only legal restraint on Barr is found in the Rohrabacher Farr Amendment (also known as the Rohrabacher–Blumenauer amendment). This legislation prevents the DOJ from spending funds to interfere with the implementation of state medical cannabis laws (emphasis intended). 

In May 2014, this amendment passed the U.S. House of Representatives and became law that December as part of an omnibus spending bill. This was the first time either chamber of Congress had voted to protect medical cannabis patients, and has been viewed as a historic victory for cannabis reform at the federal level. However, the amendment does not change the legal status of cannabis, which is renewed each fiscal year. On December 20, 2019, the amendment was renewed and is effective through September 30, 2020. So do Barr’s recent investigatory objectives violate the Rohrabacher Farr Amendment? The amendment has been applied and upheld in U.S. Courts in cases relating to Department of Justice funds used to interfere with state-regulated, compliant medical marijuana businesses.

Ultimately, it comes down to whether the scrutinized mergers were medical marijuana mergers or whether they fall under the unprotected adult-use/recreational side of the marijuana industry.  Even if the amendment prevents the use of DOJ resources, does that apply to alleged antitrust violations, IRS violations, securities violations, or the like? The answer is probably not.  

While Barr’s actions are distasteful to the industry, and an affront to the supposed “neutral” position of a government agency, they do not appear to be illegal.  

Under this Administration, the in-your-face politicization of the USDOJ is a very disturbing, almost un-American, trend. Yet when you look closely at history, it’s happened before, just not so overtly. The marijuana industry cannot cry foul because it’s Congress’s responsibility to expand, clarify, or amend Rohrabacher Farr to prevent these sorts of federal actions. Otherwise, the DOJ is not restrained from taking steps to interfere with America’s lawful cannabis industry. Until change comes, the industry just has to live with this.  

If anything, these acts should further motivate the industry to push harder for federal policy change — especially since it’s recently been deemed an “essential” business that can lead us out of a post-COVID economic decline and help bring about racial and social justice. The time to strike is now.

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