AG William Barr Used DOJ Funds To Target Marijuana Industry

By The Fresh Toast's Brendan Bures, provided exclusively to Benzinga Cannabis.

According to a Justice Department whistleblower, reefer madness still continues with Attorney General William Barr.

Attorney General William Barr said he’d take a “hands-off” approach to marijuana at 2018 Senate confirmation hearings. His statements encouraged the cannabis industry following former AG Jeff Sessions, a noted prohibitionist strictly against legal marijuana. Barr appeared like a breath of fresh air — he said emphatically he wouldn’t use federal resources to prosecute legal cannabis companies abiding by state law.

But a Justice Department whistleblower is expected to testify otherwise to Congress this week. John Elias, a senior official at the DOJ’s antitrust division, wrote in an opening statement that Barr inappropriately investigated cannabis company mergers and acquisitions because he “did not like the nature of their underlying business.” These “were not bona fide antitrust investigations,” Elias added, and accounted for 29% of all antitrust merger investigations in 2019.

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Staff were pulled in to assist from other departments due to the volume and labor required in these cannabis investigations. Assistant Attorney General Delrahim, who serves as head of the DOJ Antitrust Division, held an all-staff meeting on Sept. 17, 2019 following internal concerns about the nature of these investigations.

“There, he acknowledged that the investigations were motivated by the fact that the cannabis industry is unpopular ‘on the fifth floor,’ a reference to Attorney General Barr’s offices in the DOJ headquarters building,” Elias wrote. “Personal dislike of the industry is not a proper basis upon which to ground an antitrust investigation.”

Photo by Chip Somodevilla/Staff/Getty Images

A highly publicized, potential merger between MedMen and PharmaCann fell apart, due to regulatory delays caused by one such DOJ probe. Despite DOJ staff concluding the deal was “unlikely to raise any significant competitive concerns,” Barr still called for a second investigation.

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“The rationale for doing so centered not on an antitrust analysis, but because he did not like the nature of their underlying business,” Elias wrote.

Staff reiterated their position the planned merger wasn’t of antitrust concern, especially considering cannabis industry’s fragmented markets in part due to state-by-state variety in regulation. While the DOJ held up the deal, MedMen stock prices fell about a third of their original value. Elias cited 10 total DOJ investigations motivated by Barr’s personal dislike of marijuana, but only cited the MedMen-PharmaCann deal by name.

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