The Trump Administration doesn't appear to be slowing investment in the marijuana industry

As the new head of the Justice Department, Attorney General Jeff Sessions will have sweeping power over how the federal government approaches marijuana under President Donald Trumps administration.

Marijuana currently exists in a legal gray area at the federal level.

The federal government classifies marijuana, which is illegal nationally, as a schedule I drug, meaning that it considers the plant to have no acceptable medical use and a high potential for abuse.

In 2013, however, the Department of Justice issued the "Cole Memorandum," which moved federal resources away from prosecuting individuals operating legally in states that have legalized marijuana.

While it remains to be seen how Trump and Sessions will handle marijuana, some marijuana industry executives who spoke to Business Insider said they are hopeful that Sessions, who has spoken out against legalizing marijuana, will focus his attention on Trump's priorities, like overhauling immigration, rather than picking a fight with legal marijuana.

legalize recreational and medical

Since marijuana was first legalized in Colorado and Washington in 2012, the legal marijuana industry has existed in a federal gray area. The industry is regulated on a state-by-state basis.

That gray area has made the industry vulnerable to political risk, according to Christov. Without clearly established rules or regulations, a new administration like Trump's c

However, marijuana advocates and policy experts say they expect the Trump Administration, and the Sessions-led Justice Department, to respect states' rights to legalize and regulate marijuana without federal interference.

Micah Tapman, a partner and managing director at the Colorado-based marijuana incubator and venture capital firm Canopy Boulder, said that there is one "hidden benefit" to the continuation of the federal gray area. Until the federal government clarifies its position, he said it's an opportunity for "smaller and more agile" companies to develop businesses on a state-by-state basis.

"It's not often that a multi-billion dollar industry is dominated by small and mid-size companies but that's exactly what's happening with cannabis," Tapman added.

In Colorado, California, and other legal marijuana states, Sessions' confirmation doesn't appear to be slowing investment in the industry.

Neil Demers, the CEO of Diego Pellicer, a network of retail dispensaries, said that he's "so confident" in the future of the marijuana industry that his company plans to open a flagship outlet in Denver next week.

Morgan Paxhia, a partner at Poseidon Asset Management, told Business Insider that, in his view, the percentage of investors concerned about Sessions is relatively small when considering other reasons to get into the marijuana industry.

The Trump Administration doesn't appear to be slowing investment in the marijuana industry

As the new head of the Justice Department, Attorney General Jeff Sessions will have sweeping power over how the federal government approaches marijuana under President Donald Trumps administration.

Enhance Your Pulse News Experience!

JOIN OUR PULSE COMMUNITY!