The legal-cannabis industry that celebrated victories in eight states last week is now warily eyeing the coming Trump Administration. Four words stoking angst at the moment: Attorney General Rudy Giuliani.
The former New York City Mayor is just one of several people floated as potential picks, but his fervent anti-marijuana stance has made him a focus as investors, retailers, growers and others in the cannabis business gather this week in Las Vegas for two big conferences.
While President-elect Donald Trump has sent mixed signals, many in his inner circle are no fans of legalisation. The next United States Justice Department could easily ditch the noninterference policy in force since 2013. Cannabis is illegal under federal law.
"We're looking at worst-case scenarios," said Emily Paxhia, managing director of Poseidon Asset Management in San Francisco, which has invested more than US$10 million ($14.1m) in cannabis ventures.
Voters in California, Maine, Massachusetts and Nevada last Wednesday raised to eight the number of states where, come January, recreational-pot use won't be a crime. Trump's victory over Hillary Clinton "definitely muted the celebrations", Paxhia said.
There's no telling, though, whether the Republican Administration will cause any trouble. Trump has called legalising marijuana for anything other than medicinal purposes a "bad" experiment but has also said it's a matter for the states.
Vice President-elect Mike Pence was as Indiana Governor a proponent of increasing penalties for possession, and others close to Trump including Giuliani and Chris Christie are on record as being fiercely anti-pot.
But the venture-capital fund of transition-team member Peter Thiel has put money into cannabis. The team didn't respond to emails seeking comment.
Cannabis is a US$6b-a-year business, projected to triple as the new states set up their infrastructures.
One-in-five adults will be living in legal-cannabis states by the time Trump is inaugurated. In 28 states, including four that just voted to join, medicinal marijuana will be lawful.
"It's going to be impossible to put it back in the bag," said Dona Frank, chief executive officer of Santa Rosa, California-based Natural Cannabis Co, which owns dispensaries. "It would be smarter just to tax and regulate. Everybody voted for it, everybody wants it."
Still, the industry would be foolish not to brace for the worst, said Jonathan Caulkins, a professor at Carnegie Mellon University and author of Marijuana Legalisation: What Everyone Needs to Know. Trump could be persuaded by advisers to end the blind-eye doctrine, and his attorney general will have the authority to force businesses dealing in federally illicit products to close.
"It's really easy to shut them down," Caulkins said. "You just write a letter and threaten to seize their stuff."
Taylor West, deputy director of the National Cannabis Industry Association, said the group has its ground game ready: educating members of Congress from the new legal-cannabis states to "bring them into the fold", and reminding the Trump White House that 60 per cent of US residents have access to some form of legal marijuana.
Paxhia said strategising will be on attendees' agendas at the two Vegas events, Marijuana Business Daily's 5th Annual Marijuana Business Conference & Expo and the Arcview Investor Forum, sponsored by Arcview Investor Network, whose members back cannabis enterprises.
"Right now there is some uncertainty around what Trump Administration policy will be," West said. "This type of moment is exactly what we've been preparing for."