Two Justice Department officials described the new policy to The Associated Press, saying prosecutors will be told it is not a good use of their time to arrest people who use or provide medical marijuana in strict compliance with state laws.
The new policy is a significant departure from the Bush administration, which insisted it would continue to enforce federal anti-pot laws regardless of state codes.
"We'll see less prosecutions now even though these guidelines are not mandatory," says CBS News legal analyst Andrew Cohen.
Fourteen states allow some use of marijuana for medical purposes: Alaska, California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington.
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California is unique among those for the widespread presence of dispensaries - businesses that sell marijuana and even advertise their services.
Cohen says the new guidlines will likey have the most impact in California, which is the largest state by far to allow some marijuana use - and the state where public sentiment against federal intervention in possession and distribution cases was best organized and most vocal.
Colorado also has several dispensaries, and Rhode Island and New Mexico are in the process of licensing providers, according to the Marijuana Policy Project, a group that promotes the decriminalization of marijuana use.
Attorney General Eric Holder said in March that he wanted federal law enforcement officials to pursue those who violate both federal and state law, but it has not been clear how that goal would be put into practice.
A three-page memo spelling out the policy is expected to be sent Monday to federal prosecutors in the 14 states, and also to top officials at the FBI and the Drug Enforcement Administration.
The memo, the officials said, emphasizes that prosecutors have wide discretion in choosing which cases to pursue, and says it is not a good use of federal manpower to prosecute those who are without a doubt in compliance with state law.
The officials spoke on condition of anonymity because they were not authorized to discuss the legal guidance before it is issued.
"This is just a public announcement by the Justice Department that U.S. Attorneys around the nation aren't going to get in trouble or otherwise harm their careers if and when they don't aggressively go after marijuana users or growers who are complying with state law," explains Cohen.
"It took a while, but in the end the Obama administration is signaling a shift in policy. Part of the reason is that the feds feel they have more important cases to pursue and fewer beds available in prison," Cohen adds.
"This is a major step forward," said Bruce Mirken, communications director for the Marijuana Policy Project. "This change in policy moves the federal government dramatically toward respecting scientific and practical reality."
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At the same time, the officials said, the government will still prosecute those who use medical marijuana as a cover for other illegal activity. The memo particularly warns that some suspects may hide old-fashioned drug dealing or other crimes behind a medical marijuana business.
In particular, the memo urges prosecutors to pursue marijuana cases which involve violence, the illegal use of firearms, selling pot to minors, money laundering or other crimes.
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And while the policy memo describes a change in priorities away from prosecuting medical marijuana cases, it does not rule out the possibility that the federal government could still prosecute someone whose activities are allowed under state law.
The memo, officials said, is designed to give a sense of prosecutorial priorities to U.S. Attorneys in the states that allow medical marijuana. It notes that pot sales in the United States are the largest source of money for violent Mexican drug cartels, but adds that federal law enforcement agencies have limited resources.
Medical marijuana advocates have been anxious to see exactly how the administration would implement candidate Barack Obama's repeated promises to change the policy in situations in which state laws allow the use of medical marijuana.
Shortly after Mr. Obama took office, DEA agents raided four dispensaries in Los Angeles, prompting confusion about the government's plans.