Vince is an award-winning business lawyer, problem solver and dealmaker. His clients run the gamut from individual investors and entrepreneurs to widely held domestic and international corporations. Based in Portland, Oregon, he is Managing Partner of Harris Sliwoski and Editor of the Canna Law Blog and the Psychedelics Law Blog.
The lawsuit filed on October 26 against Merrick Garland to “end federal cannabis prohibition” wouldn’t really end federal cannabis prohibition. If you had that impression, it may be because reporting on this topic has been subpar. Many of the headlines are incomplete or downright misleading. Some stories take several paragraphs to explain the actual nature of the challenge, and some don’t get to it at all. Here are some prominent examples:
- Wall Street Journal: Marijuana Businesses Seek to Make Federal Restrictions Go Up in Smoke
- Marijuana Business Daily: Marijuana companies suing US attorney general in federal prohibition challenge
- Reuters: Cannabis companies in Massachusetts challenge constitutionality of federal drug law
Here’s the deal. Even if the plaintiffs prevail on all counts – and I hope they do!– the Controlled Substances Act would remain intact entirely. It would still be illegal to ship a single gram of marijuana from New York to New Jersey, from California to Oregon, or from Michigan to Minnesota. Or from anywhere to Canada. The focus of this lawsuit, instead, is application of the federal Controlled Substances Act (“CSA”) to intrastate – and not interstate — marijuana activity and actors. A victory would help cannabis operators who are drawing within the lines, as long as they stay within those lines. It would help them enormously, in fact.
But how do I know the lawsuit wouldn’t actually end prohibition? Here I must confess I haven’t actually read the complaint; I just skipped to the end. On the penultimate page is the REQUEST FOR RELIEF. A request for relief is exactly what it sounds like: it’s where the plaintiffs describe what they’re asking the court to do. These particular plaintiffs are asking the court to:
- Issue a declaratory judgment that the [CSA] is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law; [my emphasis]
- Permanently enjoin [the feds] from enforcing the CSA… in a manner that interferes with the intrastate cultivation, manufacture, possession, and distribution of marijuana, pursuant to state law; [my emphases]
- Award costs and attorneys’ fees to Plaintiffs; [not sure what the hook is there, but they’re gonna be high, so here’s hoping]
- Award any such other and further relief as may be just and proper. [In theory one of the courts could go wild and strike the whole CSA as applied to cannabis, really and truly ending federal marijuana prohibition; but they won’t.]
Again, if plaintiffs get what they’re asking for it would be enormously helpful. This press release from the plaintiffs’ law firm explains why. In short, state-legal marijuana businesses would be treated more like other businesses, outside of the frustrating prohibition on marijuana crossing state lines. They would get similar access to banking, SBA loans, and federal tax treatment, for starters. I do foresee potential issues with access to trademarks and bankruptcy — which no one seems to be talking much about — but those are topics for another day.
Again, I really hope these plaintiffs win. The lawyers are supremely talented and their press release outlines some promising arguments. They’ve also been thinking about this for a while – I actually previewed this filing with Andrew Smith back in June of 2022.
My secondary hope is that the litigation somehow compels Congress to act. The ultimate prize is not leveling the field for cannabis businesses who sell only locally, as this lawsuit seeks. It’s also not moving marijuana to Schedule III, as Health and Human Services recently recommended. For the playing field to be leveled truly, marijuana must be removed from the CSA entirely. If that’s not happening, though, this would be a nice consolation.