Big cannabis prohibition lawsuit dismissed

CANNABIS COURT
District court dismissed lawsuit over federal prohibition

What happened: A federal court dismissed a lawsuit from major cannabis companies seeking to block the government from enforcing prohibition, specifically against their in-state activities.

The US District Court for the District of Massachusetts’s Western Division cited Supreme Court precedent, which grants the federal government authority to regulate controlled substances within state borders.

That’s despite what the court said are persuasive arguments for reexamining the status of cannabis as a Schedule I controlled substance, the most restrictive regime. 

The plaintiffs, including Verano Holdings Corp. and other Massachusetts-based cannabis businesses argued that prohibition has “no rational basis” due to state-level legalization efforts.

What they’re saying: “At this time, marijuana continues to be listed on Schedule I and, therefore, almost all activities that involve growing, processing, and possessing marijuana continue to be federal crimes,” Judge Mark G. Mastroianni said. “This is true even though thirty-eight states have adopted programs that legalize marijuana within a strict, state regulatory framework.”

Back up: Last year, several cannabis companies hired the prestigious law firm Boies Schiller Flexner to challenge the federal government’s prohibition of marijuana, arguing it should not apply to state-legal cannabis businesses and intrastate commerce. 

The case, which echoed the 2005 Supreme Court decision in Gonzales v. Raich, focused on issues of interstate versus intrastate commerce, the impact of rescheduling cannabis to Schedule III, and the alleged financial harm to cannabis companies. 

The DOJ argued for dismissal, stating they have no intent to prosecute these businesses.

The plaintiffs say the situation on the ground is different today — 38 states have legalized cannabis for adult use, and now, President Joe Biden is pushing for reform. 

Check out May 23’s newsletter for more background. And check out our interview with one of the lawyers working on the case. 

Why it matters: Despite dismissal, the court ruled the plaintiffs have standing to bring the lawsuit. 

It explains that the plaintiffs have demonstrated that their economic injuries are directly connected to the Controlled Substances Act (CSA) and that their financial injuries are a result of the federal prohibition, satisfying the requirement for standing under Article III to challenge the CSA's application to intrastate marijuana activities.

Broadly, this ruling highlights the ongoing tension between federal and state laws regarding cannabis regulation and the legal challenges faced by the industry despite state-level legalization.

What’s next: The plaintiffs may continue to advocate for rescheduling or complete removal from the Controlled Substances Act or they can seek higher court review. 

Meanwhile, the Justice Department is initiating a rulemaking process to reschedule cannabis from Schedule I to Schedule III.

-CB

“Well, first off, I know that it’s the gateway drug — my brother just died. He just passed away,” Sen. Rick Scott told Ask a Pol. “I didn’t support the legalization of marijuana because I think it’s gonna — it’s a pathway to destructive drugs, which is what it did to my brother.”

Sen. Rick Scott of Florida partially blamed cannabis for the death of his brother in an interview with Ask a Pol. Listen to the full episode. 

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