A handful of cannabis companies recently initiated a lawsuit with U.S. Attorney General Merrick Garland regarding the negative effects of federal prohibition, which hinders their business. According to the plaintiffs, which includes Massachusetts-based Canna Provisions Inc., Wiseacre Farm, Inc., and Gyasi Sellers, and Illinois-based Verano Holdings Corp., the Controlled Substances Act (CSA) causes harm to their respective businesses and is unconstitutional.
The lawsuit document filed on Oct. 26 refers to a court ruling, Gonzales v. Raich, from nearly 20 years ago. “In 2005, the United States Supreme Court held that because Congress intended to ‘eradicate’ marijuana from interstate commerce, including both economic and noneconomic uses of marijuana, the federal government had a rational and therefore lawful purpose in intruding on the states’ internal regulation of marijuana,” the lawsuit stated. “…This unjustified intrusion of federal power harms Plaintiffs, threatens the communities they serve, and lacks any rational purpose.”
The plaintiffs are represented by law firm Boies Schiller Flexner and Lesser, Newman, Aleo, & Nasser LLP, specifically principal David Boies, who has previously represented clients such as Microsoft, Al Gore, and a wide variety of others since it was founded in 1997.
Boies explained that with more than 38 states legalizing cannabis, the 2005 court case is. “Outdated precedents from decades ago no longer apply—the Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce; moreover, the facts on which those precedents are based are no longer true,”
Canna Provisions Inc. offers free training for those interested in a job in the legal cannabis industry, but because it’s illegal under the CSA, it “has been barred by one of the primary career services organizations in Massachusetts, MassHire, from posting jobs or running workshops.” Employees have also had their personal bank accounts closed and mortgages decline due to working “in a lawful intrastate marijuana businesses.”
While Wiseacre Farm, Inc. cultivates legally in Massachusetts, it was barred from leasing more farming land because its activities were deemed illegal under the CSA. “That illegal status renders farmers unwilling to lease their underused farmland to Wiseacre Farm out of fear that having marijuana cultivated on their land will cause them to lose federal agriculture grant money,” the lawsuit explained.
Gyasi Sellers, who is CEO of the delivery service Treevit, delivers to communities that were negatively impacted by the War on Drugs and offers jobs for ex-offenders, but faced many hurdles in order to operate his legitimate business. “These include not being able to obtain loans from the Small Business Administration, which deems his and all other marijuana businesses ‘ineligible for SBA financial assistance,’ regardless of whether they comply with state law,” the document stated.
Finally, Verano Holdings Corp., which is a Canadian-based company that is primarily based in Illinois but also operates in Massachusetts and in other states as well. However, the restrictions of the CSA prevent them from conducting various cultivation, manufacturing, medical, and adult-use licenses. “Because of that illegal status, Verano faces ongoing harms, including that Verano’s Massachusetts retail operations are unable to accept credit cards,” the document stated. “That illegal status also results in Verano having to pay higher insurance premiums and limits Verano in terms of service providers willing to work with the company.”
Following all of these individual experiences with the difficulties of operating a cannabis business under the CSA, the section concluded: “All of these harms, along with numerous other harms to Plaintiffs alleged herein, are caused by the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
In a press statement, Boies explained how federal criminalization of safe cannabis businesses is unfair and denies small businesses the opportunity and services that they should be eligible for. “The federal government lacks authority to prohibit intrastate cannabis commerce,” Boies said. “Outdated precedents from decades ago no longer apply—the Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce; moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss explained their intention to have the CSA ruled unconstitutional. “We are prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years,” Weiss said. “We believe that the Supreme Court will adhere to the core value on which our country was founded and which is central to guaranteeing freedom: that the federal government’s powers are limited.”
Canna Provisions CEO and co-founder, Meg Sanders, also explained their desire for equal treatment as all other Massachusetts-based small businesses.
Many other lawsuits have attempted to challenge or address the CSA, including the previously mentioned 2005 Gonzales v. Raich lawsuit. In May 2022, a Pennsylvania court ruled that cannabis is still a controlled substance, but in October 2022, a Nevada state judge ruled that cannabis should be removed from the state list of controlled substances.
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