State-Licensed Pot Suppliers Say Federal Prohibition Is Unconstitutional As Applied to Them

A federal lawsuit argues that it is time to reassess the Commerce Clause rationale for banning intrastate marijuana production and distribution.

A lawsuit filed late last month in the U.S. District Court for the District of Massachusetts argues that the federal marijuana ban is unconstitutional as applied to the intrastate operations of state-licensed cannabis suppliers. That claim is similar to one that the U.S. Supreme Court decisively rejected in the 2005 case Gonzales v. Raich, which involved state-authorized medical use of marijuana. But the plaintiffs in Canna Provisions v. Garland—a pot shop chain and three other Massachusetts marijuana businesses—argue that several developments since then undermine the logic of that ruling.

In the 2005 case, Angel Raich and Diane Monson, two patients who used marijuana for symptom relief in compliance with California law, argued that Congress exceeded its authority "to regulate commerce…among the several states" when it purported to ban noncommercial production and possession of cannabis that never crossed state lines. Monson grew her own marijuana, while Raich relied on two caregivers who grew it for her.

It may seem obvious that the power to regulate interstate commerce does not cover conduct that is neither commercial nor interstate. But the Supreme Court had held otherwise in the 1942 case Wickard v. Filburn, which involved an Ohio farmer who exceeded his wheat quota under the Agricultural Adjustment Act of 1938. Although Roscoe Filburn planned to use the extra wheat "wholly for consumption on the farm," the Court unanimously ruled that the collective impact of such decisions on interstate commerce was enough to justify the rule he violated.

When farmers grow wheat for their own consumption, the justices reasoned, that has "a substantial influence" on the interstate "price and market conditions" that Congress sought to regulate. "Even if appellee's activity be local and though it may not be regarded as commerce," Justice Robert H. Jackson wrote for the Court, "it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce."

Writing for the majority in Gonzales v. Raich, Justice John Paul Stevens applied similar reasoning to the federal ban on marijuana. "Our case law firmly establishes Congress' power to regulate purely local activities that are part of an economic 'class of activities' that have a substantial effect on interstate commerce," Stevens wrote. Wickard, he said, "establishes that Congress can regulate purely intrastate activity that is not itself 'commercial,' in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity."

Like Filburn, Raich and Monson "are cultivating, for home consumption, a fungible commodity for which there is an established, albeit illegal, interstate market," Stevens wrote. He perceived a "likelihood" that marijuana produced for medical use in California would be diverted to the interstate market, thereby evading the "closed regulatory system" that Congress had established through prohibition.

"While the diversion of homegrown wheat tended to frustrate the federal interest in stabilizing prices by regulating the volume of commercial transactions in the interstate market, the diversion of homegrown marijuana tends to frustrate the federal interest in eliminating commercial transactions in the interstate market in their entirety," Stevens wrote. "In both cases, the regulation is squarely within Congress' commerce power because production of the commodity meant for home consumption, be it wheat or marijuana, has a substantial effect on supply and demand in the national market for that commodity."

Justice Clarence Thomas was dismayed by the majority's position. "Respondents Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana," Thomas wrote in his dissent. "If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything—and the Federal Government is no longer one of limited and enumerated powers."

Whatever you think of Stevens' reasoning, the four Massachusetts marijuana businesses argue in Canna Provisions v. Garland, it is outdated for several reasons.

First, the plaintiffs say, "the regulated market in Massachusetts, and the dozens of intrastate markets like it, have substantially reduced interstate commerce in marijuana by providing a regulated alternative for consumers." From 2012 to 2022, the complaint notes, "the amount of illicit marijuana seized by U.S. Customs and Border Protection declined by almost 95%," which means "marijuana consumers are getting their marijuana less and less from the interstate channels that Congress sought to prohibit." That "steep decline in marijuana imports," Canna Provisions et al. add, "deprives criminal organizations of a major source of illicit revenue."

Second, the lawsuit says, "today's regulated marijuana is not fungible like wheat." State-regulated marijuana products "are distinguishable (from each other and from illicit interstate marijuana) based on the labelling and tracking requirements that states impose," the plaintiffs note. "Regulated marijuana in Massachusetts is subject to a strict tracking and labelling system that applies at every stage of the supply chain from seed to sale. As a result, far from being a fungible mass commodity, each marijuana product sold under Massachusetts' regulations is traceable to its origin and distinct from illicit interstate marijuana."

Third, Canna Provisions et al. argue, "the federal government has abandoned any goal of eliminating marijuana from interstate commerce." Since 2014, congressional spending riders have barred the Justice Department from interfering with the implementation of state medical marijuana laws. And even when it comes to recreational marijuana, the Justice Department has taken a hands-off approach, declining to prosecute cannabis suppliers as long as they comply with state law. Congress has allowed legalization of medical and/or recreational marijuana in Washington, D.C., and in territories such as Guam, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana Islands.

"The federal government no longer operates under any assumption that banning intrastate marijuana is necessary to policing interstate marijuana," the complaint says. "What was once a single-minded federal crusade against the cannabis plant has been replaced with an ambivalent set of inconsistent policies, some aimed at reducing federal interference with state efforts to regulate marijuana." In other words, the "closed regulatory system" aimed at "eliminating" interstate marijuana commerce no longer exists.

The plaintiffs are seeking "a declaratory judgment that the Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law." They also want an injunction barring the Justice Department from "enforcing the CSA (either alone or in conjunction with any other federal law such as the Bank Secrecy Act) in a manner that interferes with the intrastate cultivation, manufacture, possession, and distribution of marijuana, pursuant to state law."

Although those remedies would not allow interstate transactions or shipments, they would help relieve several of the hardships that businesses like Canna Provisions face as a result of continuing federal prohibition. "If plaintiffs get what they're asking for it would be enormously helpful," marijuana lawyer Vince Sliwsoki writes. "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, [Small Business Administration] loans, and federal tax treatment, for starters."

How likely are the plaintiffs to get what they're asking for? Not very, I think, given the flexibility of the Commerce Clause analysis that Stevens applied in Gonzales v. Raich.

Canna Provisions et al. argue that state-legal marijuana businesses like theirs actually reduce interstate commerce in cannabis. But the same could have been said of the homegrown medical marijuana used by Raich and Monson: Since they were producing or obtaining it locally, there was no need for them to buy marijuana imported from Mexico or other states (leaving aside the implausibility of that scenario in a state like California, which has long been a major marijuana producer). Stevens nevertheless worried about "diversion" to the interstate market, and the same risk exists in states with licensed dispensaries.

Visitors can and do buy marijuana products from those stores and take them home, either for personal consumption or to share with friends and acquaintances, sometimes in exchange for financial compensation. To the extent that a lack of "fungibility" matters, it favors such interstate transportation, since people who live in states where marijuana is still prohibited may prefer the regulated, reputable, and reliable products sold in states where it is legal.

Finally, the plaintiffs argue that the federal government, which in 2005 was manifestly determined to stamp out the interstate marijuana market, nowadays is "ambivalent" and "inconsistent." Yet the halfway tolerant policies and practices cited in the complaint do not necessarily signify that Congress "has abandoned any goal of eliminating marijuana from interstate commerce." Officially, it has not, and supporters of that goal could argue that the federal government is advancing it by continuing to oppress state-licensed cannabis suppliers in various ways while stopping short of sending them to prison.

That position may be dubious, but it makes at least as much sense as Stevens' conclusion that regulation of interstate commerce extends to a bag of homegrown marijuana in a cancer patient's nightstand. "This unjustified intrusion of federal power," Canna Provisions et al. argue, "lacks any rational purpose." But as Stevens noted in a classic understatement, "We have never required Congress to legislate with scientific exactitude."