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Tuesday, May 30, 2023

Latest Lawsuits to End Federal Ban

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High-profile lawsuits to end the cannabis ban are not new. We’ve covered efforts Going back several years, though, none of it worked. a Recently announcedIt might, however, be the best chance yet – especially given the changing environment with cannabis legalization in many states; Especially given the constitutional case law relevant to these changes.

So what’s going on? Well, many influential marijuana companies and stakeholders are joining in to sue the federal government over alleged unconstitutional policies affecting their operations. This is according to the CEO of one of the companies joining the lawsuit. This effort is particularly interesting because of the multinational operators (MSOs) who represent this alliance. The famous constitutional law firm Boies Schiller Flexner LLP is allegedly taking on the case. David Boyce – considered by many to be the greatest surviving constitutional law litigant – is said to lead the charge.

Boise Schiller has represented clients in constitutional cases ranging from government agencies, politicians, and plaintiff groups to high-stakes constitutional rights cases. By taking over the case, the company has validated the alliance’s allegations.

In fact, the consortium plans to offer two separate federal courts, according to Abner Cotten, founder and CEO of Ascend Wellness Holdings. Kurtin stated that these lawsuits are likely to be filed “in the next two months,” and that potential backers of the “industry-wide effort” include Curaleaf and TerrAscend, as well as the American Hemp and Hemp Trade Association (ATACH).

The first lawsuit to end the ban on cannabis centers around the federal ban on interstate trade in the context of cannabis, as well as challenging the constitutionality of the Controlled Substances Act (CSA) with a specific interpretation of the commerce clause in the US Constitution. One point the coalition will argue is that the federal government’s interstate commerce authority, particularly with regard to substitution, should not apply to cannabis companies in state legal markets, which are highly regulated. On the other hand, the federal government will argue that market interchangeability is the basis of interstate commerce power. In other words, a good produced in one state can affect the pricing of the good in other states, giving the federal government jurisdiction to regulate it.

In 2005, the Supreme Court ruled in this vein in Gonzalez vs. Reich, a Supreme Court ruling on cannabis that expands the power of the federal government. In this case, the plaintiffs were medical cannabis patients who call 10The tenth Modify To protect their right to access marijuana that is legally grown and used in California. The majority of the Supreme Court thought differently, however, and ruled that growing the cannabis plant for medicinal use could affect marijuana prices on the national illegal market. That is no longer the case, Curtin argues, because state markets are now so developed and unique that national hemp markets are unaffected by the cultivation of cannabis in a particular country.

The coalition is also likely to make the same argument raised by Supreme Court Justice Clarence Thomas, who Criticize Federal inconsistency for last year’s cannabis application. This discrepancy, Thomas argues, is an example of why courts should end the federal cannabis ban. It is also worth noting that Thomas ruled in favor of cannabis patients in Gonzalez.

The second lawsuit sheds light on US tax law, specifically Section 280E. This is another risky area, in which our customers are also challenged High Level Federal Litigation. The section states:

“No deduction or credit for any amount paid or incurred during the tax year shall be permitted in the exercise of any trade or business if such trade or business is . . . the trade in controlled substances . . . which is prohibited by federal law or the law of any state in which it is conducted This is a trade or business.”

This basically means that cannabis companies Tax deductions cannot be claimed Because they trade in controlled substances under outer space law. The decision could be in favor of the plaintiffs retroactively as well, allowing cannabis companies to recoup the tax cuts they would have applied in years past. Redeeming these deductions can actually help fund the litigation, in theory.

The lawsuits come at an opportune time, as several federal bills to legalize cannabis use at the federal level are stuck in either the House or the Senate (see our recent summaries over here And the over here). Additionally, Curtin stated that the lawsuits will be discussed from a states’ rights perspective, which is likely to gain bipartisan support and appeal to the Supreme Court’s conservative majority.

Ultimately, the lawsuits to end the cannabis ban represent another angle – avoiding the various hurdles to legislative approval – to repeal the federal ban on cannabis. Even if litigation fails, it should put more pressure on Congress to act. But the potential agreement of a prestigious constitutional law firm to represent a coalition of major players in the cannabis world points to the potential advantages of their claims. We will be tracking these cases closely in the coming months.


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