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Cannabis News Alert: United States Court of Appeals For the First Circuit

A potentially game-changer of a cannabis case came down on August 17, 2022, from the US Court of Appeals for the First Circuit, and we will be hearing lots about it. This is the level right below the US Supreme Court. The Court split 2-1 on the decision. So, there is a strong likelihood of an appeal to the Supreme Court.

In the case, the Court voided Maine’s state residency requirement for medical marijuana licenses arguing that the requirement was protectionist against out-of-staters, and therefore violated the US Constitution’s Commerce Clause. But as the dissent argued, the federal government affirmatively removed itself from the cannabis industry with the Controlled Substances Act of 1970, which made cannabis federally illegal. It’s like the feds are having their cake and eating it too. The feds prohibit the industry in the first instance and pull away from any participation, but nonetheless retain sufficient residual influence to passively regulate it. That federal presence extends to ensuring that basic federal commerce concepts, like opposing state practices which impede interstate dealings and business, still apply – and apply even to shield a federally illegal cannabis industry from a state’s protectionist leaning

Now – how far will this go if the Commerce Clause can invalidate protectionist state cannabis laws? Will state practices, such as those requiring seed to sale entirely within a state survive? Who knows? Transport between states will remain federally illegal. But after this case, will a state be able to prohibit out-of-state product once it lands within state boundaries?

Perhaps intra-state social equity cannabis laws will survive because their primary purpose is curative and corrective, and not protectionist. But again, who knows?

This case may not be the final word on the subject. We can’t imagine that the State of Maine will not appeal to the US Supreme Court. And the issues presented in the case are like catnip to the current uber-conservative Supreme Court. Will the US Supreme Court ignore a glaring opportunity to further slap back the reach of federal law at the expense of state rules? They’ve rolled back the reach of federal law before – though their prior rulings knocked out federal regulations which were perceived as inhibiting commerce. This case supports a federal presence intended to maximize commerce. Stay tuned for more.

But for now, keeping out-of-staters out of a state’s cannabis industry, and reserving if for in-state residents, has gotten a lot more difficult to accomplish.

United States Court of Appeals 21-1719P-01A
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