Justice Thomas Leaves Door Open for Possible Future Supreme Court Review of Federal Cannabis Law – Cannabis Business Executive

By Michael C. Tackeff, Mallory Farrar, Justin Starling and Erica Bell Vick

The U.S. Supreme Court once again refused to weigh in on the federal laws banning cannabis last month, but Justice Clarence Thomas may have opened the door for future arguments to finally make it to the high court. While skeptics are certainly justified in their doubt that the Supreme Court will take up the issue of cannabis legalization any time soon, Justice Thomas’s statements are certainly worth considering as the industry plans future challenges.

Federal vs. State Cannabis Laws Leave Industry in Chaos    

As industry stalwarts, policymakers and confused citizens will bemoan at every turn, the state of cannabis regulation in the United States is nothing short of abject chaos. At present, the federal government retains its formal legal ban on cannabis but, in practice, has tolerated the loosening of cannabis laws in a vast majority of states. This has resulted in a highly unstable stalemate. Consumers of cannabis products in states like Colorado and California can buy cannabis under retail restrictions that resemble liquor control. But for business owners who continue to operate in cash, or for investors who are considering entering this highly lucrative and burgeoning industry, the law has been an unwieldy obstacle. Innovators and early adopters, by assuming all the risk, have reaped all the rewards.

One more crack just appeared in the federal government’s cannabis ban. For years, the U.S. Supreme Court has refused to hear any cannabis-related disputes. For example, see the 2016 case of Nebraska v. Colorado where the Court denied leave to file a complaint where Nebraska tried to challenge Colorado’s cannabis laws. And last month, it refused to take one more in a case called Standing Akimbo, LLC v. United States.

However, Justice Clarence Thomas issued a statement opening the door to challenges to the Supreme Court’s cannabis jurisprudence. For the happily uninitiated, in Gonzales v. Raich, the Supreme Court ruled 6-3 against California cannabis growers who challenged the federal Controlled Substances Act, finding that Congress had the power to completely ban a fungible commodity (cannabis) under its powers to regulate interstate commerce. Though Raich did not slow the pace of states experimenting with cannabis laws, it remains a curious decision in constitutional law, in part because Justice Scalia concurred separately to find that local cannabis activity could be regulated to effectuate Congress’s powers to regulate commerce under the general “Necessary and Proper” clause of the Constitution, an unusual position given Justice Scalia’s history.

Federal Cannabis Ban is “Half-In, Half-Out”

Justice Thomas dissented in Raich, saying “The majority prevents States like California from devising drug policies that they have concluded provide much-needed respite to the seriously ill.”). It seems that 16 years later, he has not forgotten his prior words.

In Standing Akimbo, Justice Thomas described the present federal cannabis ban as “half-in, half out,” and gave a short summary of the discordant state of the law in this arena. He also opined that the present de facto system of regulation, where state law reigns supreme, more closely resembles the “laboratories of democracies” world described by Justice O’Connor in her separate dissent in Raich in 2005. Of course, he is right that Justice O’Connor’s dissent has proven prescient. The federal ban on cannabis is meaningless to most retail consumers in recreational-cannabis-permissive states.

One optimistic takeaway many will no doubt opine is that Justice Thomas is inviting new and different test cases (with better facts than Standing Akimbo) to present a direct challenge to Raich. In fact, Justice Thomas used precisely Justice Scalia’s language in inviting new cases, saying “A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government’s piecemeal approach” (emphasis in original text). The suggestion is, explicitly, that Justice Scalia’s logic may be less persuasive than it once was 16 years ago.

However, there are convincing reasons to doubt whether Justice Thomas’s words will have any impact:

• First, no other Justice joined Justice Thomas’s statement in denying the petition for Supreme Court review. This is a departure: in 2016, Justice Alito agreed with Justice Thomas that the Supreme Court should hear a dispute between Nebraska and Colorado over Colorado’s permissive cannabis laws, which Nebraska alleged had increased the flow of drugs into its borders.
• Second, though the Supreme Court is a very different place than in 2005 (in fact, only Justices Breyer and Thomas remain from the original Raich panel), Justices Roberts, Barrett and Kavanaugh have every reason to want to keep the Supreme Court out of the cannabis arena. Overruling Raich would have major impacts on commerce jurisprudence, and the Supreme Court already has taken a number of controversial cases that will capture the public’s attention in its next term. Justice Gorsuch echoed Justice Thomas’s sentiments when he served as a circuit judge, but he did not join the statement in Standing Akimbo. Feinberg v. Comm’r, saying “This case owes its genesis to the mixed messages the federal government is sending these days about the distribution of marijuana.”

What to Expect Next

For business owners looking to the federal government for more heavy-handed intervention to open up the cannabis industry, the Supreme Court seems an unlikely branch from which to pursue relief. But Justice Thomas has cracked the door. It is also important to remember that an end to federal prohibition could come about in many different ways. If the federal government were to re-schedule cannabis, that would still preserve state criminal laws that punish the use of cannabis while affording federal tax relief to long-suffering businesses in cannabis-tolerant states. If the Supreme Court were to overrule Raich, a similar patchwork of criminal laws (where conduct related to cannabis is perfectly legal in Illinois or Colorado, but still criminal in many other states) could persist for many years to come.

We urge industry leaders to remain engaged and attentive as the ground continues to shift, however slowly, on this issue.

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About The Co-Authors

 

 

 

Mallory Farrar is an attorney at Bass, Berry & Sims and provides healthcare regulatory counsel as it relates to compliance, operational and transactional matters.

 

Justin T. Starling is an attorney at Bass, Berry & Sims and advises clients on complex commercial real estate and financial
transactions, including representing a number of regional and national publicly traded real estate investment trusts (REITs) and assisting clients in investing in the cannabis industry through sale/leaseback transactions and private offerings. Justin is the co-leader of the firm’s Cannabis Practice.

 

 

Erica Bell Vick is an attorney at Bass, Berry & Sims and serves as legislative counsel to a number of businesses and trade associations and is a registered lobbyist in Tennessee. Erica is the co-leader of the firm’s Cannabis Practice and leader of the firm’s Government Advocacy & Public Policy Practice.