Massachusetts Cannabis Companies Challenge Federal Prohibition in Lawsuit Against U.S. Attorney General

LOS ANGELES- A coalition of Massachusetts-based cannabis businesses has initiated legal proceedings against U.S. Attorney General Merrick Garland, presenting a strong case against the current federal cannabis prohibition. The litigants argue that the said prohibition is not only unconstitutional but also unduly infringes on state rights, thereby placing their businesses in jeopardy by compelling them to rely exclusively on cash transactions.

Representing the plaintiffs are established industry players such as Canna Provisions, Inc., Wiseacre Farm, Inc., Verano Holdings Corp., and Gyasi Sellers, who operates a specialized cannabis courier enterprise.

Central to their legal argument is the 2005 Supreme Court ruling in Gonzales v. Raich. This decision acknowledged the federal government’s rationale in intruding upon states’ cannabis regulations, rooted in Congress’s intent to completely eliminate cannabis from interstate commerce. This encompassed both economic and non-economic cannabis activities. However, the current lawsuit vehemently challenges this premise, emphasizing the evolving stance of both Congress and the Executive Branch over the years, moving away from their initial intent to “eradicate” cannabis.

With many states now instituting well-regulated cannabis programs that are clearly demarcated from illicit interstate cannabis, the plaintiffs question the continued imposition of the federal prohibition on intrastate cannabis. They describe this as “an unjustified vestige of a long-abandoned policy” that harms businesses and communities, bereft of any logical justification.

Further bolstering their case, the litigants detail specific business adversities arising from this federal prohibition. Gyasi Sellers highlights the impediment to securing Small Business Association (SBA) loans, a result of the agency’s blanket categorization of cannabis enterprises as ineligible for assistance. Canna Provisions shares its challenges with the state’s MassHire career services, facing restrictions in job postings and workshop conduct. Furthermore, they reveal the detrimental financial consequences faced by their employees and executives, including involuntary closure of personal bank accounts or mortgage denials. Wiseacre Farm cites its inability to lease land from a Massachusetts farmer, who harbored apprehensions about jeopardizing federal agricultural grant privileges.

The lawsuit also underscores the financial ramifications of the federal cannabis ban. This includes exorbitant taxation levels and the negation of rights under federal law, exemplified by the prohibition on availing tax deductions or credits and the restriction against trademarking products.

In culmination, the plaintiffs fervently advocate for the judiciary to deem the Controlled Substances Act, in its treatment of cannabis, unconstitutional. They further seek an injunction, restricting the attorney general and the federal government from any enforcement that might interfere with state-regulated “intrastate cultivation, manufacture, possession, and distribution” of cannabis.