BREAKING NEWS: Court Says DOJ Cannot Raid MMJ Businesses

CannabisJust yesterday, on the heels of the DEA’s decision not to reschedule cannabis, the Ninth Circuit Court of Appeals threw a bone to medical marijuana patients and caregivers in the case of United States v. McIntosh. The Ninth Circuit Court of Appeals is just one level below the U.S. Supreme Court, and its rulings constitute federal law for the following states within its jurisdiction:

  • Alaska
  • Arizona
  • California
  • Hawaii
  • Idaho
  • Montana
  • Nevada
  • Oregon
  • Washington

In this case, the widely influential Ninth Circuit ruled in favor of MMJ providers who disputed the Department of Justice’s enforcement of the federal Controlled Substances Act against them in their respective states (all of which have legalized MMJ) in the face of Congressional spending bills meant to de-fund such actions. In doing so, the court reaffirmed Congress’s intent to halt federal enforcement measures against medical marijuana providers in states that have legalized and regulated MMJ. Since 2014, Congress has continued to prohibit the DOJ from using appropriated funds to pursue federal enforcement actions against state-compliant medical marijuana providers and businesses. This ruling represents the highest judicial approval of that legislation as an effective means of curbing federal crackdowns on state-legal medical marijuana programs.

The court did, however, articulate the following two important points that significantly limit the benefit of this ruling for many members of the cannabis industry (especially for those on the recreational side):

  1. The court’s ruling applies only to medical marijuana. No federal appellate-level court has directly endorsed, tacitly or otherwise, state-legal recreational cannabis markets. This implicates much of the cannabis community, especially as medical programs are set to yield to or merge into recreational programs in a number of states that have adopted cannabis reform.
  2. The court ordered that the consolidated cases be remanded to the lower courts to investigate whether the appellants were, in fact, in full compliance with their states’ laws regarding medical cannabis. This should give medical marijuana suppliers, many of whom are already wary of IRS rule 280E, plenty of reason to fully comply with all state laws and regulations regarding medical marijuana.

Despite its limitations, U.S. v. McIntosh is a favorable ruling for the cannabis industry, both medical and recreational. Quite simply, DOJ’s enforcement of the federal Controlled Substances Act cannot occur without the necessary funds to do so and, in making its ruling, the Ninth Circuit Court of Appeals has affirmed Congress’s intent to prohibit executive agencies from using appropriated funds for exactly that purpose.

This ruling is a decidedly insufficient remedy for cannabis prohibition, but it does reduce the risk of federal raids for medical cannabis businesses in those states within the Ninth Circuit’s purview (which is all of the states listed above except Idaho). The ruling also shows that even our country’s highest courts will not just rubber stamp everything the federal government does against cannabis.