The United States government has “undermined” federal cannabis prohibition. This sentiment is at the heart of a forceful statement from Supreme Court Justice Clarence Thomas on Monday, as part of the Court’s denial of a petition to reconsider a lower court’s ruling in the case of Standing Akimbo LLC et al. v. U.S.
The case, which involves a Colorado cannabis company and the Internal Revenue Service, is centered on a tax code that has been a thorn in the side of the country’s cannabis industry since it first took shape. Revenue Code Section 280E does not allow businesses dealing with an illegal substance (in this case, cannabis) to make the same deductions as other businesses.
This is not the first time this Code has been challenged in court. And, it is not, as Cannabis Wire has detailed, the only way in which federal cannabis prohibition has created untenable friction in the dozens of states that have now legalized cannabis for medical or adult use. But it is the first time that Thomas has offered such a detailed critique of the ways in which federal cannabis prohibition is enforced.
Thomas began by revisiting the Court’s 2005 decision in a case known as Gonzales v. Raich, which “held that Congress’ power to regulate interstate commerce authorized it ‘to prohibit the local cultivation and use of marijuana.’” This decision stood on the foundation of a “‘comprehensive’ regime” and a “closed regulatory system.”
Much has changed in the U.S. since the Raich case, namely that 19 states have passed laws to legalize and regulate cannabis sales for adults, including four this year.
“Whatever the merits of Raich when it was decided,” Thomas continues, “federal policies of the past 16 years have greatly undermined its reasoning. Once comprehensive, the Federal Government’s current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana. This contradictory and unstable state of affairs strains basic principles of federalism and conceals traps for the unwary.”
Thomas goes on to write that, since Raich, the federal government has “sent mixed signals on its views,” from the Obama-era Department of Justice memos promising a hands-off approach to state-legal cannabis activity, to legislation in Congress that blocks the DOJ from “spending funds to prevent states’ implementation of their own medical marijuana laws.”
This approach is perhaps, Thomas continues, “why business owners in Colorado, like petitioners, may think that their intrastate marijuana operations will be treated like any other enterprise that is legal under state law.” But instead, “petitioners have found that the Government’s willingness to often look the other way on marijuana is more episodic than coherent.”
The friction created by this approach doesn’t stop at taxes. As Cannabis Wire has reported, and as Thomas notes, there are issues ranging from gun ownership to banking, the latter which led to the passage of the SAFE Banking Act in the House of Representatives in 2019 and again this year, the first cannabis-related bill to see passage in either chamber of Congress.
“I could go on,” Thomas writes after listing these myriad legal issues that have arisen under the umbrella of cannabis in the United States.
“Suffice it to say, the Federal Government’s current approach to marijuana bears little resemblance to the watertight nationwide prohibition that a closely divided Court found necessary to justify the Government’s blanket prohibition in Raich,” he concludes.
Therefore, “If the Government is now content to allow States to act ‘as laboratories’ … then it might no longer have authority to intrude on ‘[t]he States’ core police powers . . . to define criminal law and to protect the health, safety, and welfare of their citizens.’
“A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government’s piecemeal approach.”