• 619.866.3444
  • info@socal.law
  • ProVisors
  • Payments
Gupta Evans and Ayres
  • What We Do
    • Bankruptcy
    • Business Litigation
    • Real Estate Litigation
  • Who We Are
  • Our Team
    • Ajay Gupta
    • Chris Evans
    • Jake Ayres
    • Alessandro Nolfo
    • Mike Covington
    • Elontay Collins
  • How We Help
    • Referral Partner Process
    • Legal Proceedings Process
    • Case Stories
  • Resources
    • The Blog
    • Our Events
    • For Lawyers
    • Useful Forms
    • Video Library
  • Payments
  • Get In Touch
  • Search
  • Menu Menu

The Sphinx on Skunk: Justice Thomas Speaks Out(!) on the Inconsistent Enforcement of Federal Cannabis Prohibition

July 21, 2021/in All Blog Posts, Cannabis, Corporate Litigation/by Jake Ayres

They say that war makes for strange bedfellows.  As it turns out, the war on drugs is no exception.  In a recent opinion from the United States Supreme Court, conservative stalwart Justice Clarence Thomas rebuked the federal government’s “half-in, half-out” stance on state-legal cannabis, and strongly implied that said approach was untenable from a federalist perspective.  This criticism of federal drug policy from the right—rather than the left—could be another omen that more cultural conservative objections to state-legal cannabis are yielding to federalism and economic concerns and could also signal a future bipartisan action to provide safer harbor to legal cannabis businesses.

In Standing Akimbo, LLC v. United States, 594 U.S. __ (2021), the Supreme Court, on June 28, 2021, denied certiorari to a medical cannabis dispensary in Colorado attempting to prevent disclosure of certain company records sought by the IRS.  The dispensary was accused by the IRS of impermissibly using 280E of the Internal Revenue Code to deduct business expenses; as the law stands now, cannabis businesses, because they deal in a federally illegal substance, can only deduct the costs of goods sold. 

However, in so doing, Justice Thomas took the opportunity to wag his finger at the inconsistency of federal enforcement of the illegality of cannabis: “[T]he Federal Government’s current approach to marijuana bears little resemblance to the watertight nationwide prohibition that closely divided Court found necessary to justify the Government’s blanket prohibition in Raich.”  Id.  A known advocate for federalist principles, he went on to note that “[i]f the Government is now content to allow States to act ‘as laboratories’ ‘and try novel social and economic experiments,’. . . then it might no longer have authority to intrude on ‘the States’ core policy powers . . . to define criminal law and to protect the health, safety, and welfare of their citizens.’”  Id. (quoting Gonzales v. Raich, 545 U.S. 1, 42 (2005) (O’Connor, J., dissenting)). 

Justice Thomas’s references to Raich (and Justice O’Connor’s dissent therein) is unsurprising given his own dissenting opinion in that case, in which he voiced similar concerns of federal commerce clause power overreach.  Raich, 545 U.S. at 57 (Thomas, J., dissenting).  In Raich, the majority held that the federal government had power under the commerce clause to regulate state-legal intrastate cannabis—that is, cannabis that is grown, distributed, and consumed within a state where it is legal.  Id. at 22. 

Justice Thomas opined that intrastate regulation in that context went beyond the federal government’s commerce clause powers, in that cultivation and consumption of medical cannabis entirely in California was not “commerce” nor interstate.  Id. at 59.  Moreover, although the majority substantially relied on Wickard v. Filburn, 317 U.S. 111 (1942) for the proposition that intrastate commerce that has a “substantial effect” on interstate commerce is within Congress’ regulatory power, Justice Thomas agreed with Justice O’Connor’s criticism of the majority’s reliance on Wickard.  In Justice O’Connor’s dissent, she noted that, unlike Wickard, where the Court was presented with economic studies documenting the effects of personal intrastate wheat cultivation on the interstate wheat industry at large, there was no actual evidence that the small-scale medical cultivation and consumption by appellants had any “substantial effects” on interstate commerce.  Id. at 53-54 (O’Connor, J., dissenting); id. at 67 (Thomas, J., dissenting).  For his own part, Thomas criticized the majority’s apparent use of the Necessary and Proper Clause to hold that exercising federal police powers over intrastate legal cannabis cultivation was “necessary” to avoid a “gaping hole” in the Controlled Substances Act, id. at 21, reasoning that there was no evidence before the Court to suggest that failing to regulate intrastate cannabis cultivation and use would result in an inability to control interstate drug trafficking, id. at 63 (Thomas, J., dissenting), a criticism he alluded to in Standing Akimbo.  594 U.S. at __ (“A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government’s piecemeal approach.”). 

Indeed, these statements—from an eminent conservative, no less—could be a wake-up call for activist litigation to challenge the ruling in Raich, or for Congress to act to provide some measure of legalization or safe harbor to state-legal cannabis operators.  As I have written previously, even if an impact litigant were to challenge Raich on its own rationale—without delving into the more academic discourse of Thomas’s dissent—such a challenge might bear fruit. 

In reaching its final holding that Congress had a rational basis for concluding that intrastate cannabis cultivation would have a “substantial effect” on its ability to regulate interstate cannabis commerce, the Court in Raich explicitly premised its decision upon (1) difficulties distinguishing between state-legal cannabis and illegal cannabis grown elsewhere and (2) “concerns about diversion [of state-legal cannabis] into illicit channels.”  545 U.S. at 22.  As more and more states legalize cannabis in some fashion—36 states have legalized adult-use cannabis, medical cannabis, or both—both of points one and two become weaker and weaker.  That is, as to point one, as legal cannabis packaging becomes more regulated and sophisticated, the visible difference between legal cannabis and illegal cannabis becomes more and more obvious.  As to point two, as more and more states legalize, it becomes less and less likely for legal cannabis to be “diverted” into illicit channels.  For example, nearly the entire Pacific bloc of states—California, Oregon, Washington, Nevada, Arizona, and Colorado—have legalized medical and adult-use cannabis.  Leaving aside state law prohibitions, legal cannabis moved throughout this region is very unlikely to result in “diversion” of legal cannabis “into illicit channels.” 

Although whether this shot across the bow of the federal government’s cannabis enforcement regime will result in or motivate any lasting change—either judicially or legislatively—remains to be seen, the cannabis industry will likely view this statement of support from a somewhat unexpected source as a moral victory.

Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
  • Share by Mail
  • Link to Instagram
https://socal.law/wp-content/uploads/2021/07/pexels-ekaterina-bolovtsova-6077189-scaled.jpg 2560 1707 Jake Ayres https://socal.law/wp-content/uploads/2021/08/gupta-evans-ayres_brand-identity_v4-02.png Jake Ayres2021-07-21 22:29:002022-06-21 20:37:35The Sphinx on Skunk: Justice Thomas Speaks Out(!) on the Inconsistent Enforcement of Federal Cannabis Prohibition
You might also like
MORE Legislation, MORE Problems: The MORE Act to Legalize Cannabis Passes the House
An Offer You Can’t Refuse: Civil Extortion or Demand Letter
Blame Games & Automobiles: Rattagan v. Uber Technologies and the Potential Extension of California’s Fraud Exception to the Economic Loss Rule
An Offer You Can’t Refuse, Part II: No Cash, No Claim
Chapter 420, Part II: Closing the Book on Cannabis-Adjacent Bankruptcy
Back to the Futile: California Court of Appeal Expands Breadth of “Futility Exception” to Prerequisites to Mandamus Claims in Land Use Cases

Search Blogs

Categories

Recent Blogs

  • The First Amendment, Bad Reviews, and You: So You’ve Been Smeared on the Internet – Part IOctober 4, 2022 - 8:49 pm
  • GEA’s Demand Letter to Union Bank Secures Release of Erroneous LoanJune 10, 2022 - 11:43 pm
  • Gupta Evans and Ayres Confirms One of the First Contested Subchapter 5 Bankruptcies in the Southern District of California. In re: Eminent Cycles, LLCJune 10, 2022 - 11:37 pm

Connect

HEADQUARTERS

1620 Fifth Ave #650
San Diego, CA 92101

CONTACT

P: 619-866-3444
F: 619-330-2055
E: info@socal.law

CONNECT

  • Link to Facebook
  • Link to Twitter
  • Link to LinkedIn
  • Link to Instagram
  • Link to Youtube
gupta evans ayres brand identity RGB Vertical White 2
smal bbb Logo
Avvo Small Logo
superlawyers Logo
small userway Logo
SDCBA Logo

© Gupta Evans & Ayres 2022 – all rights reserved

site design by digitalstoryteller.io

1620 Fifth Ave #650
San Diego, CA 92101

P: 619-866-3444
F: 619-330-2055
E: info@socal.law

  • Link to Facebook
  • Link to Twitter
  • Link to LinkedIn
  • Link to Instagram
  • Link to Youtube
gupta evans ayres brand identity RGB Vertical White 2

small userway Logo
smal bbb Logo
Avvo Small Logo
superlawyers Logo
SDCBA Logo

© Gupta Evans & Ayres 2022 – all rights reserved

site design by digitalstoryteller.io

Meet Ajay Gupta – FounderAjay Gupta HeadshotLow Chance of Survival: Scripps Health Data Breach and Negligence Causes of... Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

Accept settings

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refusing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visit to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Other cookies

The following cookies are also needed - You can choose if you want to allow them:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Accept settingsHide notification only