A coalition of cannabis operators and investors, including some of the nation’s largest multistate operators, has taken legal action against U.S. Attorney General Merrick Garland. They argue that the federal government has no legitimate basis for enforcing the Controlled Substances Act (CSA) within state-regulated, intrastate cannabis operations.
The lawsuit’s central aim is to prevent the federal government from applying the CSA in a way that disrupts the cultivation, manufacture, possession, and distribution of cannabis at the intrastate level, in compliance with state laws.
David Boies, Chairman of Boies Schiller Flexner LLP, stated that the federal criminalization of regulated marijuana commerce unfairly burdens legal businesses, promotes illegal production and sales, and denies small legal marijuana enterprises access to crucial resources and normal banking regulations. This forces them to rely on cash transactions, posing risks to their safety and community well-being.
The legal action argues that the federal government lacks the authority to regulate purely intrastate commerce, the primary mode of operation for all state-level cannabis markets. The lawsuit was filed in the United States District Court for the District of Massachusetts, Western Division, by the law firms Boies Schiller Flexner and Lesser, Newman, Aleo & Nasser LLP.
Key plaintiffs include Gyasi Sellers, CEO and founder of Treevit, Canna Provisions, Wiseacre Farm, and Verano Holdings. Foundational supporters of the suit include Ascend Wellness Holdings, TerrAscend, Green Thumb Industries, Eminence Capital, Poseidon Investment Management, and other prominent industry players.
This legal challenge is based on the assertion that the Controlled Substances Act infringes on state sovereignty by unlawfully interfering with state-run cannabis businesses. It has resulted in decades of harm, business failures, job losses, and unsafe working conditions.
The lawsuit aims to reaffirm the rights of Massachusetts and other states to regulate cannabis within their borders and to establish corresponding limitations on the federal government’s authority to regulate commerce. It argues that the Controlled Substances Act oversteps the federal government’s power to regulate commerce, as defined by the Interstate Commerce Clause of the Constitution.
Meg Sanders, CEO and co-founder of Canna Provisions, emphasized the importance of equal treatment for cannabis businesses, placing them on a level playing field with any other small enterprise in Massachusetts.
As the cannabis industry grows, it faces challenges unique to regulated industries, and this lawsuit represents a landmark step in addressing these challenges and defending the rights of state-regulated cannabis operations.