A group of cannabis companies based in Massachusetts has initiated legal action against U.S. Attorney General Merrick Garland, challenging the constitutionality of federal cannabis laws. The plaintiffs, which include Canna Provisions, Inc., Wiseacre Farm, Inc., Verano Holdings Corp., and Gyasi Sellers, an individual operating a cannabis courier business, contend that federal cannabis laws are an unjustified intrusion on state powers and have resulted in numerous detrimental consequences for their operations.
The lawsuit references a 2005 Supreme Court decision, Gonzales v. Raich, which upheld federal cannabis prohibition by asserting that Congress aimed to “eradicate” cannabis from interstate commerce, including both economic and noneconomic uses. However, the plaintiffs argue that Congress and the Executive Branch have shifted away from the goal of eradicating cannabis over the decades. Many states have implemented regulated marijuana programs that are distinct from illicit interstate marijuana trade, rendering federal interference unjustified.
The plaintiffs claim their businesses have suffered significant harm due to federal cannabis prohibition. Gyasi Sellers’ cannabis courier business, for example, has been unable to secure Small Business Association (SBA) loans because the agency deems cannabis businesses “ineligible for SBA assistance,” regardless of their compliance with state law. Canna Provisions alleges it has been barred from using MassHire, a Massachusetts career services organization, to post job listings and run workshops. Moreover, employees and officers of the company have had personal bank accounts closed or mortgage applications denied due to their association with cannabis.
Wiseacre Farm encountered difficulties leasing land from a willing Massachusetts farmer who feared losing federal agriculture grant money by engaging with a cannabis business. Additionally, the federal ban on cannabis leads to punitive taxation, depriving state-regulated cannabis businesses of deductions and credits on federal taxes and prohibiting them from trademarking their products.
The plaintiffs are seeking to have the Controlled Substances Act, as it pertains to cannabis, declared unconstitutional. They aim to prohibit the federal government, particularly the attorney general, from enforcing the law “in a manner that interferes with the intrastate cultivation, manufacture, possession, and distribution” of cannabis in accordance with state laws.
This lawsuit highlights the ongoing tension between federal cannabis prohibition and state-regulated cannabis industries, shedding light on the profound legal and financial challenges faced by cannabis businesses.