Cannabis Companies Sue U.S. Attorney General Over Federal Cannabis Laws

A group of Massachusetts-based cannabis companies are suing U.S. Attorney General Merrick Garland over federal cannabis laws, arguing the laws infringe on state powers, harms their business, and threatens the businesses’ safety because the laws force them to operate entirely in cash.  

The plaintiffs include Canna Provisions, Inc., Wiseacre Farm, Inc., Verano Holdings Corp., and Gyasi Sellers, an individual who operates a cannabis courier business.

The lawsuit points to a 2005 Supreme Court decision (Gonzales v. Raich) that found because Congress intended to “eradicate” cannabis from interstate commerce, including both economic and noneconomic uses of cannabis, the federal government had a rational and therefore lawful purpose in intruding on the states’ own cannabis regulation; however, the lawsuit contends that “in the decades since that decision, Congress and the Executive Branch have abandoned any intent to ‘eradicate’ marijuana.”

“Numerous states have also implemented programs for regulated marijuana that is not fungible with, and is distinguishable from, illicit interstate marijuana. Despite these changes, the federal criminal prohibition on intrastate marijuana remains in place, an unjustified vestige of a long-abandoned policy. This unjustified intrusion of federal power harms Plaintiffs, threatens the communities they serve, and lacks any rational purpose.” — Canna Provisions, Inc., GYASI Sellers, Wiseacre Farm, Inc., Verano Holdings Corp., v. Merrick Garland

The plaintiffs allege their businesses have been harmed by federal cannabis prohibition. Sellers says his businesses are unable to obtain Small Business Association (SBA) loans because the agency deems cannabis businesses are “ineligible for SBA assistance” regardless of whether they comply with state law. Canna Provisions contends it has been barred from MassHire, one of the state’s career services organizations, from posting jobs or running workshops and that company employees and officers have had personal bank accounts shut down or mortgages declined because they work with cannabis. Wiseacre Farm claims it was unable to lease lands from a willing Massachusetts farmer because the farmer feared losing federal agriculture grant money.

“All of these harms, along with numerous other harms to Plaintiffs alleged herein, are caused by the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana,” the lawsuit states.

The lawsuit further contends that the federal ban on cannabis results in punitive taxation and eliminates state-regulated cannabis businesses’ rights under federal law because companies are not allowed to claim deductions or credits on federal taxes and are unable to trademark their products.

The plaintiffs seek to have the Controlled Substances Act, as it relates to cannabis, ruled unconstitutional and prohibit the federal government, namely the attorney general, from enforcing the law “in a manner that interferes with the intrastate cultivation, manufacture, possession, and distribution” of cannabis under state laws.