Unsurprisingly, industry players continue to push the envelope, with the hope that courts will begin recognizing the “realities on the ground,” notwithstanding congressional inaction.
As a result of federal prohibition — tempered by an annual congressional budget rider commonly known as the “Rohrabacher Amendment” which prohibits the Department of Justice from using appropriated funds to interfere with medical marijuana industries that operate in accordance with state law — the cannabis industry in the United States is a patchwork of state laws.
Circuit Court of Appeals is poised to issue the first precedential opinion addressing the constitutionality of state laws that bar or restrict nonresidents from holding cannabis licenses or, in some cases, from even investing in local cannabis businesses.
Maine appealed the decision, urging the First Circuit to find that the Dormant Commerce Clause does not apply to the cannabis industry, which remains illegal under federal law.
cannabis industry, which has evolved as a series of siloed markets in response to the patchwork of state laws.
Supreme Court invited the Solicitor General to submit an amicus brief addressing whether state laws requiring workers to be reimbursed for the cost of medical cannabis to treat work-related injuries are preempted by the federal Controlled Substance Act .
The high courts of New Hampshire and New Jersey, on the other hand, have ruled that reimbursements to medical marijuana patients are permissible despite continued federal prohibition.
It seems unlikely that the Solicitor General, and by extension the DOJ, will take a pro-cannabis stance.
While it appears that, for all intents and purposes, everyone involved continued to operate as though the guidance was never rescinded, it remains the case that the Cole Memorandum was never reinstated by Sessions’ successors.
A recent lawsuit filed in the Central District of California by a cash-in-transit company — Empyreal Enterprises LLC v.
In its January 2022 complaint, Empyreal alleges that law enforcement officers in Kansas, working in conjunction with a DEA task force, wrongfully seized $165,620 in cash proceeds from an Empyreal vehicle.
Empyreal’s suit includes counts of ultra vires — actions by a government agency beyond its legal authority — violations of the Fourth Amendment and due process violations, and seeks to block defendants from unreasonably stopping, searching or seizing Empyreal’s vehicles or their contents.
As more states legalize recreational cannabis, makers of well-known candies and sweets are becoming increasingly concerned about look-alike cannabis products and have become more aggressive in asserting their IP rights.
Terphogz, LLC, filed last May in the Northern District of Illinois, Wrigley alleged that Terphogz’s Zkittlez-branded cannabis products and marketing strategy infringed upon its Skittles trademark.
In November 2021, the Northern District of Illinois rejected Terphogz’s motion to dismiss, allowing the case to proceed to the next phase of litigation.
A recent investigation into a chain of smoke shops operating in New Jersey, which legalized adult-use cannabis in February 2021, serves as an illustrative cautionary tale.
The arrests followed an investigation by the Bergen County Prosecutor’s Office, in which it is alleged that a business called Dirty Jerzy Supplies LLC was operating as an illegal marijuana dispensary selling recreational cannabis products.
The cannabis industry is going to continue experiencing unique challenges, and growing pains, as long as federal prohibition remains the law of the land.
He contributed the chapter, “Banking and Investment Considerations for Cannabis Businesses” in “Health Care and the Business of Cannabis: Legal Questions and Answers,” .
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