A federal appellate court has set the date for oral arguments in a case aimed at ending the U.S. government’s prohibition on marijuana, scheduling the matter for December 5—three days after a separate hearing on the Biden administration’s proposed rescheduling of marijuana.
The U.S. Court of Appeals for the First Circuit issued the calendaring notice in the lawsuit on Wednesday, announcing that arguments will be held at 9:30 a.m. in a Boston courthouse. The court clerk said in the announcement that the First Circuit will “provide live audio access to such arguments to the public” and noted that there would be no continuance, or delay in the case, “except for grave cause.”
The lawsuit was filed in the U.S. District Court for the District of Massachusetts, Western Division, by multi-state operator Verano Holdings Corp. and the Massachusetts-based cannabis businesses Canna Provisions and Wiseacre Farm, along with Treevit CEO Gyasi Sellers. The groups argue that the government’s ongoing prohibition on marijuana is unconstitutional.
The companies argue on appeal that Congress in recent decades has “dropped any assumption that federal control of state-regulated marijuana is necessary.”
“Congress has abandoned its goal of eradicating marijuana and has, in fact, expressly exempted it from federal enforcement in certain circumstances,” the companies’ opening brief said, pointing to policies embodied in a congressional budget rider that prevents federal funds from being used to interfere with state-legal medical marijuana as well as federal lawmakers’ decision to allow marijuana legalization to proceed in the District of Columbia.
In light of those actions, the brief asserts, “the CSA’s ban as applied to state-regulated marijuana cannot be upheld today.”
An earlier press release noted that other companies—including Ascend Wellness Holdings, TerrAscend, Green Thumb Industries, Eminence Capital and Poseidon Investment Management—are “foundational supporters” of the suit.
Jason Wild, founder of TerrAscend, welcomed Wednesday’s announcement of oral arguments in the case. “Great news,” he wrote on social media. “The court does not always hold oral argument on an appeal, nor hold it this quickly.”
Boies case update:
Great news! The First Circuit just scheduled oral arguments in our appeal for December 5 at 930amin Boston. This is a very welcome development. The court does not always hold oral argument on an appeal, nor hold it this quickly. The December 5 date means…— Jason Wild (@JasonGWild) October 23, 2024
The law firms Boies Schiller Flexner LLP and Lesser, Newman, Aleo & Nasser LLP are representing the plaintiffs. David Boies, chairman of the former firm, has a long list of prior clients that includes the Justice Department, former Vice President Al Gore (D) and the plaintiffs in a case that led to the invalidation of California’s ban on same-sex marriage, among others.
In a separate filing in the case earlier this month, lawyers at the Department of Justice (DOJ) warned that the companies’ challenge, if it succeeds, would “frustrate” the planned move of marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA), effectively render Congress powerless to regulate marijuana if it’s rescheduled.
“Plaintiffs’ position would also frustrate the Department’s proposal to place marijuana on Schedule III of the CSA,” DOJ said. “Under plaintiffs’ theory, Congress would lack congressional authority to regulate marijuana as a Schedule III drug for the same reasons that it could not regulate marijuana as a Schedule I drug.”
This summer, a district judge dismissed the challenge, ruling that while there were “persuasive reasons for a reexamination” of the current scheduling of cannabis and that the plaintiffs had standing to bring the suit, the court’s hands were effectively tied by the Raich decision upholding the government’s authority to regulate substances even within state borders.
The dismissal didn’t come as a particular surprise to attorneys for the marijuana companies, who had generally indicated that they expected the case to move up to higher courts, including, eventually, the Supreme Court. Days after the district court’s ruling, attorneys filed notice of their appeal.
At the time, Josh Schiller, a lawyer on the case, called the district court decision “thoughtful” and said that “on appeal we will continue to press our case that the federal government lacks any rational basis for banning state-regulated marijuana.”
Central to the case is the degree to which in-state cannabis activity affects interstate commerce. Lawyers for the government, for example, have previously argued that cannabis legalization attracts out-of-state tourists.
DOJ argued in a filing in April that “it is rational to conclude that the regulated marijuana industry in Massachusetts fuels a different kind of marijuana-related interstate commerce: marijuana tourism.”
“As the Supreme Court held decades ago, Congress has the authority to regulate businesses that cater to tourists from out of state, even if the businesses’ transactions occur wholly in-state,” DOJ said in the brief.
Plaintiffs, meanwhile, contended the Constitution’s Commerce Clause should preclude DOJ from interfering in state-legal activity because it is regulated within a state’s borders.
Even while dismissing the case, the district court ruled that plaintiffs indeed had standing to bring the lawsuit.
“Plaintiffs have alleged they variously engage in the cultivation, manufacture, distribution, and possession of marijuana, wholly within Massachusetts and the CSA makes such activity a federal crime,” the decision says. “In the absence of any dispute regarding redressability, the court finds Plaintiffs have demonstrated that they have standing under Article III to challenge the portions of the CSA applicable to intrastate activities related to marijuana.”
“The court also finds Plaintiffs have shown there is a causal connection between their economic injuries and the CSA,” the judge said. “When credited, Plaintiffs’ detailed allegations about their financial injuries meet that burden. Though individual decisions by specific third parties are the final link in the causal chain, the economic injury actually flows from the multitude of similar decisions made by many third parties, all responding to the CSA.”
Nonetheless, the district court sided with the government in its motion to dismiss based on a failure to state a claim for relief.
“Given the scale of Plaintiffs’ operations, the court cannot find Congress lacks a rational basis for concluding Plaintiffs’ activities substantially affect interstate commerce without ignoring the Supreme Court’s broadly-worded holding” in Gonzales v. Raich, the court said.
It will now be up to the First Circuit to decide whether to uphold the lower court’s ruling or confront more directly whether broad federal cannabis prohibition is constitutional.
Read the First Circuit’s notice of oral argument in the case below:
Photo elements courtesy of rawpixel and Philip Steffan.
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