Cannabis Musings - December 2, 2024
There's no right to talk about cannabis.
Friends, just a quick note as we head into MJBizCon week. As has been reported by a number of outlets, the federal courts still don’t want to make our lives easier. In a recent decision of the U.S. Court of Appeals for the Fifth Circuit (on direct appeal from the federal trial court), we learn that, although you can yell “fire” in a crowded theater in Mississippi (really!), you can’t advertise cannabis there. Why? Well, because cannabis is illegal.
A Mississippi-based dispensary claimed that the state’s “medical-marihuana [sic]” law limiting nearly all cannabis advertising (other than posting a website and on social media, logos, some sponsorships, and phone book listings (really?)), violates the First Amendment’s right to free speech. Citing fairly well-established Supreme Court precedent, protections for commercial speech only run to “lawful activity.” Again, cannabis is illegal. So, no protection.
(The court does note that a Washington state appellate court drew a different conclusion in 2022, but rejects that decision with the equivalent of judicial trash talk, saying that state court’s “brief analysis was largely ipse dixit” (an unsupported assertion), “not persuasive”, and “incongruous” with federal law, offering an explanation that “makes little sense.” In other words, it’s dreck. Legal nerds live for this stuff.)
A well-argued, simple conclusion. It makes sense from a policy perspective that you ought not to be able to advertise, say, your Ponzi scheme, because consumers could be confused and deceived about the legality of said scheme. On the other hand, from a practical perspective, cannabis is kind of different from other illegal trades. Put aside the fact that there’s little rationality to Mississippi’s limitation (why would they allow licensed cannabis businesses to operate, but not provide them with the basic tools of commerce?). The federal government is allowing state-licensed commercial cannabis to occur (even as a matter of grace), so why shouldn’t a federal court recognize that there’s a tangible policy and consumer protection difference here? As far as I’m aware, no states have legalized, licensed Ponzi schemes, but they have legalized cannabis. Nevertheless, the one policy argument trumps the other, and, besides, why would a federal appellate court step outside the box when it doesn’t have to?
Now, if the Canna Provisions case (the “Boies lawsuit” that’s looking to get the Supreme Court to overturn Raich and find that the Controlled Substances Act doesn’t apply to state-licensed intrastate cannabis activities) were to succeed (of which I’m skeptical, but would love to be wrong about), that would create a very interesting law school exam problem for this first amendment case. Cannabis would still be illegal under the CSA in some circumstances (interstate), but not others (intrastate). How does that fit into the Supreme Court’s commercial speech regime? I’ll leave that to friends of the newsletter, the International Cannabis Bar Association, to discuss at their MJBizCon Soiree this week.
Once again, the quantum duality of cannabis rears its ugly head – it’s both illegal and highly regulated at the same, so we get to do business, sort of, but don’t enjoy the same rights and protections that run to nearly everyone else. And people wonder why it’s so hard to make money in this industry.
© 2024 Marc Hauser. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. The foregoing represents my own views and not those of Jardín.