Cannabis Musings - February 4, 2025
Federal appellate courts still don't really like cannabis.
Friends, back in May 2023, we talked about whether it’s a good idea to sue the federal government over cannabis:
My response is … usually something like “Sure, anyone can file a lawsuit, but it’s almost certainly an expensively bad idea, and, by the way, that’s not legal advice.”
We looked at some failed cases and I quoted a Yiddishism illustrating the utter pointless of the endeavor. So, it should come as no surprise to readers of these Cannabis Musings that the U.S. Court of Appeals for the Sixth Circuit recently denied yet another attack on 280E. The defendant, guilty of tax crimes, argued on appeal that Congress “lacks the constitutional authority to regulate marijuana and that its tax laws impose an unconstitutional “penalty” on marijuana sales.”
The Sixth Circuit made short shrift of the defendant’s arguments, apparently so blasé that it included a header blaring “NOT RECOMMENDED FOR PUBLICATION.” What’s worth noting is the court’s commentary on Gonzales v. Raich, the Supreme Court case that’s at the heart of the Canna Provisions litigation. We’ve talked about Canna Provisions before, the effort to get the Supreme Court to effectively overturn its 2005 decision in Raich by arguing that the Controlled Substances Act should no longer apply to intrastate cannabis commerce because federal policy towards cannabis has changed over the past two decades.
One of the hooks upon which Canna Provisions hangs its proverbial hat is some non-binding commentary (condescendingly referred to by lawyers as “dicta”) in a 2021 case by Justice Thomas dissenting from a denial of appeal (which is about as dicta as you can get) that “[w]hatever the merits of Raich when it was decided, federal policies of the past 16 years have greatly undermined its reasoning.” Ever since Justice Thomas wrote those words, cannabis lawyers have understandably loved to cite them like a Talmudic scholar cites Rashi.
The tax crimes defendant also cited Justice Thomas’ commentary in an attempt to argue that Congress lacks the power to regulate cannabis. The appellate court disagreed:
At the time of Raich, Richmond suggests, Congress closely regulated marijuana distribution. Now, however, Congress has effectively adopted a patchwork regulatory regime tied to each State’s marijuana laws. These legal changes, according to Richmond, permit us to depart from Raich. Indeed, Justice Thomas has suggested that the Court should reconsider Raich on these grounds. … But it is at least debatable whether the changes matter under the “deferential review” that Raich gave to Congress’s exercise of its commerce power. … The changes thus do not make Raich’s invalidity “clear or obvious” under the plain-error test.
Granted, the defendant here had to clear a very high bar on appeal because his lawyer didn’t raise the underlying constitutional challenge to 280E at trial, meaning that he had to show that “Congress committed a ‘clear or obvious’ constitutional violation,” which is usually nigh impossible to do; however, I think it’s worth noting how dismissive the Sixth Circuit was of the policy argument.
We talked about how Canna Provisions is almost definitely not going to succeed at the appellate court level (the First Circuit), because the intermediate appellate court can’t really overturn a Supreme Court case. The goal there is to get the Supreme Court to overturn itself, where, if the case does get accepted for consideration, they have a shot. This Sixth Circuit tax decision does bolster my thesis, however, that federal courts don’t seem to be as taken with Justice Thomas’ perspective as cannabis lawyers are.
I don’t mean to overstate the importance of this tax case in thinking about how Canna Provisions is going to ultimately end up - that all depends upon whether the Supreme Court grants review. But it’s another reminder that federal courts aren’t all that interested in doing our industry any favors.
Be seeing you.
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© 2025 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.