News and Best Practices

Federal Appeals Court to DOJ: Back Off…for Now

August 23, 2016

LegalIn United States v McIntosh, the Court of Appeals for the Ninth Circuit made a decisive ruling that helps bolster protection for dispensaries and medical marijuana professionals. The ruling essentially bans the U.S. Department of Justice from prosecuting those professionals who are complying with state laws.

On Aug. 16, 2016, a panel of three judges for the Ninth Circuit—which encompasses California, Washington, Oregon, Alaska, Hawaii, Nevada, Arizona, Montana, Idaho and Guam—decided unanimously that the DOJ can continue with prosecutions only if it can prove that the appellants were in fact violating state medical marijuana laws.

The decision comes after the panel approved the consolidation of 10 appeals cases, all of which were cases against dispensaries or cultivators who were indicted and charged with federal criminal offenses for violating various aspects of the Controlled Substances Act. The underlying cases involved owners of four dispensaries in California, cultivators of a 60-acre legal grow operation in California, and cultivators of a large-scale legal grow operation in Washington state. In each case, the appellants argued that they were complying with state regulations.

While medical marijuana may still be illegal under federal law, the appellants argued that the DOJ was violating federal regulations and the U.S. Constitution by prosecuting them.

DOJ in violation of 2014 Congressional rider

The appellants argued that the DOJ was violating the Appropriations Clause of the Constitution (Article I, Section 9, Clause 7), which holds that no money can be paid out of the U.S. Treasury unless it has been appropriated by Congress. In December 2014, Congress passed a rider to an appropriations bill, which was meant to fund the U.S. government through the year, with extensions in 2015 and 2016. The rider contained conditions on how the money should be spent. In the rider, Congress included a clear stipulation that the funds being granted to the DOJ could not be allocated for the purpose of trying to prevent states that have legalized medical marijuana from implementing their laws.

The DOJ argued that it interpreted the stipulation to mean that it couldn’t go after the actual states but it could go after individuals who were violating federal laws. The court was not persuaded, and it held that DOJ’s actions prevented these states from implementing laws that authorize use, distribution, possession or cultivation. Rather than dismiss all charges, the court sent the cases back to their respective District Courts to be ruled on whether all state laws were complied with.

While the decision definitely should be celebrated, it is not an absolute victory for medical marijuana professionals. Each federal offense of the Controlled Substances Act carries a statute of limitations of five years to prosecute. So, if Congress passes a new appropriations bill without this stipulation and allows funding for prosecutions, these types of cases could begin to be prosecuted again. The decision also means that strict compliance with state laws is required to avoid federal prosecution under this decision.

By Devon Landis
Dispensary Management Today articles are for informational purposes only and should not be considered legal guidance or advice on dispensary operations. You should contact an attorney or a qualified cannabis consultant for specific compliance and dispensary/retailing advice.
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