November 10, 2023

Is the Controlled Substances Act UNCONSTITUTIONAL when it comes to Cannabis?

Constitutional Challenge to the CSA

Constitutional law to the rescue! Is the CSA (Controlled Substances Act) unconstitutional as applied to cannabis or marijuana?

Hello, I’m Morgan Davis, a cannabis attorney based in Raleigh, North Carolina. Let’s talk about how to keep your business protected and thriving.

Love for Constitutional Law

Alright, guys, we’ve talked before about how I am a statutory interpretation nerd when it comes to law. I am also a lover of constitutional law; it’s my favorite class in law school.

As a criminal defense attorney, constitutional law was the best part of an argument. Let’s delve into a lawsuit recently filed in federal courts by several cannabis companies challenging the constitutionality of the Controlled Substances Act.

Unconstitutional Overreach Allegations

This lawsuit claims that the stranglehold placed on the cannabis industry by the federal government through the CSA is reaching beyond interstate commerce into intrastate commerce, constituting an unconstitutional overreach of Congress’s authority.

Examples of Industry Injury include the inability of cannabis businesses to use 280E in their federal tax exemption, leading to significantly higher taxes than other businesses.

Challenges in Access to Financial Services

Cannabis businesses face challenges in accessing normal financial institutions, including banking and payment processing, due to federal regulations. The lawsuit explores the ongoing issues despite legislative attempts like the SAFE Banking Act.

With limited access to traditional financial tools and insurance, cannabis businesses face challenges securing vehicles, real estate, and addressing employee issues. The burden is heightened by having substantial cash on hand, making them targets for criminal activity.

The Lawsuit’s Legal Asks

The lawsuit seeks two main outcomes: a declaratory judgment declaring the CSA unconstitutional as applied to the manufacturing, distribution, and sale of cannabis in intrastate commerce, and a prevention of the CSA’s future application.

The Road Ahead

No matter the case’s outcome, it’s poised to be a significant development for the cannabis industry. Stay tuned for updates as we closely follow this case, expecting an update in about 180 days.

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