An Oregon marijuana company has filed a federal lawsuit alleging that the state's prohibition on cannabis imports and exports from and into other states breaches the United States Constitution.
On Monday, Jefferson Packing House, LLC, an Oregon-licensed marijuana wholesaler, filed a lawsuit suing state Attorney General Ellen Rosenblum (D), Gov. Kate Brown (D), and the director of the Oregon Liquor and Cannabis Commission.
While the complaint contests the state law prohibiting cannabis exports, the plaintiffs' lawyers sent out a letter to the high-ranking officials named as defendants, urging them to join the effort to obtain a ruling declaring the policy unlawful, arguing that it is in the best economic interests of the state.
The letter states that they acknowledge that marijuana remains prohibited by federal law and that the lawsuit will not reverse that. However, they feel that the State of Oregon must be totally aligned with helping its local marijuana business, so Oregon legislation should no longer restrict marijuana export to other states.
Details Of The Lawsuit
The lawsuit, filed in the United States District Court for the District of Oregon, is based on an interpretation of the Dormant Commerce Clause (DCC) of the United States Constitution. The interpretation is intended to promote competition by prohibiting states from separately regulating interstate trade and commerce, leaving that responsibility solely with Congress.
Green Light Law Group's Andrew DeWeese and Kevin Jacoby wrote on behalf of Jefferson Packing House that under the DCC, for instance, an Oregon legislation restricting the export of grapes (or hazelnuts, semiconductors, and so on) would be invalidated. Hence, they expect a federal court would treat marijuana like hazelnuts, invalidating state laws preventing marijuana export even though it is unlawful under federal law."
Part of their confidence in a federal court ruling in their favor stems from precedents established in a federal appeals court in August.
In that case, the United States Court of Appeals for the First Circuit concluded that Maine's legislation preventing non-residents from operating medicinal marijuana enterprises violated the DCC and was thus unconstitutional. Following that verdict, legal experts predicted that it could have far-reaching repercussions for the interstate cannabis business.
According to the eight-page legal complaint for this latest claim, Oregon's export ban "harms not only Oregon processors, growers, and wholesalers, but also non-residents. These demographics are deprived access to high-quality cannabis products manufactured in Oregon unless they physically go to Oregon to purchase those products."
Similar prohibitions on exporting and importing cannabis are established in legal states across the United States, primarily to protect the states from federal enforcement action. Agencies such as the Justice Department have previously described interstate cannabis trafficking as a national law enforcement priority.
According to the lawsuit, the regulation discriminates against interstate trade by outright barring such transactions, with no valid, nonprotectionist aim, and is thus barred by the Dormant Commerce Clause of the United States Constitution.
According to the report, trying to induce the DOJ to maintain its policy of nonenforcement of state-legal cannabis operations (which equally violate federal law as much as interstate cannabis commerce) to induce perceived enforcement priorities of the federal government raises fatal concerns about separation of powers. This is because not the DOJ (an institution of the executive branch) but only Congress can permit the States to govern interstate commerce.
The complaint added that the export ban is strangling Oregon's marijuana producers and industry players as they cannot tap into the tremendous demand from out-of-state for their Oregon-produced products. The plaintiffs are asking the court to declare the export ban illegal to correct the problem and to enjoin the state from enforcing and implementing the residency permits for dispensaries.
Oregon Is in a Better Position to Profit from Out-Of-State Demand
The letter to Brown and other state representatives emphasizes how Oregon is specially situated to profit from allowing cannabis exports. The letter contends that the state benefits from a spirit of innovation, the near-perfect confluence of geography, profound cannabis entrepreneurship and culture, climate, and smart regulation" that makes it well-suited to become the benchmark by which all others are judged."
The lawyers asked the people, "Will you now cooperate with us as we extend our great state's legacy of fighting against the injustice of federal cannabis prohibition?"
We humbly request that none of you act to defend the Oregon laws that are the subject of our complaint and restrict the export of marijuana in your official roles. Instead, we ask that you join us in praying that the district court rules that these laws are unconstitutional. Together, our meritorious legal action and Oregon's backing will deliver a strong message to our policymakers in Washington.
Although it's uncertain if the state would accept the plaintiffs' offer, Brown has expressed interest in allowing interstate trade in the marijuana industry by signing a measure in 2019 that would let the governor do so once federal law enables it. As a result of that action, two members of that state's congressional delegation filed a bill that would permit a similar activity and bar the Justice Department from meddling in states that already have affirmed agreements to sell cannabis over state lines. However, the proposal did not advance.
Two years after Brown approved the state-level law, a coalition of marijuana advocacy groups started enlisting the support of the business sector to petition the governors of four important West Coast states to request advice from the Justice Department on interstate marijuana commerce. Since then, the governor of New Jersey could now enter into deals to import and export cannabis with other states that have legalized it, according to a measure submitted by Democratic Senate President Nicholas Scutari of New Jersey.
A bill giving the governor of California, Gavin Newsom (D), the authority to enable interstate marijuana commerce was signed by him in September.
There is no legally sufficient cause for any other State or Oregon to prohibit marijuana importation or exportation, it argues. Protecting the local cannabis sector is inherently protectionist and thus clearly unconstitutional under the DCC. However, it's uncertain if the state would accept the plaintiffs' offer.