Cannabis business sues over federal ban

NORTHAMPTON — A coalition of cannabis businesses is suing the U.S. attorney general over the federal government’s ban on cultivation, production, possession and distribution, saying it penalizes activities that are legal under state law.

The federal ban means regulated marijuana businesses in Massachusetts and other states can’t use banks or accept credit card payments, and they and their employees are excluded from federal programs and may not be able to get mortgages.

“This is groundbreaking,” Northampton attorney Thomas Lesser said of the lawsuit. “Everyone expects it will go to the Supreme Court.”

The firm of Lesser, Lesser, Newman, Aleo & Nasser, assisted lead attorney Boies Schiller Flexner of New York in representing plaintiffs Gyasi Sellers, Canna Provisions and Wiseacre Farm in the lawsuit filed against Attorney General Merrick Garland in the U.S. District Court of Massachusetts. Sellers is the founder and CEO of Treevit, a cannabis delivery service. Canna Provisions operates two dispensaries, one in Holyoke and one in Berkshire County, and Wiseacre Farm is the Berkshire County grower.

“We want to be treated equally, on a level playing field with every other small business in Massachusetts,” Meg Sanders, CEO and co-founder of Canna Provisions, said in a statement.

The fourth plaintiff, Verano Holdings, does business in Massachusetts.

Boies Schiller principal David Boies is known for three major cases: leading the federal government’s successful prosecution of Microsoft in the late 1990s; his failed portrayal of Democratic presidential nominee Al Gore in Bush v. Gore; and for representing the plaintiff in the case that overturned California’s ban on same-sex marriage.

The case seeks to affirm the rights of Massachusetts and other states to regulate cannabis within their borders and to affirm the corresponding limitations on the federal government’s power to regulate commerce, based on the Interstate Commerce Clause of the Constitution.

The law at issue in the case is the Controlled Substances Act, which prohibits the manufacture, distribution, and possession of marijuana, regardless of whether those activities cross state lines or occur within the borders of a single state.

“This unjustified and unconstitutional ban on intrastate cannabis harms plaintiffs and impedes states’ efforts to provide patients and adults with access to highly regulated and tested cannabis,” the plaintiffs said in a statement announcing the suit.

Lawyers cited a 2005 decision upholding the Controlled Substances Act’s bans on cannabis and noted that circumstances have changed dramatically since then.

“Today, 38 states, including Washington, D.C., have medical or adult cannabis programs with significant regulatory oversight,” the plaintiffs state.

They argue that these regulated cannabis products can be traced back to the seeds from which they were originally grown, and thus easily distinguished from illegal interstate cannabis.

State-regulated cannabis businesses are considered illegal under the Controlled Substances Act and their day-to-day operations are considered federal crimes. They are cut off from numerous federal programs and protections, including small business loans, subject to discriminatory tax penalties, and organizations such as banks and credit card operators refuse to do business with them.

“It’s a cash industry,” Lesser said. “It’s dangerous. It’s not good for anybody.”

People who work for cannabis companies can’t get mortgages and can’t get federal housing, Lesser added.

“Their options are significantly limited,” he said.

The lawsuit calls for the Controlled Substances Act to be declared “unconstitutional as it applies to the intrastate cultivation, manufacture, possession, and distribution of marijuana under state law;” and for the government to be prohibited from enforcing the law in a manner that prevents and is an aspect of the manufacture or distribution of cannabis under state law.

James Pentland can be contacted at [email protected]

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