There Are Bigger Fish to Fry. So, What Mr. President?

On December 11, 2012, Barack Obama let the nation know that the Department of Justice (DOJ) had “bigger fish to fry,” rather than use Federal resources to pursue recreational cannabis users. But I-502 stakeholders and potential investors in Washington (and Colorado) want to know—how will the DOJ treat producers, processors, and retailers under new recreational laws?

For weeks now, I-502 stakeholders have closely watched Attorney General Eric Holder for any pronouncement on how he and the DOJ plan to treat I-502. Just recently, Holder and his legal team wrapped up their review of the Initiative, promising that Washington would know “soon” how the Feds plan to handle the new law. Many believe the classic knock-down, drag-out fight between Washington State and the Federal government is imminent, leaving the recreational cannabis industry at the whimsy of the Feds because of past crackdowns on State-sanctioned medical cannabis facilities and because of the apparent conflict between State and Federal drug laws.

It goes without saying that the Feds’ duplicitous enforcement record, coupled with the same overarching conflict between States’ rights and the Feds, currently plague those interested in the future success of I-502.

Breaking Down ‘The Conflict’: The Legal Arsenal of the Federal Government.

First and foremost, the DOJ could sue Washington State in Federal Court in an effort to strike down the provisions of I-502 that allegedly conflict with Federal law.

a. The Supremacy Clause, Preemption, and a “Positive Conflict.”

Under the Constitution’s Supremacy Clause, Federal law trumps State law when the two are in “positive conflict.” A “positive conflict” arises only if State law requires an individual to do something that violates Federal law. Nonetheless, there exists a presumption against Federal preemption concerning “historic police powers of the States.” State medical cannabis laws have traditionally been afforded this presumption, as they are enacted pursuant to general state police powers in defining criminal conduct and regulating public welfare, health, and safety.

The Feds could argue that a “positive conflict” exists between I-502 and Federal law because I-502 mandates a for-profit regulatory system for the production and dissemination of a Schedule I controlled substance. According to the backers of the Initiative, however, I-502 doesn’t require anyone to do anything that violates Federal law because it:

1) doesn’t require changes in penalties for violations of Federal
law;
2) redefines only the parameters of criminal activity concerning
cannabis in Washington state; and
3) doesn’t force anyone to produce, process, or retail cannabis in
violation of Federal law.

And while the Initiative does require the Liquor Control Board (LCB) to regulate producers, processors, and retailers, relevant case law out of California clearly permits a State “to create licensing systems that allow it to distinguish between people engaged in permissible conduct and those who are breaking the law.” To its advantage, I-502 is pretty clear: licensed producers, processors, and retailers are not violating applicable criminal laws while anyone doing the same without a license is.

When analyzing Federal preemption, it’s also important to note that courts have recognized the concept of “dual sovereignty” between MMJ States and the Federal government. Meaning that courts treat States with MMJ laws and the Feds as two separate governing powers where each is permitted to enact separate and independent criminal regimes with separate and independent enforcement mechanisms. The result is that certain conduct may be prohibited under one governing power and not the other. The pro-Initiative camp would likely argue that dual sovereignty should protect the Initiative where the Federal government is still free to enforce all of the current penalties under the Controlled Substances Act despite the Initiative’s passage.

While preemption may not carry the day for the Feds in Court, the Feds may also look to the infamous Commerce Clause to support their attack on I-502.

b. Commerce Clause

Though Congress cannot usually regulate strictly intrastate activity, under the Constitution’s Commerce Clause, Congress has been able to regulate such activity when the activity in question has “a substantial effect on interstate commerce.” In the case of Gonzales v. Raich , the U.S. Supreme Court ruled that a qualifying patient who grew cannabis on her property for her own medical use (without any intention of selling or donating it, all in compliance with California MMJ laws) had a substantial effect on interstate commerce. Specifically, the Court noted that “. . . even small amounts of marijuana grown at home—though intended for personal medicinal use—would likely be diverted into the national market and frustrate Congress’s goal of strictly controlling overall supply.” The Court ultimately ruled that the Federal government had the authority to prohibit the use and possession of cannabis pursuant to the Commerce Clause and, ever since that ruling, the Feds have used the Commerce Clause to justify countless raids on State-permitted MMJ facilities.

If the Federal government can use the Commerce Clause to eliminate private, at-home cannabis cultivation and use, there’s nothing to stop them from attempting to make the same arguments against I-502. Washington would then have to prove up its case that implementation of the Initiative only effects intrastate commerce. That is no small feat given the fact that the Initiative raises major issues surrounding the over-production of cannabis and leakage into other State markets. Still, if Washington can demonstrate enough regulatory controls on I-502 participants, the Feds may not head into Court to gut the entire program pursuant to the Commerce Clause. Especially when they have other (more profitable) means of enforcement should they so choose.

If the DOJ Doesn’t Go to Court, What Could Happen Next?

a. Random Raids.

If the notorious Ogden memo taught the medical cannabis industry anything, it was that the Feds are all over the map when it comes to enforcement of the Controlled Substances Act (regardless of whether the Feds cite preemption or the Commerce Clause for justification). If the DOJ doesn’t face down Washington in Court, it also has the option of engaging in its classic random raids like the ones we continue to see in the MMJ industry. This type of enforcement policy makes entirely no sense; it unjustly punishes legitimate cannabis enterprises while enriching the Drug Enforcement Agency, wastes incalculable amounts of taxpayer dollars, and only serves to undercut well-recognized States’ rights. If the DOJ again opts for this kind of back door enforcement with recreational use, it goes without saying that the cannabis-friendly masses in Washington and Colorado will be uproarious at the DOJ’s unrelenting pursuit of the failed War on Drugs.

b. Exercising Conservative Prosecutorial Discretion.

Thanks to the Tenth amendment and principles of Federalism, the Federal government cannot mandate that States support or participate in enforcing the Federal Controlled Substances Act. The Federal government is also vested with an unparalleled amount of prosecutorial discretion when it comes to whether it will prosecute violations of its own laws. Another bonus? The DOJ has no obligation to prosecute all violations of Federal law. As a result, because the DOJ has broad discretion not to prosecute violations of Federal law, there remains a glimmer of hope for I-502 stakeholders that the Feds will actually cool their heels on future enforcement policy.

But Federal abstention from enforcement hinges almost entirely on the regulatory rules set forth by the LCB. The LCB must realize that cannabis is not similar to alcohol when it comes to production, processing, and effects of use. As a result, the LCB will need to engage in a serious study of cannabis in order to successfully regulate it to the point that the Feds are convinced Washington can effectively implement and police its own above-board cannabis economy. With only a year to get it right, the LCB has its work cut out for it.

c. Then There’s Politics.

The immense regulatory task facing the LCB aside, the timing of the passage of these laws is uncanny and not to be ignored with not only one, but two States, legalizing the recreational use of cannabis, with a slew of others States considering cannabis legalization bills. In Washington, we have a new Governor-elect and Attorney General who plan to not only implement I-502, but who also plan to defend it in Court if the Feds intervene. And an overwhelming majority of Americans believe that the Federal government should not enforce Federal law against Washington and Colorado.

Because Washington’s recreational cannabis laws were born out of a people’s initiative (“direct democracy in action”), and Colorado’s were the product of a State Constitutional amendment, the Feds must tread carefully when determining their enforcement strategy. States were intended to be laboratories of democracy; incubators for democratic experiment. While the Federal government is no stranger to throwing its weight around to enforce its own (sometimes arbitrary) laws, to directly put asunder States’ rights when the American public clearly supports cannabis legalization, especially when the people of Washington and Colorado are prepared to tow the line on the issue, certainly calls into question the very principles of democracy for which our country stands. While there may be “bigger fish to fry,” States’ regulation of recreational cannabis should be let off the lure.

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1 Qualified Patients Ass’n v. City of Anaheim, 187 Cal. App. 4th 734, 115 Cal. Rptr. 3d 89 (2010).
2 Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947).
3 New Approach Washington on Federal Laws.
4 Qualified Patients Ass’n, supra, n.2; County of San Diego, et al., v. San Diego NORML, et al., 165 Cal. App. 4th 798, 81 Cal. Rptr. 3d 461, review denied (2008), and cert. denied, 556 U.S. ___, 129 S. Ct. 2380, 173 L. Ed. 2d 1293 (2009).
5 21 U.S.C. §903 (limiting the preemptive scope of the CSA to only those state laws that create a “positive conflict” with federal law).
6 Gonzales v. Raich, 545 U.S. 1 (2005).
7 Raich, 545 U.S. at 19.
8 United States v. Goodwin, 457 U.S. 368, 380 (1982).
9 United States v. Batchelder, 442 U.S. 114, 125 (1979).

Hilary V. Bricken
Attorney at Law
Canna Law Group, a practice group of Harris & Moure, pllc
www.cannabislawseattle.com

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