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The U.S. Department of Justice has revealed that it will ask a federal court to dismiss a lawsuit seeking to block the federal government from enforcing cannabis prohibition in state-level cannabis markets. Several industry stakeholders and cannabis businesses teamed up in May 2022 to sue the federal government over what they said were unconstitutional policies harming their operations. The group was represented by two leading law firms, including Boies Schiller Flexner LLP, which has represented clients such as former Vice President Al Gore and the Justice Department.
According to the lawsuit, enforcing cannabis prohibition in state markets is unconstitutional and creates a public risk while preventing licensed cannabis businesses from accessing critical financial services despite paying taxes. The suit was filed by Wiseacre Farm and Canna Provisions from Massachusetts, Treevit CEO Gyasi Sellers, along with multistate marijuana operator Verano Holdings Corp. (CSE: VRNO) OTCQX: VRNOF) in the U.S. District Court for the District of Massachusetts, Western Division.
However, in a document filed earlier this week with the U.S. District Court, the Justice Department noted that Attorney General Merrick Garland will file a “motion to dismiss and supporting memorandum” on the Tuesday deadline. That news comes only one month after the plaintiffs and the DOJ jointly agreed to request a deadline extension for initial brief filing. Both parties submitted a joint filing asking the court to extend the deadline by 28 days and push it to Jan. 26, 2024.
If the federal government does file a motion to dismiss, the plaintiffs will have until March 15, 2024, to submit an opposition response and up to April 5, 2024, to submit any additional replies. The DOJ is also asking for permission to submit a memorandum exceeding the 20-page limit as it will present arguments on “multiple issues of constitutional law.”
According to Ascend Wellness Holdings founder Abner Kurtin, the lawsuit is an “industry-wide effort” seeking to block the federal government from impeding intrastate cannabis trade. The suit argues that interstate cannabis trade prohibitions are “unjustified vestiges’” of long-abandoned prohibitionist policies at the state level.
With dozens of states legalizing medical and recreational cannabis over the past two decades, the suit alleges that interstate commerce prohibitions by the federal government are an “unjustified intrusion of federal power” that harms the cannabis sector and lacks any national purpose.”
The plaintiffs are also challenging tax provision IRC 280E, which prevents cannabis businesses from making tax deductions. American Trade Association of Cannabis and Hemp president Michael Bronstein said he believes that tax provisions, as well as the Controlled Substances Act, are being “misapplied to legal cannabis businesses.”
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