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Companies Sue Federal Government, Saying Cannabis Prohibition Isn’t Premised on Rationality

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A recently filed lawsuit argues that the ongoing prohibition of marijuana has no rational basis. The lawyers representing a group of cannabis companies have based their argument on the federal government’s current approach on the matter.

They argue that legislators and the executive branch have deserted their mission to eliminate illegal interstate commerce of marijuana, which was enforced with the establishment of the Controlled Substances Act. The lawyers note that with more states legalizing and regulating recreational and/or medical marijuana and offering consumers safe and local access to the drug, they are actively decreasing illegal interstate commerce as more individuals now prefer buying state-regulated cannabis over illicit cannabis.

This comes after the government dismissed a marijuana companies’ suit filed in January. At the center of that lawsuit is a 2005 decision by the Supreme Court on Gonzales v. Raich. In their ruling, the justices asserted that marijuana’s federal prohibition pre-empted legalization at the state level because of Congress’ mission of preventing illicit interstate commerce of cannabis.

Plaintiffs maintain that the changes that have occurred since then, in the federal government’s tolerance of commercial marijuana activity in legal states as well as at the state level, eliminate the basis for insisting that state-regulated intrastate cannabis commerce must be banned to serve Congress’ objective. Currently, the medical use of marijuana is legal in 38 states while the drug’s recreational use is legal in 24 states and 3 territories. Additionally, 7 other states have decriminalized the use of this drug.

The businesses behind this suit claim that maintaining cannabis prohibition in state markets was unconstitutional and gave way to public safety risks while also preventing licensed operators from accessing necessary tax deductions and financial services that were available to other industries.

Most state-licensed cannabis businesses majorly use cash as they cannot access banking services. Additionally, Section 280E of the IRS code prevents these businesses from claiming federal tax deductions on their taxes.

The case is being led by Verano Holdings Corporation (CSE: VRNO) (OTCQX: VRNOF), a multistate operator; Wiseacre Farm and Canna-Provisions, marijuana businesses based in Massachusetts; and Treevit, a cannabis courier in Western Massachusetts. These companies are being represented by law firms Lesser, Newman, Aleo and Nasser LLP and Boies Schiller & Flexner LLP.

This latest filing was submitted by David Boies, an expert litigator whose previous clients include former vice president Al Gore, the Department of Justice and plaintiffs in the case that led to invalidation of the same-sex marriage ban in the state of California.

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