A federal court has dismissed a lawsuit from major marijuana companies that sought to prevent the U.S. government from enforcing cannabis prohibition against their in-state activities.

The U.S. District Court for the District of Massachusetts's Western Division ruled on Monday that despite compelling reasons to reevaluate the current scheduling of cannabis, existing Supreme Court precedents restrict the court's authority to alter federal regulations on controlled substances, Bloomberg Law reported.

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Court’s Decision

Judge Mark G. Mastroianni, who was appointed by President Obama, ruled in favor of the Justice Department’s motion to dismiss the case.

"The relief sought is inconsistent with binding Supreme Court precedent and, therefore, beyond the authority of this court to grant,” he stated.

The judge added that the plaintiffs "do not provide a basis for this court to disregard the broad reading of the Commerce Clause."

Background Of The Case

The lawsuit, Canna Provisions v. Garland, was spearheaded by multi-state operator Verano Holdings Corp. (OTC:VRNOF) along with Massachusetts-based cannabis businesses Canna Provisions and Wiseacre Farm, and Treevit CEO Gyasi Sellers.

They were represented by law firms Boies Schiller and Flexner LLP and Lesser, Newman, Aleo, and Nasser LLP. The plaintiffs contended that federal prohibition of marijuana lacks a rational basis, given the widespread state-level legalization.

Arguments And Implications

At the heart of the case was the argument regarding in-state cannabis activities and their impact on interstate commerce. The Department of Justice (DOJ) argued that state-regulated marijuana industries attract out-of-state tourists, thereby affecting interstate commerce.

"It is rational to conclude that the regulated marijuana industry in Massachusetts fuels a different kind of marijuana-related interstate commerce: marijuana tourism," DOJ stated in an April filing.

The plaintiffs, on the other hand, maintained that the Constitution's Commerce Clause should prevent the DOJ from interfering with state-legal activities regulated within state borders.

Despite acknowledging the plaintiffs' standing to bring the lawsuit, the court ultimately sided with the government, citing the Supreme Court's decision in Gonzales v. Raich, which allows federal regulation of intrastate activities that affect interstate commerce.

Potential For Further Action

While the court dismissed the case, Judge Mastroianni noted that the plaintiffs could seek attention from the Supreme Court or advocate for reclassification or removal of marijuana from the Controlled Substances Act (CSA).

"Plaintiffs assert that marijuana has been miscategorized and, at the motion to dismiss stage, the court accepts as true their assertions about the safety of marijuana and its therapeutic benefits," the court acknowledged.

Broader Context

This ruling comes as the Justice Department is considering rescheduling cannabis from Schedule I to Schedule III of the CSA, a move that DOJ attorneys argue supports the rationality of the current prohibition laws.

Judge Mastroianni emphasized that despite state legalization, marijuana remains a Schedule I substance under federal law, making almost all activities involving marijuana federal crimes.

Industry Reaction

Litigator David Boies, leading the suit, has represented prominent clients like the Justice Department and former Vice President Al Gore.

Reflecting on the decision, lawyer Josh Schiller called it "thoughtful," stating, "on appeal, we will continue to press our case that the federal government lacks any rational basis for banning state-regulated marijuana."

Political Landscape

As the marijuana industry faces legal challenges, the Biden administration has been highlighting its marijuana policies to contrast with those of former President Donald Trump.

The Biden campaign recently launched ads promoting the president's clemency actions, stressing the view that cannabis is "not as dangerous as we once believed."

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