A marijuana company in Oregon has brought a federal lawsuit to challenge the constitutionality of the laws that prohibit interstate cannabis trade.
After filing an initial suit in 2022—and later withdrawing it amid expectations of unspecified “big things” coming—the cannabis wholesaler Jefferson Packing House (JPH) filed a revised complaint on Wednesday with the U.S. District Court for the District of Oregon.
The new suit, which is more extensive than the previous one, makes further arguments on the supposed illegality state laws prohibiting marijuana. The following are some examples of how to get started: Exporting hemp products between states is prohibited by the federal government.
The Dormant Commerce Clause of the U.S. Constitution is at issue, which prevents the states from imposing interstate trade restrictions in order to maintain competitiveness on the free market.
The plaintiffs claim that, while marijuana is still illegal at the federal level, Oregon cannot impose trade restrictions with other states because the DCC prohibits it.
JPH is harmed by Oregon law because the cost of operating the business increases and it can’t take advantage of economies scale.
JPH’s complaint claims that the ban on marijuana and hemp exports puts it “at an unfair competitive disadvantage” in the marketplace, as the company cannot source products from other states and is unable to ship outside Oregon.
It says that state laws “discriminate against interstate trade by blatantly prohibiting this commerce without any legitimate non-protectionist purposes, and are therefore prohibited by Dormant Commerce Clause” of the U.S. Constitution. There is no legal basis for Oregon to ban the export or import of hemp or marijuana.
The DOJ is an executive agency, and therefore cannot be authorized to enforce interstate marijuana commerce. Only Congress has the authority to do so.
JPH has therefore asked the court to declare that state laws prohibiting commerce between states are unconstitutional. They also want the state barred from enforcing these laws and ordered to pay all legal costs associated with the case.
Attorney Vince Sliwoski, from the law firm Harris Sliwoski, wrote in a blog about the lawsuit that if plaintiffs won, Oregon would be entitled to appeal and would likely do so. It’s also possible that the Ninth Circuit will take the case. In the end, it would come down to the U.S. Supreme Court. However, only a small number of federal cases make it that far.
It is not the first time JPH has tried to change the Oregon law to gain access to interstate trade, which had been technically legalized by a former Governor’s bill. Kate Brown (D), in 2019. This law states, however, allowing imports and/or exports of marijuana across state borders is dependent on changes in federal policy.
Lawyers from the state had previously requested that the case be dismissed, claiming JPH didn’t have the right to sue. The state argued in a court motion that the “alleged damages” of the company would not be adequately addressed by any relief the company seeks, as federal law bans the exportation of cannabis. In addition, they claimed that DCC did not apply to the case as it is described.
In its filing, the state said: “This doctrine prohibits States from treating intrastate and international commerce differently.” There is no need to differentiate between intrastate and interstate trade.
A reply last March from Jefferson, however, contended that the federal Controlled Substances Act (CSA) “did not ‘eliminate’ commerce in marijuana any more than a criminal statute ‘eliminates’ the act or conduct it forbids.”
Uncertainty remains as to what may have prompted the company’s decision to abandon its previous legal action. Federal rescheduling of marijuana—as is currently being contemplated by the Trump administration—would conceivably allow some cross-border cannabis trade, at least of any medications approved by the Food and Drug Administration (FDA), but it’s unlikely a Schedule III designation in itself would allow state-licensed cannabis businesses to broadly engage in interstate commerce.
—
MEDCAN24 tracks hundreds of marijuana, psychedelics, and drug policy legislation in state legislatures this year. Patreon subscribers who donate at least $25/month have access to the interactive maps and charts as well as our hearing calendar.
Find out more about our marijuana law tracker. To gain access, become a Patreon supporter.
—
Oregon, California and Washington State each have enacted legislation related to interstate marijuana commerce over the past few years.
In 2022, the federal court of appeals ruled Maine’s law that prohibited non-residents to own medical marijuana businesses violated the DCC. Some experts think the same reasoning that invalidates the residence restrictions is also used to justify state-level prohibitions of marijuana exports and imports.
According to the reasoning, excluding imports and exported of medical cannabis from states that consented could be considered as equally protectionist and inconstitutional.
In Oregon, the Governor and other officials of state are also asking an appeals court in federal jurisdiction to overturn a decision by a judge blocking voter-approved legislation requiring licensed marijuana businesses enter into agreements for peace with their workers as well as a mandate that employers stay neutral when it comes to unionization discussions.
Please read below the Oregon Cannabis Interstate Commerce Legal Complaint.
Mike Latimer provided the photo.
MEDCAN24 could not exist without readers’ support. Please consider making a Patreon monthly pledge if you depend on our cannabis journalism for information.
