Business

Three cannabiz court cases to watch

By Alex Halperin
Jan 31, 2022
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New York Public Library

The cannabiz still exists, in large part, in a world of legal gray areas and ambiguities.

But three very different court cases which made news this week do a good job capturing the cannabiz’s singularly bizarre legal situation. Taken together, they show how far the industry has come, and how far it still is from “normal.” 

The first case involves Empyreal Logistics which has asked a federal judge for an emergency order after the FBI and San Bernardino County, Calif. Sheriff’s Department pulled over two of its vehicles in southern California and confiscating $1.1M in cash.
L.A.Times

  • The FBI says the money is tied to federal drug or money laundering crimes but has not provided specifics or charged anyone.
  • “The cash seizures — and another from the same trucking company in Kansas — raise questions” about whether the Biden Justice Department is moving to disrupt state legal weed in California and elsewhere, the L.A. Times says. 
  • In the Kansas case, the vehicle was stopped in the illegal state while traveling between two legal states.

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Activist Celestia Rodriguez filed the second court case in Arizona after she discovered that of the 1,500 applications filed for equity licenses, more than 500 were connected to larger companies. The case could define limits, in one state’s view anyway, of what qualifies as an equity business. 
Fox 10 Phoenix

  • “Rodriguez claims the companies have either bankrolled the $4,000 application fees for clients and made sweetheart deals to get the licenses afterwards, or they are just planning on buying the licenses from the winners,” Fox reports.
  • A bill in the state’s legislature would block equity license holders from selling them for 10 years, and then only to another qualifying individual.

Finally in Maine, the third case, sounds like a crackdown but actually gives the industry more freedom to operate.

The 1st U.S. Circuit Court of Appeals found that two Maine MED growers accused of “blatantly illegitimate activity” can be prosecuted despite federal law — the Rohrbacher-Farr amendment — blocking the prosecution of state-legal MED activity. 
Reuters

The San Francisco-based 9th Circuit Court of Appeals previously ruled on a similar matter, Reuters reports:

The 1st Circuit, however, adopted a broader standard for what prosecutions are not allowed than the 9th Circuit, which in 2016 said medical marijuana businesses could avoid prosecution only when they strictly complied with state medical marijuana laws.

1st U.S. Circuit Judge William Kayatta said the potential for technical noncompliance with a state’s laws was “real enough that no person through any reasonable effort could always assure strict compliance.”

However, the judge said the evidence against the indicted defendants established that they used MED licenses as “facades” for an illegal operation.