If one thing is true about state cannabis regulators, it is that they aren’t afraid to take matters into their own hands—likely because without federal guidance, they have always had to. This month state-level leadership continues as California and New Jersey file legislation to authorize interstate commerce despite clear constitutional challenges posed by the Dormant Commerce Clause (DCC).
The cannabis industry has been riddled with DCC challenges. The most obvious: The DCC bars state-sanctioned cannabis businesses from selling between states, limiting the cannabis economy to state boundaries. The less obvious: The multiple lawsuits that have diminished the intent of many social equity programs, protecting the right of out-of-staters to enter the market without disadvantages. The DCC has been a salient impediment on cannabis market success for many states, and regulators and industry players are simply fed up.
Federal direction has been painfully absent over the years as rescindment of the Cole memo has created looming questions of federal interest and potential interference in state cannabis markets. As a result, state regulators have had to navigate countless legal challenges without federal guidance. Examples include the drafting of pesticide rules for cannabis growers without the assistance of the Environmental Protection Agency or the U.S. Department of Agriculture, the enforcement and oversight of Delta-8 and other novel cannabinoids outside of licensed programs, and the many barriers to cannabis banking.
Over the past two years, the federal government has started providing subtle nods of recognition that its interest in cannabis may be growing. From the National Institute on Drug Abuse’s latest request for proposals to create a medical cannabis registry to the Drug Enforcement Agency finally ending a decades-old monopoly on cannabis research, one can extrapolate that federal interest in cannabis may be leading to a larger effort like rescheduling and decriminalizing as promised by the current White House.
Federal absence has not only been a disadvantage for cannabis regulators in solving problems that the feds have the authority to handle; it has also been a disadvantage for the federal government. Cannabis regulations across the states are inconsistent at best and conflicting at worst. By not being present in the creation of these programs, the federal government is significantly behind in creating an interstate framework that would support and unify – rather than obstruct – the success of state programs.
As states begin to take individual action sidestepping the DCC, the question becomes not will the federal government authorize interstate commerce based on a recent U.S Court of Appeals ruling, but rather, is the federal government even equipped to draft a federal plan and Commerce Clause jurisprudence for cannabis? As a reminder and cautionary tale, interstate commerce principles were still being established for alcohol sales in 2005 despite federal legality since the ratification of the 21st Amendment in 1933. While cannabis legalization bills have been filed at the federal level, legislation and Commerce Clause clarity are two separate matters.
We are eight years into having legal cannabis markets and have witnessed regulators and the industry overcome countless hurdles through their own tenacity. State progress may be outpacing the federal government’s ability to swiftly authorize the suspension of the default rule in a manner that is distinctly unambiguous. One thing is for certain; costly and burdensome litigation will continue for quite some time.