According to the Supreme Court, an important virtue of our federalist system of
government is that “a single courageous State may, if its citizens choose, serve as a laboratory;
and try novel social and economic experiments without risk to the rest of the country.”
Justice Sandra Day O’Connor
Starting a business in an industry that is still illegal under federal law requires someone daring enough to assume risks, but humble enough to avoid undue attention from the federal government. To avoid attracting the attention of the feds, your organization should keep a low profile, and make sure that everything you do complies with state law. Compliance with state law will not help you in if you end up in federal court, but it will likely help to prevent you from coming to the attention of the feds in the first place. The best way to start is to hire an attorney who specializes in marijuana regulations and enroll in a class on how to grow high quality medical marijuana for medicinal purposes. It is important to understand the conflict between the federal and state laws regarding marijuana, before determining if this type of business is right for you.
In the U.S., federal preemption is the invalidation of a state law that conflicts with Federal law. According to the Supremacy Clause (Article VI, clause 2) of the U.S. Constitution:
This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.
Several states with legal medical marijuana received letters from their respective United States Attorney’s offices explaining that marijuana is a Schedule I substance and that the federal government considers growing, distribution, or possession of marijuana to be a federal crime regardless of state laws. On Aug. 29, 2013 the Department of Justice sent a memo stating that the federal government would rely on state and local law enforcement to address marijuana activity through enforcement of their own laws. In the states where medical marijuana is legal, state and local law enforcement will not likely cooperate with the federal government, and federal officials do not have enough manpower to enforce the ban without help from the states.
During the Bush administration, dispensaries continued to be raided under federal law. After President Barack Obama took office in March, 2009, the U.S. Department of Justice announced it would no longer conduct raids on medical marijuana dispensaries, as long as the dispensaries were abiding by their own state laws. In 2013, the Obama administration filed a guidance asking prosecutors and regulators to avoid prosecuting individual marijuana users and businesses in states where marijuana is legal. The guidance maintained exceptions that allow prosecutors to crack down on instances in which legal marijuana is sold to minors, is grown on public land, falls into the hands of drug cartels, or spreads to states where the drug remains illegal. The guidance does not grant legal immunity, but it tells prosecutors and regulators to prioritize other issues.
The Obama administration cannot promise anyone immunity if people choose to use or sell marijuana, as long as marijuana remains illegal under federal law. Until this outdated draconian law is overturned, people risk losing their jobs, apartments, even custody of children if they are found using a drug that is legal in their state, even if they have a prescription from their doctor for their medicine. There is risk involved in selling medical marijuana and risk involved in using it, but this is going to change as more and more states legalize medical marijuana.
If you have been wondering whether Colorado and Washington can make marijuana legalization stick in the face of federal law to the contrary, the Congressional Research Service asserted that states cannot be forced to comply with the federal prohibition of marijuana. Even though the federal government has a right to ban marijuana, the Tenth Amendment allows states to opt out of participating in the law or assisting in enforcement in any way, making it impossible for federal officials to enforce the ban. If you are an entrepreneur and are not afraid to take a risk, growing medical marijuana would not only provide you with substantial income, but would also help many very sick people. The more people who stand up to the federal government on this issue, the faster the federal government will change it laws.
In State Legislation of Recreational Marijuana Selected Legal Issues, authors Todd Garvey and Brian T. Yeh point out that the federal government is limited in its ability to directly influence state policy by the Tenth Amendment, which prevents the federal government from directing states to enact specific legislation, or requiring state officials to enforce federal law. As such, the fact that the federal government has criminalized conduct does not mean that the state, in turn, must also criminalize or prosecute that same conduct. Court decisions have been clear on this point, add Garvey and Yeh, emphasizing that “[u]nder both Tenth Amendment and preemption principles, federal and state courts have previously held that a state’s decision to simply permit what the federal government prohibits does not create a ‘positive conflict’ with federal law.”1
Voters in Colorado and Washington have not ended America’s experience with marijuana prohibition, but they have deprived the federal government of most of its enforcement mechanisms, and this is an excellent first step. The more states that join these two progressive states, the sooner the federal ban will be overturned. On May 30, 2014, the House voted to block the federal government from enforcing the marijuana ban in states where medical marijuana has been approved. The plan passed 219-189, with 49 Republicans teaming up with 170 Democrats to approve the measure. Almost all of the states that have legalized medical marijuana have set up patient registries to keep track of medical marijuana users. Eleven states currently allow marijuana dispensaries. The other states require that you grow your own marijuana for medical use, and a limited amount is allowed.
There is no doubt in my mind that medical marijuana will someday be legal in every state. Recreational marijuana, however, is another story. At the moment, the federal government is not cooperating with Colorado and Washington, the only two states that have legalized marijuana for adults for recreational use and has threatened to cut off their water supply so that they can’t grow marijuana.
The cost to date of the federal government’s war on medical cannabis is nearly half a billion dollars! The Obama Administration, in just four and a half years, has spent more than $289 million, outspending the Bush Administration by $100 million. In 2012 alone, the DEA used 4% of its budget on medical cannabis cases. According to Former U.S. Surgeon General Joycelyn Elders, M.D., “The evidence is overwhelming that marijuana can relieve certain types of pain, nausea, vomiting and other symptoms caused by illnesses like multiple sclerosis, cancer and AIDS — or by the harsh drugs sometimes used to treat them and it can do so with remarkable safety. Indeed, marijuana is less toxic than many of the drugs that physicians prescribe every day.”2
Eventually the government will figure out that they are wasting too much money on a war they cannot win. When the government decided to prohibit alcohol consumption many years ago (for valid reasons since alcohol is associated with many health problems), it did not work. Instead, it created a black market for bootlegging, which helped lead to the establishment of American organized crime, which persisted long after the repeal of Prohibition.
It is important to get marijuana off the streets and regulate it. That is the only way to make sure that children cannot buy it. According to a recent Gallup poll, a clear majority of Americans (58%) say marijuana should be legalized for medical and recreational use.3 As more and more people become educated about the numerous medicinal uses for marijuana, that percentage will skyrocket.
California was the first state to legalize medical marijuana when voters passed Proposition 215 in 1996. Since then, the medical cannabis industry has flourished, generating upwards of $100 million in annual tax revenue. California, where 65% of residents support legalization for recreational use, plans to legalize the drug in 2016 under the leadership of Lt. Governor Gavin Newsome. Eventually, lawmakers will realize that marijuana is not a dangerous drug and it has a great deal of medicinal value. Federal marijuana laws will eventually change to reflect public opinion and scientific consensus, but I can’t tell you how long it will take, or how much money the government will waste in the process.
Footnotes
1Tuccille, J.D. (April 16, 2013). States Can Legalize Marijuana (Though Federal Laws Stand) Says Congressional Research Service. (retrieved from http://reason.com/blog/2013/04/16/states-can-legalize-marijuana-though-fed)
2What’s the Cost? The Federal War on Patients (June 2013). (Retrieved from report on www.PeaceforPatients.Org)
3Swift, Art. (October 22, 2013). For First Time, Americans Favor Legalizing Marijuana. (Retrieved from www.gallup.com/poll/165539/first-time-americans-favor-legalizing-marijuana.aspx)