Oregon Weed Compay files lawsuit to export cannabis to other states under trade dormant clause
An Oregon marijuana company has filed a federal lawsuit alleging that the state’s ban on cannabis imports and exports to and from other states violates the United States Constitution.
On Monday, Jefferson Packing House, LLC, an Oregon-licensed marijuana wholesaler, filed a lawsuit against Attorney General Ellen Rosenblum (D), Gov. Kate Brown (D) and the director of the Oregon Liquor and Cannabis Commission.
While the lawsuit challenges state law prohibiting cannabis exports, the plaintiffs’ attorneys sent a letter to the senior officials named as defendants, urging them to join efforts to obtain a ruling that invalidates the policy , and argued that they were in the best economic interests of the state.
The letter states that they acknowledge that marijuana remains prohibited under federal law and that the lawsuit will not reverse that. However, they believe that the state of Oregon needs to be fully focused on supporting its local marijuana business, so Oregon’s legislature should no longer restrict marijuana exports to other states.
details of the lawsuit
The lawsuit, filed in the United States District Court for the District of Oregon, is based on an interpretation of the Dormant Commerce Clause (DCC) of the United States Constitution. The interpretation is intended to promote competition by prohibiting states from separately regulating interstate trade and commerce, leaving that responsibility solely to Congress.
Andrew DeWeese and Kevin Jacoby of the Green Light Law Group wrote on behalf of Jefferson Packing House that under the DCC, for example, an Oregon law restricting the export of grapes (or hazelnuts, semiconductors, etc.) would be invalidated. Therefore, they expect that a federal court would treat marijuana like hazelnuts and invalidate state laws that prevent the export of marijuana, even though it is unlawful under federal law.”
Part of her reliance on a federal court ruling in her favor stems from precedents established in a federal appeals court in August.
In this case, the United States Court of Appeals for the First Circuit concluded that Maine statutes prohibiting nonresidents from operating medical marijuana businesses violated the DCC and were unconstitutional. Following that ruling, legal experts predicted it could have far-reaching implications for the interstate cannabis business.
According to the eight-page appeal for this latest allegation, Oregon’s export ban “not only harms Oregon processors, growers and wholesalers, but also non-residents who physically go to Oregon to buy these products.”
Similar bans on the export and import of cannabis are being introduced in legal states in the United States, primarily to protect states from federal enforcement action. Agencies such as the Department of Justice have previously identified the interstate cannabis trade as a national law enforcement priority.
According to the lawsuit, the ordinance discriminates against interstate commerce by outright prohibiting such transactions without a valid, non-protectionist objective and thus being barred by the dormant commerce clause of the United States Constitution.
According to the report, trying to get the DOJ to maintain its policy of non-enforcement of state-legal cannabis deals (which violate federal law as much as interstate cannabis trade) to induce perceived federal enforcement priorities raises fatal concerns about a separation of powers. This is because only Congress, not the DOJ (an executive branch agency), can allow states to regulate interstate commerce.
The complaint added that the export ban is choking Oregon’s marijuana producers and industry players because they are unable to meet the huge overseas demand for their Oregon-made products. The plaintiffs are asking the court to declare the export ban illegal to remedy the issue and prohibit the state from enforcing and enforcing the pharmacy residency permits.
Oregon is in a better position to capitalize on out-of-state demand
The letter to Brown and other state officials emphasizes that Oregon is in a unique position to benefit from allowing cannabis exports. The letter asserts that the state benefits from a spirit of innovation, the near-perfect confluence of geography, deep cannabis entrepreneurship and culture, climate and smart regulation, which makes it well-placed to become the yardstick by which all others are measured . “
The attorneys asked people, “Will you work with us now as we expand our great state’s legacy in fighting the injustice of federal cannabis prohibition?”
We humbly request that none of you act to defend the Oregon laws that are the subject of our complaint and restrict the export of marijuana in your official capacities. Instead, we ask that you pray with us that the district court will rule that these laws are unconstitutional. Together, our meritorious legal action and support for Oregon will send a powerful message to our policymakers in Washington.
Although it is uncertain whether the state would accept the plaintiffs’ offer, Brown has expressed an interest in allowing interstate commerce in the marijuana industry, signing a measure in 2019 that would allow the governor to do so once federal law permits. As a result of this action, two members of that state’s congressional delegation introduced a bill that would allow similar activity and prevent the Justice Department from interfering in states that have already confirmed agreements to sell cannabis across state lines. However, the proposal did not go forward.
Two years after Brown passed the law at the state level, a coalition of marijuana advocacy groups began rallying the support of the corporate sector to ask the governors of four key West Coast states to seek advice from the Justice Department on interstate marijuana trade. Since then, New Jersey’s governor could now make deals to import and export cannabis with other states that have legalized it, according to a measure introduced by Democratic New Jersey Senate Speaker Nicholas Scutari.
A bill giving California Governor Gavin Newsom (D) the power to allow interstate trade in marijuana was signed by him in September.
There is no legal reason for any other state or Oregon to ban the import or export of marijuana, she argues. Protection of the local cannabis sector is inherently protectionist and thus clearly unconstitutional under the DCC. However, it is uncertain whether the state would accept the plaintiffs’ offer.
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