SPRINGFIELD – Plaintiffs growing, selling and delivering legal marijuana in Massachusetts now have two court decisions against them, but aren’t giving up.
They seek to overturn a federal law they say strangles their business. They were turned back last week by the United States Court of Appeals for the First Circuit.
But plaintiffs say their fight against the Richard Nixon-era Controlled Substances Act of 1970 is not over.
“It is fair to assume that we shall seek Supreme Court review,” wrote one of their attorneys, Jonathan D. Schiller of the firm Boies Schiller Flexner.
The plaintiffs include Canna Provisions, with stores in Holyoke and Lee; Wiseacre Farms, which grows cannabis in West Stockbridge; Gyasi Sellers, of Springfield, which delivers cannabis; and Verano Holdings Inc. based in Chicago. That company owns Zen Leaf Enfield, at 98 Elm St., in Enfield, Connecticut.
The plaintiffs say the 1970 law is an overreach and prevents them from making use of banking services and bankruptcy protection available to most businesses.
The U.S. Supreme Court receives 7,000 to 8,000 petitions each term, but hears only about 80 cases.
The Boies in the firm’s name is that of David Boies, who represented former U.S. Vice President Al Gore during the recount controversy against President George W. Bush in the 2000 presidential election.
Boies argued in person when the case came before U.S. District Judge Mark G. Mastroianni in Springfield a year ago. The judge ruled in favor of the U.S. Department of Justice and upheld the Controlled Substances Act.
The companies appealed to the First Circuit and a three-judge panel ruled Tuesday, once again in favor of the government.
The plaintiffs declined further comment.
They sued in 2023, saying that with states legalizing cannabis for recreational use, the 1970 federal law exceeds Congressional power.
Making their argument, the companies reached back into history showing that marijuana predates the U.S. Constitution.
“Each of the thirteen original colonies enacted” laws concerning marijuana — “then known simply as ‘hemp’” — some of which “encouraged (or even required) colonists to grow marijuana,” the suit read.
Even the Magna Carta of 1215 created rights concerning hemp cultivation and sometimes even “made the cultivation of hemp compulsory.”
But the appeals judges were unmoved, saying that if left unregulated, the trade in marijuana within states would impact interstate commerce. And Congress has the right to regulate interstate commerce.
As a practical matter, federal law makes it harder for marijuana companies to lease farm land for fear of losing federal agricultural supports or to do banking or borrow money.
The Massachusetts marijuana industry does $1 billion a year in sales, according to data kept by the Cannabis Control Commission.
Commission data says marijuana retails for $125 an ounce these days, down from $416 in 2020.
Ryan Dominguez, executive director of the Massachusetts Cannabis Coalition trade association, said 30 Massachusetts cannabis businesses closed in the last year.
Regulation is expensive, he said. And every neighboring state except New Hampshire has legalized recreational marijuana. Many of those states have tailored their laws – such as limits on how much customers can buy in one transaction – to compete with Massachusetts.
The federal law means none of them can take federal tax deductions, he said. And if they want to go out of business, they can’t claim bankruptcy protection.
The bankruptcy issue is something the lawsuit could fix if it reaches the Supreme Court, Dominguez said.
“A lot of these people would have to declare personal bankruptcy,” he said.
And that means they would lose personal assets in addition to the business.
Although it’s a $1 billion-a-year industry, 30 Massachusetts cannabis businesses have closed in the last year, according to one industry trade group. Read More
