9th U.S. Circuit Court Of Appeals Says DOJ Can Not Prosecute Medical Cannabis Businesses That Comply With State Laws.

In a decision which can only be classified as a win for the marijuana industry, the U.S. Court of Appeals for the 9th Circuit in San Francisco (the “Court of Appeals”) ruled Tuesday August 16, 2016, that the U.S Department of Justice (the “DOJ”) must comply with a Congressional rider which prohibits the DOJ from spending money to prosecute cannabis businesses which comply with state medical marijuana laws. United States v. McIntosh, 2016 U.S. App. Lexis 15029. (the Court of Appeals consolidated ten cases on appeal arising out of orders in three districts and two state courts within the 9th Circuit). The Court of Appeals was asked to decide whether criminal defendants may avoid prosecution for various federal marijuana offenses on the basis of a congressional appropriations rider that prohibits the DOJ from spending funds to prevent states’ implementation of their own medical marijuana laws. The rider in questions, Rohrabach-Farr Amendment, was adopted originally by Congress in December of 2014 and has been extended repeatedly.

The rider states:

  • None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, and Wisconsin, to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

In a nutshell, Defendants argued to the Court of Appeals that the DOJ violated the Appropriations Clause of the United States Constitution by spending funds which Congress said it could not. The Court of Appeals ruled that the DOJ is prohibited from spending funds from relevant appropriations acts for the prosecution of individuals who engaged in conduct permitted by the State Medical Marijuana Laws and who fully complied with such laws.

The Court of Appeals further stated that if the DOJ wishes to continue with these prosecutions, Defendants are entitled to evidentiary hearings to determine whether their conduct was completely authorized by state law, by which they mean that Defendants strictly complied with all relevant conditions imposed by state law on the use, distribution, possession, and cultivation of medical marijuana. The Court of Appeals sent all of the cases back to the U.S. District Courts for evidentiary hearings to determine whether each defendant had complied with their respective state laws.

The Court of Appeals further noted that while the lack of funds to prosecute is currently temporary it may become more permanent if Congress continues to include the same rider in future appropriations bills. The other side of that coin as stated by Judge Diarmund O’Scannlain is that Congress could chose to restore funding to the DOJ at any time in the future and the DOJ could continue these prosecutions under Federal law.

While it is entirely possible that Congress could choose to not include the rider in any future appropriations bills and allow funding for DOJ prosecutions, I believe that Congress’ position will continue to reflect the growing national movement relaxing prohibitions against marijuana and medical marijuana. The Court of Appeals decision is a huge step forward in alleviating the fear Federal prosecution which may in turn spur greater investment in the medical marijuana industry.

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