Marijuana is[n’t] legal: The federal/state contradiction

Marijuana is legal in a majority of states for either medical use or adult use.

But … it isn’t.

That’s because marijuana is illegal under the Controlled Substances Act, a federal law. So, what gives?

Well, under the Supremacy Clause of the U.S. Constitution, states are prohibited from making anything legal that is illegal under federal law. This means that the federal government decides.

But … it doesn’t.

That’s because the very same Constitution, in the 10th Amendment, provides for states’ rights to make decisions to create regulatory structures that diverge from federal law. So, the majority of states have pushed forward — regardless — to legalize marijuana.

Round and round we go.

To “clarify” the contradiction here, we can look to the federal executive branch, which has the power to enforce the Controlled Substances Act with criminal penalties. But, in 2009, it issued a directive that federal prosecutors refrain from prosecuting individuals obeying their own state’s marijuana laws.

But … that directive only addressed the medical use of marijuana and did not address the recreational use of marijuana.

Further clarification was needed. So, four years later, in 2013, President Obama’s executive branch issued a directive that federal prosecutors refrain from using federal resources to prosecute if there was a state-compliant way to operate a medical or adult-use marijuana business. This directive didn’t make marijuana legal; it was just an indication that prosecutorial resources would be better exercised elsewhere.

But … five years later, in 2018, the Trump Administration withdrew this directive — without substituting it with any replacement or clarifying directive — putting prosecutorial discretion back into the hands of federal prosecutors, even when there is a state-compliant way to operate.

So, the federal legislative branch stepped in to “clarify.” As part of an omnibus federal spending bill, Congress protected state-legal marijuana businesses by legislating that the executive branch not use federal funds to prosecute individuals who act in compliance with state marijuana laws.

But … since 2014, this has always been — and still is — a temporary measure appended to yearly spending bills. And it only applies to medical marijuana, not to adult-use. And it doesn’t mean that prosecution isn’t ever appropriate. It just means that, for now, federal dollars can’t be used to prosecute for medical marijuana. But it’s still illegal, at least federally.

That leaves one branch left to provide clarity. The federal judicial branch has held that the executive branch cannot prosecute those who are compliant with medical marijuana programs. But no such protection exists for any state adult-use marijuana program.

This legal inconsistency between the states and the federal government results in difficulties on many fronts. While the majority of states have legalized some form of marijuana use, federal banking law prevents banks, payment processors and insurance businesses from associating themselves with marijuana businesses. Traditional federal protections are also denied. Federal intellectual property rights are challenging or unavailable. The same goes for federal bankruptcy protection. Yet, although cannabis is illegal under federal law, Congress still demands, and the federal executive branch collects, the payment of taxes for marijuana businesses. But it does so with a particularly onerous structure simply because it is illegal under federal law.

Now, Congress is looking to address this larger federal and state contradiction. That should clear things up …


Gary Weinstein served as senior vice president, deputy general counsel and chief privacy officer for a national tax preparation company and served as an assistant attorney general in the Antitrust Bureau and Litigation Bureau of the New York State Office of the Attorney General. He presently serves on advisory boards advising cannabis companies.


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