US cannabis companies to sue federal government to end prohibition

Several companies and major players in the the cannabis industry in the United States are joining forces to sue the federal government over what they consider to be unconstitutional policies that hinder their activities, according to Marijuana Moment which quotes one of the presidents of these companies.

The coalition of multistate operators (MSOs) will apparently be represented by Boies Schiller Flexner LLP, a leading law firm that has been involved in numerous high-profile federal cases.

David Boies, the firm’s chairman, has a long list of clients, including the Department of Justice and former Vice President Al Gore, and has overturned California’s ban on same-sex marriage, among other achievements. This leading law firm’s willingness to take on cases involving the cannabis industry would be a good indicator that it considers the issue worthwhile.

The companies reportedly involved in the discussion include Ascend Wellness Holdings, Curaleaf, TerrAscend, and the American Trade Association of Cannabis and Hemp (ATACH), among others.

2 complaints in question

The goal is to file two complaints with a federal district court «within the next two months.».

One of the lawsuits will challenge the federal ban on interstate cannabis commerce and contest the constitutionality of the Controlled Substances Act (CSA). The plaintiffs will argue, among other things, that previous court rulings regarding the federal government’s authority over interstate commerce—particularly with regard to fungibility—should not apply to cannabis companies operating in highly regulated legal state markets.

The second trial will focus on a code of the Internal Revenue Service (IRS), the U.S. Treasury Department, known as 280E, which prevents the cannabis companies to claim federal tax deductions because, according to the CSA, they would be trafficking in a controlled substance.

The implications of resolving this IRS issue could be retroactive, meaning that cannabis companies that were denied federal tax relief could theoretically amend their previous tax returns and receive deductions dating back several years.

Still a long way to go

For now, the MSOs are reportedly seeking to secure the financial resources needed to take this case to court, in the hope that it will eventually reach the Supreme Court if Congress does not act first to end prohibition.

The lawsuit could be filed in Illinois, a U.S. state where cannabis is legal and where the regulatory framework surrounding cannabis is robust and effective

The timing of this legal challenge, however, is no coincidence. The management of the Senate Resists the Law SAFE Banking Act passed by the House of Representatives 6 times in a row.