Marijuana Laws
Tom Downey, JD, and Sean Jennings, JD
With the recent legalization of hemp/CBD and continuing changes among states, it is easy to be confused about exactly where things stand on the legality of marijuana. In short, we remain in an unnatural position with most states having legalized marijuana in some manner, federal law still criminalizing it entirely, and the legal tension playing out on a daily basis in the business and medical community.
What does it mean that marijuana is federally illegal?
Marijuana is a Schedule 1 narcotic under the Controlled Substances Act of 1970 (CSA). That means the federal government views marijuana as highly addictive and having no medicinal value. As every pharmacist knows, Schedule 1 narcotics, such as methamphetamine, are completely illegal. Even cocaine is a Schedule 2 drug, with extremely limited availability.
Due to its CSA classification, it is a federal crime to grow marijuana, smoke it, sell it, or dump it on a table and draw pretty pictures. Plus, anyone aiding or abetting those activities is committing a federal crime. Increasingly, there is a level of cultural acceptance and interest from the medical and research community that appears out of step with marijuana’s Schedule 1 legal status.
State vs. federal law
Despite these federal prohibitions, individual states started legalizing medical marijuana in the late 1990s and early 2000s, with the first commercial legal medical marijuana structures starting in 2010. Legal adult use of recreational marijuana followed, starting in 2014.
The problem is that under the Supremacy Clause of the U.S. Constitution, federal law trumps state law. Therefore, the federal government wins any conflicts of laws. As such, state recreational marijuana structures and commercial operations remain in an uneasy legal position.
Since 2009, the federal government has followed a policy of nonenforcement, originally termed deprioritization. In short, as long as a person or business is compliant with state marijuana laws, the federal government won’t enforce federal marijuana laws. This is mere policy and not law. A simple analogy may be drawn from speeding violations. It’s an unwritten rule that you can drive up to five miles over the speed limit without getting caught or charged. The speed limit is still the speed limit; but the police are following a policy of nonenforcement within 5 mph.
The federal government is doing the same thing with respect to marijuana. Not selling to minors, not crossing state lines, and not allowing criminal enterprises to engage with the licensed marijuana business are all restrictions under state marijuana laws. If all of the state laws are followed, the federal government is choosing to look the other way.
The federal government’s policy of nonenforcement has spanned across presidential administrations since the early 2000s. One exception under the Trump administration, however, involves immigration.
If someone is in the United States under a visa, and they are working at a state-legal marijuana business, U.S. Immigration and Customs Enforcement may deport them because engaging in federal criminal activity is a violation of visa terms. Aside from that, the federal government is largely staying away, as long as adult customers, medical patients, and marijuana businesses remain compliant with state marijuana laws.
Medical vs. recreational marijuana
While American public opinion continues to trend in favor of legalization, a key area of confusion is the difference between medical and recreational marijuana. The truth is that there isn’t any real difference in the cannabis product, aside from how you get it and what taxes you pay on it.
The earliest concepts around state commercial medical marijuana structures were reflective of legal personal use. Many states decriminalized medical marijuana and allowed individuals to grow and consume up to six plants with a referral from a physician and a permit from the state. The medical marijuana statutes allowed individuals over 18 years to assign their six plants to medical marijuana grow businesses and stores, which would then operate like a marijuana-only pharmacy.
While medical marijuana was taxed at the state and local level like other consumer sales, there was mostly no special or excise tax. Recreational marijuana, in contrast, does not require a physician’s referral or state medical card. A consumer over 21 years can go to any recreational marijuana store and present valid ID, similar to going into a liquor store to buy a six-pack of beer or bottle of wine. Most jurisdictions have special taxes, wholesale and excise, on recreational marijuana.
Although the cannabis product is the same, medical marijuana consumers are typically more regular users and pay less taxes for the product. Recreational marijuana consumers are more often occasional users or vacationers in legal states, who pay a premium compared to the medical market.
Despite the growing number of states now legalizing marijuana, federal law remains a major legal and practical hurdle. Because marijuana remains federally illegal, most commercial banks will not provide financial services to the marijuana industry, making it a mostly cash business. Moreover, medical and scientific research on marijuana’s health benefits and drawbacks is hampered by federal law and funding restrictions. For business and medical reasons alike, pharmacists should closely watch the evolving landscape of marijuana legalization.