While marijuana business is flourishing in Michigan and other states, that result is not due to action at the federal level to legalize, permit, or even, refrain from criminalization those activities. MICA Members need to understand and adhere insofar as possible to both state and federal law.
FEDERALISM AND POLICE POWER
“Federalism” under the Constitution of the United States is our adopted form of government where some powers are reserved to the federal government, some to the authority of the states, and some powers are shared either expressly or through judicial interpretation. “Police power” refers to the authority of every state to enact laws to protect the safety, health and welfare of its citizens and guests. Police power is among the powers reserved to the states by the Tenth Amendment to the United States Constitution. The core exercise of police power includes criminalization of actions of persons who find themselves within the geographic boundaries of the particular state.
The federal government has regulated marijuana since 1937. The federal Controlled Substances Act of 1970 (“CSA”) effectively criminalized recreational and medical use of cannabis. In the case of United States v Oakland Cannabis Buyers, the Supreme Court upheld those federally-established prohibitions, affirming the right of the federal government to regulate and criminalize cannabis possession or use. Under our federalist form of government, accordingly, persons in Michigan are subject to the laws, regulations and authority of both the federal and state governments with respect to marijuana.
Under the federal CSA, marijuana is classified as a Schedule 1 substance, targeted for the most serious penalties in the event of an enforcement action. Marijuana use or sale in Michigan are subject to the same federal restrictions as other “Schedule 1” substances. Accordingly, even with the passage of Proposition 1 and the subsequent passage of the Michigan Regulation and Taxation of Marihuana Act and the Medical Marihuana Facilities Licensing Act, those and other activities are illegal under federal law. Further, federal law does not distinguish between medical or recreational use, possession or sale. Federal first offense for possession of up to 50 kilograms of marijuana or 1 to 49 marijuana plants maxes out at 5 years in prison and a fine of up to $250,000, and penalties double for a second offense.
In his January 4, 2018 “Memo on Marijuana Enforcement, then-United States Attorney Jeff Sessions announced “a return to the rule of law … [and rejected] the previous issuance of guidance” by the Obama administration that had shielded legalized marijuana use and sales from rigorous federal enforcement of the federal prohibition. While current Attorney General Barr has spoken in support of new federal law that would protect state-legal marijuana programs, no such provision has been enacted, although several proposals have been introduced.
Michigan’s two current United States Attorneys, who are charged with application and enforcement of federal law in Michigan, issued a joint statement stating in part:
“Our offices have never focused on the prosecution of marijuana users or low-level offenders, unless aggravating factors are present. That will not change. Nevertheless, crimes involving marijuana can pose serious risks and harm to a community. The seriousness of the offense and impact on a community includes a broad range of related activities and concerns for federal law enforcement.”
Accordingly, current federal enforcement policy leaves great discretion in the hands of federal prosecutors, Drug Enforcement Agency officials, and others.
Against this conflicting background, the Obama-era Department of Justice Guidelines issued in August of 2013, although since formally rescinded, appear to be a reasonably consistently followed identification of “hot button” enforcement matters at the federal level. These guidelines highlight for the focus of enforcement of federal law the following situations or goals.
- Prevention of distribution of marijuana to minors;
- Prevention of revenue from the sale of marijuana from going to criminal enterprises;
- Prevention of the diversion of marijuana from marijuana-legal states to other states (i.e.: across state borders, in interstate commerce);
- Preventing state-authorized marijuana activity from being used as a cover or a pretext to traffic other illegal drugs or other illegal activity;
- Preventing violence or the use of firearms in the growing and distribution of marijuana;
- Preventing intoxicated driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environment dangers posed by marijuana production on public lands;
- Preventing marijuana possession or use on federal property.
And don’t forget – in addition to compliance with rules of the Marijuana Regulatory Agency, local ordinances, and non-cannabis laws and regulations (environmental, employment, etc.) might trip up an unwary cannabis business. We’ll address those in future blogs, as a service of the Michigan Cannabis Industry Association.
Takeaway: While legal under Michigan law, cannabis-related business activities expressly permitted under state law remain at some risk of federal enforcement. Avoiding the identified “hot button” practices is essential to cannabis businesses and all participating investors and affiliates.
Fraser Trebilcock Shareholder Dave Houston has practiced commercial, administrative and regulatory law for 40 years, and is a founding member of the Firm’s Cannabis Practice Group. You can reach him at 517.377.0855 or firstname.lastname@example.org.