Using marijuana for medical purposes is legal in more 33 states. California paved the way, becoming the first state to legalize medical marijuana in 1996.
On a federal level, all marijuana remains illegal. The federal government classifies marijuana, along with heroin and cocaine, as a Schedule I drug with a high potential for abuse and little to no medical benefit.
As a result of the conflict between federal and state law, residents in some states can find themselves using marijuana for medical purposes in compliance with state law, while simultaneously violating federal law. This article discusses some of the complications that arise when state and federal medical marijuana laws conflict.
The Supremacy Clause of the United States Constitution (Article VI, Clause 2) establishes that federal law controls when state law and federal law conflict. The Constitution itself, however, provides for an exception when it comes to the exercise of police powers. The Tenth Amendment of the United States Constitution generally delegates police powers to the states.
In practical terms, this means that states cannot prevent federal prosecutions of their citizens who are using medical marijuana, but by making such use noncriminal under their own laws, they can eliminate state prosecutions of those citizens under state law.
Federal prosecutions of individuals possessing marijuana are extremely rare. The federal government has limited resources to investigate and prosecute federal drug laws, and low-level marijuana offenses are at the bottom of the list of priorities.
On the other hand, businesses that sell medical marijuana, called dispensaries, might face criminal investigation and prosecution, depending on which way the political winds blow.
In 2013, the Department of Justice (DOJ), under President Obama’s administration, formally announced that it would not interfere with marijuana operations that strictly complied with state regulations. Federal law enforcement would instead narrowly focus on targeting:
In 2018, under President Trump’s administration, the DOJ abruptly terminated this policy and announced that federal prosecutors can pursue criminal cases whenever state and federal marijuana laws collide.
So far, the policy reversal has largely been symbolic. Individual federal prosecutors have the discretion to pursue prosecutions that federal agents bring to them, and they are likely to choose cases that are likely to result in convictions in their districts. Federal prosecutions targeting the state-legal marijuana industry require a lot of resources, with no guarantee of success.
Law enforcement officers make the vast majority of arrests for marijuana offenses under state, not federal law. In 2018, police officers in the United States made more arrests for marijuana offenses, mostly possession, than for any other drug, according to FBI data from 2018.
Legal marijuana is big business. In states where residents have access to legal marijuana, the markets are grossing billions of dollars, despite federal prohibition.
The conflict between federal and state marijuana laws has caused problems beyond uncertainty about criminal liability on the state-legal marijuana industry. Most widespread problems relate to commerce and capital—two areas in which the federal government holds full sway.
Banks have been generally unwilling to do business with companies that sell marijuana, out of concern that taking deposits from marijuana businesses could violate federal anti-money laundering laws.
Without access to banking services, many companies in the marijuana industry are cash-only businesses that are vulnerable to theft.
Federal law strictly prohibits marijuana from crossing state lines, including among states where the sale of marijuana is legal for medical purposes.
The federal restriction on interstate commerce has caused imbalance in the markets. For example, hundreds of pounds of marijuana rots in Oregon because the state cannot export it across state lines, even to neighboring Nevada, where use of marijuana for medical purposes is legal, but where marijuana is much more difficult to grow.
The Federal tax code (26 U.S. Code § 280E) still classifies marijuana farmers, dispensary owners and others in the marijuana industry as drug traffickers. Yet marijuana businesses are still required to pay federal taxes.
Consequently, marijuana businesses can’t take tax deductions like other business. For example, payroll and operating expense deductions are not available to them.
Marijuana businesses end up with huge federal tax bills that they often have to pay in cash, because they lack access to banking services (see above).
Scientists at universities and private labs who receive federal money must abide by federal marijuana laws and regulations, regardless of state marijuana laws. Marijuana’s status as a Schedule I substance under federal law severely limits access to the plant. As a result, researchers know little about:
If you have questions about state or federal marijuana laws, talk to an experienced lawyer. Many lawyers specialize in marijuana-related business law and criminal law.
If you have been charged with a federal crime for marijuana-related activities, choose a lawyer with experience practicing in federal court.