Although the U.S. Supreme Court has declined to hear a Denver dispensary's appeal over the tax code's treatment of the marijuana industry, one justice issued a broad statement about the "contradictory and unstable" relationship between state policies legalizing cannabis and the federal government's inconsistent enforcement of its prohibition.
Justice Clarence Thomas on Monday wrote separately to say that federal authorities have sent mixed signals to the 36 states allowing medicinal marijuana and 18 states with retail marijuana, and suggested it might be time to scrap the Court's 16-year-old precedent allowing for crackdowns on pot in places where it is legal.
"A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government’s piecemeal approach," Thomas argued.
"This is one of the first statements, and maybe the first, I have seen from a Supreme Court justice about it," said Erwin Chemerinsky, the dean of Berkeley Law who has written about the conflict between state and federal laws regarding marijuana.
James D. Thorburn, the attorney representing Standing Akimbo medical dispensary in Denver, believed Thomas may have been speaking for more members of the court than just himself, and called the statement a positive development for cannabis advocates.
"This is the best consolation prize we could have possibly gotten," Thorburn told Colorado Politics.
Standing Akimbo challenged Section 280E of the Internal Revenue Code, which prohibits companies "trafficking in controlled substances" from taking business tax deductions. Given marijuana's status as an outlawed substance on the federal level, this prohibition applies to the cannabis industry.
The Internal Revenue Service, in investigating Standing Akimbo's tax compliance, sought product tracking records from Colorado's Marijuana Enforcement Tracking Reporting and Compliance system. The dispensary sought to block the investigation, but the federal appeals court based in Colorado ruled against them.
After Standing Akimbo appealed to the Supreme Court, the Biden administration weighed in firmly against the notion of "state-legal" marijuana.
“States may not countermand Congress’s decision to prohibit trafficking in marijuana. Such activity violates federal law even when it does not independently violate state law (and even when it is affirmatively permitted by state law)," wrote Acting Solicitor General Elizabeth B. Prelogar to the Court in February. The solicitor general's office did not immediately respond to a request for comment on Monday.
Thomas appeared to find it interesting that the federal government has generally left states to experiment with marijuana legalization, but not when it comes to Section 280E.
"In other words, petitioners have found that the Government’s willingness to often look the other way on marijuana is more episodic than coherent," he observed.
In 2005, the Supreme Court decided in Gonzales v. Raich that Congress's authority to regulate interstate commerce also allowed for the federal ban on marijuana to extend locally, even in states where it is legal. But by tolerating the increasing number of states that have bucked federal law and voted to legalize retail marijuana, starting with Colorado and Washington in 2012, the federal government has given the cannabis industry a reasonable impression that they will be treated like any other sector.
"Once comprehensive, the Federal Government’s current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana," he noted. "This contradictory and unstable state of affairs strains basic principles of federalism and conceals traps for the unwary."
Erik Altieri, executive director of NORML, which advocates for the reform of marijuana laws, called on Congress to "get their heads out of the sand" and end the federal prohibition.
"Justice Thomas' comments reflect something that has been obvious to a vast majority of Americans for some time now. With nearly half of all Americans residing in a state where the use of marijuana by adults is completely legal, it is both absurd and problematic that the official policy of our federal government is that all marijuana consumption, cultivation or sale are considered criminal actions," he said.
As of fall 2020, 68% of Americans support the legalization of cannabis, the highest favorable percentage Gallup has measured in its five decades of polling on the question. Last week, Connecticut became the 19th state to allow retail marijuana.
Joe Rogoway, a cannabis attorney based in California, believed the Supreme Court declining to take up Standing Akimbo's tax law appeal might actually indicate the justices are waiting for a different case presenting a different question before they agree to dive into the Controlled Substances Act.
"It's really over an arc of time how these develop," Rogoway said. "I would look out for pieces of [Thomas's] opinion that could very well become recycled through actual published opinions if they grant review for something in the future."