Justice Clarence Thomas disagreed with the Supreme Court’s denial of certiorari — that’s a refusal to hear — a tax case Monday, and the conservative justice’s statement strongly suggests he believes any federal marijuana ban is unconstitutional.
The case is Standing Akimbo, LLC v. United States, in which the owners of a Colorado marijuana dispensary appealed an unfavorable tax decision that treated them differently from other business owners. The Internal Revenue Code does not allow a tax deduction or credit for expenses incurred by establishments whose business model “consists of trafficking in controlled substances” in violation of federal or state law. Despite marijuana being legal for both medical and recreational use in many states, it remains a controlled substance under federal law. As a result, business that dispense marijuana are denied tax benefits that would be available to other businesses.
Thomas began his statement disagreeing with the Court’s refusal to hear the case by commenting that the legal landscape with regard to marijuana has changed dramatically in the past 16 years. In 2005, the Court held in Gonzales v. Raich that Congress could prohibit the cultivation and use of marijuana — even when done entirely within one state’s borders — to avoid causing a “gaping hole” in Congress’ “closed regulatory system.” Since then, however, many states have legalized both medicinal and recreational cannabis use.
The result is that the federal government now has what Justice Thomas called a “half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana.”
“This contradictory and unstable state of affairs,” Thomas warned, “strains basic principles of federalism and conceals traps for the unwary.”
The justice went on to explain how the federal government has continuously “sent mixed signals on its views” regarding marijuana. On one hand, “federal law still flatly forbids the intrastate possession, cultivation, or distribution of marijuana,” but on the other, in the Department of Justice has issued multiple memorandums outlining its policy against intruding on state laws or state prosecutions on the matter. Furthermore, in 2009, Congress specifically allowed Washington D.C. to decriminalize medical marijuana; in 2015, Congress specifically prohibited the DOJ from spending any money that would inhibit states from implementing their own medical marijuana laws.
The federal government’s seemingly softened attitude toward marijuana has, the justice explained, caused predictable misunderstandings. The Colorado dispensary owner petitioners understandably thought “their intrastate marijuana operations will be treated like any other enterprise that is legal under state law,” explained the justice.
However, under the relevant portion of the Internal Revenue Code, that’s not quite how it works. “Under this rule,” Thomas continued, “a business that is still in the red after it pays its workers and keeps the lights on might nonetheless owe substantial federal income tax.”
The justice then went a step farther, commenting that the “disjuncture between the Government’s recent laissez-faire policies on marijuana and the actual operation of specific laws is not limited to the tax context.” Thomas went on to explain that many marijuana-related businesses operate entirely in cash in an effort to circumvent federal laws that would prohibit banks from doing business with them. That reality then gives rise to even more unfair results.
Because cash businesses are prone to robberies and burglaries, those who operate them often hire armed guards. However, those owners and guards might find themselves on the wrong side of a prosecution for federal drug trafficking or civil lawsuit for Racketeer Influenced and Corrupt Organizations Act.
All of these realities, Justice Thomas argues, threaten the very core of federalism.
“If the Government is now content to allow States to act ‘as laboratories,'” he cautioned, “then it might no longer have authority to intrude on ‘[t]he States’ core police powers . . . to define criminal law and to protect the health, safety, and welfare of their citizens.'”
Legal experts were quick to take note of Thomas’ statement as a harbinger of the imminent demise of federal authority to regulate marijuana.
Slate’s Mark Joseph Stern commented that the federal government’s policy of letting “states run robust marijuana markets” has the effect of “undermin[ing] its constitutional authority to maintain its putative ban [on marijuana].”
Thomas’ basic point is that when SCOTUS upheld the federal ban on marijuana in Raich, the federal government actually prohibited weed. Now the government lets states run robust marijuana markets, which undermines its constitutional authority to maintain its putative ban.
— Mark Joseph Stern (@mjs_DC) June 28, 2021
Law professor Elizabeth Joh also noticed the justice’s suggestion that federal marijuana laws potentially violate the government’s constitutional authority.
Justice Thomas has THOUGHTS on federal marijuana laws—like maybe they’re unconstitutional 😳 pic.twitter.com/Mo7w8yQCnt
— Elizabeth Joh (@elizabeth_joh) June 28, 2021
Joseph Bondy, a defense lawyer for Lev Parnas and a cannabis law expert sitting on the board of the National Organization for the Reform of Marijuana Laws (NORML), said in a phone interview with Law&Crime that Thomas’ take was “completely accurate.” Bondy predicted that given the growing trend of state-level cannabis legalization, the argument that federal prosecution for cannabis crimes is unfair will continue and is likely to resonate.
“It’s just no longer tenable,” explained Bondy, for the federal government to keep marijuana illegal while simultaneously allowing the multi-billion dollar cannabis industry to exist.
Bondy pointed out that while Thomas’ statement on the Court’s denial of certiorari might be something of a warning signal, it does not rise to the legal significance of even a dissenting opinion. In other words, it’s so low on the legal totem pole that it will have likely have no actual impact. Still, he remarked, such a statement coming from Clarence Thomas “sends a message that will perhaps soften the views of some of the people in Congress,” as well as “some of our Republican senators.”
Under the so-called “Rule of Four,” not even the requisite number of four justices were ready to use the Standing Akimbo case as a vehicle to invalidate federal marijuana laws. Regardless, the Court will almost certainly have other opportunities to do so in cases to come. With Justice Thomas as a potential ally in a fight against federal authority to regulate cannabis, other challenges are sure to arise in the near future — potentially citing Thomas’s statement as proof their case should proceed.
[image via Chip Somodevilla/Getty Images]
Follow Law&Crime:
