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The Catch-22s of Cannabis Legalization

Maren Schroeder, MBA, RP®, MnCP

President, Sensible Minnesota

October 12, 2017

NFPA Annual Convention, New Orleans, Louisiana

Maren Joyce Schroeder, RP®, MnCP

Maren Schroeder, MBA, RP®, MnCP is a PACE Registered and Minnesota Certified paralegal and Qualified Rule114 Neutral for Borgos Law, PLLC working in the areas of family law, criminal defense, debtor relief, andmedical cannabis patient rights. She has a B.S. in Paralegal Studies and an M.B.A. in Legal Administration.Maren is currently the Director of Marketing and NFPA Secondary for the Minnesota Paralegal Association,and previously served as MPA’s Director of Professional Development (2016), Director of Greater Minnesota(2013-2014), Regulation Committee Chair (2014-2015), and Rochester Chapter Director (2012), and NFPARegulation Review Coordinator (2016-2017). Additionally, Maren served on the MSBA’s Task Force onAlternative Legal Services Models which made recommendations on expanding legal services for underservedpopulations. Also active in the community, Maren chairs her city’s Planning & Zoning Commission, is avolunteer crisis advocate for victims of sexual assault, and is a volunteer family and school mediator.

Maren began cannabis-related advocacy in the mid-2000’s when she began researching and writing on thetopic of medical cannabis, inspired by her mother’s Multiple Sclerosis diagnosis. In 2014, she began her formaladvocacy working with the Minnesota Chapter of the National Organization to Reform Marijuana Laws, whereshe was elected to the Board of Directors. In early 2015, Maren broke away from MN NORML and co-foundedSensible Minnesota where she previously held the positions of Treasurer (2015-2016) and Vice President (2016-2017). She currently serves as President, where she manages strategic oversight and is a spokesperson for theorganization. In 2016, she successfully petitioned for the addition of Post-Traumatic Stress Disorder toMinnesota’s Medical Cannabis program, and in 2017, worked with a team to petition the addition of Dementia,Parkinson’s Disease, Liver Disease, and Autism. Additionally, she works to build coalitions throughoutMinnesota and the national cannabis industry, and has done interviews with journalists and written forpublications both locally and nationally on Minnesota’s medical cannabis law and introduced adult-uselegislation. Through Sensible Minnesota, Maren works with national organizations such as Marijuana PolicyProject and Students for Sensible Drug Policy. As an authority on the topic, Maren enjoys speaking on medicalcannabis, cannabis law, and harm reduction to both professional and community groups.

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Roadmap!Where we’re going

How we got to where we are.

International “hand cuffs”

Constitutional provisions

Federal laws and policy

State level policy status

What the courts say

Litigation happening now

Issue ObjectivesWhat to think about during and after

Patient and personal possession

Legality of industrial hemp products, including cannabidiol (CBD)

Cultivation and distribution

Banking and financial issues

Civil asset forfeiture applicability

Conflicts of law

Hurdles for the industry

Prohibition HistoryAlcohol Prohibition

Woman’s Christian Temperance Union and Anti-Saloon League pressed alcohol prohibition

Prohibition was mandated state-by-state

1920 – 18th Amendment a/k/a Volstead Act

1933 - Ratification of 21st Amendment repealing alcohol prohibition

States and local government continued forms of prohibition

Now? Sunday liquor sales, dry counties, etc.

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Prohibition HistoryFederal Bureau of Narcotics

Successor to Bureau of Prohibition

Established in 1930

Harry Anslinger was first commissioner; staunch

prohibitionist

Consolidated the Federal Narcotics Control Board and

the Narcotic Division

Enforced Harrison Narcotics Tax Act and Narcotic

Drugs Import and Export Act

Lobbied for harsh drug use penalties; criminalized drug

use

Responsible for the Marihuana Tax Act of 1937, The

Opium Poppy Control Act of 1942

Taxed sale of cannabis

First arrest: Denver, CO – first cannabis related conviction under federal law.

Stamps offered during WWII for cultivation of hemp fiber

Ruled unconstitutional in 1969 – Leary v. United States

Gave authority to FDA to oversee safety of food, drugs, and cosmetics

Authority for approving “new” drugs to FDA

Prohibition HistoryMarihuana Tax Act (1937)

Pure Food, Drug, and Cosmetics Act (1938)

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Prohibition HistoryInternational Treaties

1961 U.N. Single Convention on Narcotic Drugs

Efforts to consolidate other int’l treaties began in 1948

Limited to cannabis, opium, and coca related drugs

Basis for Controlled Substances Act

Article 49: encouraged phasing out traditional drug use (coca chewing, opium smoking), but provides that "the use of cannabis for other than medical and scientific purposes must be discontinued as soon as possible.”

U.S. was adamant about toughest scheduling (Schedule IV) for cannabis

1971 U.N. Single Convention on Psychotropic Drugs

Covers benzodiazepines, amphetamine-stimulants, barbiturates, and

psychedelics

Lists THC in Schedule I; drabinol (synthetic THC) in Schedule III

1988 Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances

Intends to increase penalties for organized criminal activity related to controlled substances, including money laundering

Prohibition HistoryControlled Substances Act (1970)

Enforced by DEA (created 1973) and FDA

Creates 5 schedules

Cannabis classified as Schedule I

Meets U.S. obligation under UN Single Convention on Narcotic

Drugs

Schedule I

The drug or other substance has a high potential for abuse

The drug or other substance has no accepted medical use in

treatment in the United States

There is a lack of accepted safety for use of the drug or other

substance under medical supervision

Shaffer Commissioner (1972)

Recommended cannabis be decriminalized and removed from

the CSA

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Prohibition HistoryOther Federal Changes

Bank Secrecy Act of 1970: Requires financial institutions

to assist the U.S. Government with detecting and

preventing money laundering

Comprehensive Crime Control Act of 1984: General

comprehensive revision of U.S. Criminal Code

Creates Sentencing Commission

Increased penalties for cultivation, distribution, and

possession of cannabis

Stipulations about civil asset forfeiture for criminal

activity

Prohibition HistoryAnti-Drug Abuse Act (1986)

“Tough on crime” legislation

Established mandatory minimum sentencing

100 plants/100 kilos – 5 years without parole

1000 plants/1000 kilos – 10 years without parole

Violent Crime Control and Law Enforcement Act (1994)

Mandatory life imprisonment if the Defendant:

is convicted in federal court of a "serious violent felony" and

has two or more prior convictions in federal or state courts, at least one of which is a "serious violent felony."

The other prior offense may be a "serious drug offense.”

A "serious drug offense" includes continuing criminal enterprise, violations of Title 21 involving distribution,

manufacture, or possession with intent to distribute significant quantities of controlled substances, or equivalent

state offenses.

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Prohibition HistoryResults of Prohibition 1914-2010

“The Onion”Levels of Cannabis Regulation

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International Treaty1961 U.N. Single Convention on Narcotic Drugs

Parties must enact laws to comply w/the treaty, but are not required to enforce them

Prohibits the production and supply of specific drugs

Allows for medical treatment and research

May or may not require criminalization of drug possession for personal use

Schedules I and IV: Cannabis and cannabis resin

UN Economic and Social Council's Commission on Narcotic Drugs (CND) given power to add or delete based on recommendations from WHO findings and recommendations

UN National Assembly does not have the power to approve or deny CND scheduling decisions

Non-compliance may result in economic sanctions on medical narcotics industry

Article 28 excludes industrial hemp from Single Convention

International Treaty1971 U.N. Single Convention on Psychotropic Drugs

Does not control plants, but controls natural and synthetic THC, in addition to other

psychotropic drugs (MDMA, LSD, peyote, mescaline)

THC: Tetrahydrocannabinol; a psychoactive cannabinoid

Provides looser controls than the 1961 UN Single Convention on Narcotic Drugs

1988 U.N. Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988

Attempts to control drug trafficking; escalates international “war on drugs”

Mandates cooperation for tracing and seizing drug-related assets

Article 3: Arguably requires penalties for personal use:

Subject to its constitutional principles and the basic concepts of its legal system, each Party shall adopt such measures as

may be necessary to establish as a criminal offence under its domestic law, when committed intentionally, the possession,

purchase or cultivation of narcotic drugs or psychotropic substances for personal consumption contrary to the provisions of

the 1961 Convention, the 1961 Convention as amended or the 1971 Convention.

Article 5: Requires forfeiture of proceeds from cultivation and distribution of scheduled drugs (incl. cannabis)

Article 6: Provides for extradition

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U.S. ConstitutionSupremacy Clause (Art. VI, Clause 2)

Due Process (5th Amendment)

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or whichshall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shallbe bound thereby, anyThing in the Constitution or Laws of any State to the Contrary notwithstanding.

Privileges and Immunities Clause (Art. IV, Section 2, Clause 1)

Commerce Clause (Art. VIII, Section 8, Clause 2)

[The Congress shall have Power] To regulate Commerce with foreign Nations,

and among the several States, and with the Indian Tribes;

The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.

No person shall ... be deprived of life, liberty, or property, without due process of law ..

Reserved Powers (10th Amendment)

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the

States respectively or to the people.”

Federal CodeControlled Substances ActMarijuana is a Schedule I drug under the Controlled Substances Act.

Schedule I drugs have a high potential for abuse and have no medical usein the United States.

Other Schedule I drugs include mescaline, MDMA, GHB, ecstasy, bath salts,LSD, and heroin.

Doctors cannot prescribe from Schedule I

The manufacture, sale and/or distribution of cannabis (medical, industrial, orotherwise) violates federal law.

The term "marihuana" means all parts of the plant Cannabis sativa L., whether

growing or not; the seeds thereof; the resin extracted from any part of such plant;

a and every compound, manufacture, salt, derivative, mixture, or preparation of

such plant, its seeds or resin. Such term does not include the mature stalks of such

plant, fiber produced from such stalks, oil or cake made from the seeds of such

plant, any other compound, manufacture, salt, derivative, mixture, or preparation

of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or

the sterilized seed of such plant which is incapable of germination.

Special requirements for research, including only obtaining product from a

federally approved cultivator

Provides a legislative and administrative process for rescheduling and

descheduling substances

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Federal Code2014 Farm Bill

Industrial Hemp: “the plant Cannabis sativa L and any part of such plant,whether growing or not, with a delta-9 tetrahydrocannabinol concentration ofnot more than 0.3 percent on a dry weight basis.”

Allows for industrial hemp grown or cultivated for purposes of researchconducted under an agricultural pilot program or other agricultural or academicresearch

Establishes a pilot program whereby States that permit growth or cultivation ofhemp under state law do so in a manner that –

Ensures that only institution of higher education and State departments ofagriculture are used to grow or cultivate industrial hemp

Requires that sites used for growing or cultivating industrial hemp in aState by certified by, and registered with, the State department ofagriculture, and

Authorizes state departments of agriculture to promulgate regulations tocarry out the pilot program in the States in accordance with the purposesof this section.

Federal CodeAppropriations (2014-2017)

None of the funds made available by this Act or any other Act may beused-- (1) in contravention of [the 2014 Farm Bill] section 7606 of theAgricultural Act of 2014 (7 U.S.C. 5940); or (2) to prohibit thetransportation, processing, sale, or use of industrial hemp that is grownor cultivated in accordance with [the 2014 Farm Bill] subsection section7606 of the Agricultural Act of 2014, within or outside the State in whichthe industrial hemp is grown or cultivated. (2016)

Current appropriations, through December 2017, continue to protectpatients and industrial hemp cultivators.

None of the funds made available in this Act to the Department of Justice may be used, with respect to any of the Statesof Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Iowa, Kentucky, Louisiana,Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, NewMexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia,Washington, Wisconsin, and Wyoming, or with respect to the District of Columbia, Guan, or Puerto Rico, to prevent any of them fromimplementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana. (2016)

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Federal PolicyDEA/FDA Scheduling Authority

FDA and DEA may decide scheduling under the CSA

Scheduling determination made based on potential for abuse, currently accepted medical use, and accepted safety

Definition of abuse:

Evidence that individuals are taking the drug inamounts sufficient to create a hazard to their health orto the safety of other individuals or to the community

There is significant diversion of the drug or drugscontaining such a substance from legitimate drugchannels

Individuals are taking the drug on their own initiative

The drug containing such a substance are new drugs sorelated in their action to a drug or drugs already listedas having a potential for abuse to make it likely that thedrug will have the same potential for abuse, making itreasonable to assume there may be significantdiversions from legitimate channels, significant usecontrary to or without medical advice, or that it has asubstantial capability of creating hazards to the healthof the user or to the safety of the community

Elements of “currently accepted medical use” Alliance forCannabis Therapeutics v. DEA, 15 F.2d 1131, 1135 (D.C. Cir. 1994)

The drug’s chemistry must be known and reproducible

There must be adequate safety studies

There must be adequate and well-controlled studiesproving efficacy

The drug must be accepted by ”qualified experts”

“Qualified experts” defined as a consensus of thenational community of experts, qualified by scientifictraining and experience to evaluate the safety andeffectiveness of drugs

The scientific evidence must be widely available

Lack of accepted safety for use of marijuana under medicalsupervision

No FDA-approved cannabis drug products

No evidence that substance is contamination free;assurance of consistent and predictable dose

Federal PolicyDept. of Justice

Department of Justice policy memorandums have been issued relating to medical (and recreational) cannabis:

Ogden (2009): Prosecutors should not focus federal resources where actions comply with state medical cannabis laws.

Cole (2011): Transactions dealing with proceeds of medical cannabis sales may trigger money laundering statutes.

Cole II (2013): Sets enforcement priorities to:

Prevent the distribution of cannabis to minors;

Prevent revenue from the sale of cannabis from going to criminal enterprises, gangs, and cartels;

Prevent the diversion of cannabis from states where it is legal under state law in some form to other states;

Prevent state-authorized cannabis activity as a cover or pretext for the trafficking of other illegal drugs or activity;

Prevent violence and the use of firearms in the cultivation and distribution of cannabis;

Prevent drugged driving and the exacerbation of other adverse public health consequences associated with cannabis use;

Preventing the growing of cannabis on public lands and the attendant public safety and environmental dangers posed by cannabis production on public lands; and

Preventing cannabis possession or use on federal property.

Cole III (2014): Clarifies that financial institutions are subject to money laundering and other finance related criminal statutes, but enforcement should remain consistent with the priorities outlined in Cole II.

Wilkinson (2014): Directs U.S. Attorneys to confer with tribal governments regarding cannabis on native reservations.

The current Administration is working under the Obama Administration policies, for now…

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State LawsMedical Cannabis

State LawsPersonal Use Cannabis

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State LawsIndustrial Hemp

State LawsWhere issues can arise

Patient Protection Issues – Employment, child protection, family court, necessary medical care,

schooling, housing

Regulation – No of licenses, hours of sales, minimum age to purchase, number of producers, labeling

requirements

Product Liability – Testing requirements, contaminants, liability waivers, negligence

Real Estate – Commercial and residential leases, land use, neighbor disputes, mortgages

Insurance – property and casualty, health insurance, liability, professional liability insurance,

workers’ compensation

Professional Conduct – legality of legal advice, use by attorneys (med or personal)

Financial – investments, banking, lending, debt forgiveness and insolvency

Corporate – business organization, owner disputes

Municipal – additional levels of regulation, land use and zoning,

Criminal – driving under the influence, diversion

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Court RulingsIn re Marijuana Rescheduling Petition, No. 86-22 (Drug Enforcement Admin. Sept. 6, 1988)

The administrative law judge recommends that the Administrator conclude that the marijuana plant considered as a

whole has a currently accepted medical use in treatment in the United States, that there is no lack of accepted safety

for use of it under medical supervision and that it may lawfully be transferred from Schedule I to Schedule II. The judge

recommends that the Administrator transfer marijuana from Schedule I to Schedule II.

U.S. v Oakland Cannabis Buyers' Cooperative, 532 U.S. 483, 121 S.Ct. 1711, 149 L.Ed.2d 722 (2001)

There is no medical necessity exception to the Controlled Substances Act's prohibitions on manufacturing and

distributing marijuana.

Conant v. Walters, 309 F.3d 629 (9th Cir., 2002)

To survive First Amendment scrutiny, the government's policy must have the requisite "narrow specificity." See

Button, 371 U.S. at 433, 83 S.Ct. 328. Throughout this litigation, the government has been unable to articulate exactly

what speech is proscribed, describing it only in terms of speech the patient believes to be a recommendation of

marijuana. Thus, whether a doctor-patient discussion of medical marijuana constitutes a "recommendation" depends

largely on the meaning the patient attributes to the doctor's words. This is not permissible under the First Amendment.

Court Rulings

Hemp Industries et al. v. DEA et al. 357 F.3d 1012 (9th Cir., 2004)

The DEA's Final Rules purport to regulate foodstuffs containing "natural and synthetic THC." And so they can: in

keeping with the definitions of drugs controlled under Schedule I of the CSA, the Final Rules can regulate

foodstuffs containing natural THC if it is contained within marijuana, and can regulate synthetic THC of any kind.

But they cannot regulate naturally-occurring THC not contained within or derived from marijuana — i.e., non-

psychoactive hemp products — because non-psychoactive hemp is not included in Schedule I. The DEA has no

authority to regulate drugs that are not scheduled, and it has not followed procedures required to schedule a

substance

Gonzales v. Raich, 125 S. Ct. 2195, 162 L.Ed.2d 1, 545 U. S. 1 (2005)

Congress' Commerce Clause authority includes the power to prohibit the local cultivation and use of marijuana in

compliance with California law.

Nebraska and Oklahoma v. Colorado (2016)

Motion for leave to file a bill of complaint denied.

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Court Rulings

United States v. McIntosh, 833 F.3d 1163 (9th Cir., 2016)

If the DOJ wishes to continue the prosecutions, the appellants are entitled to evidentiary hearings to determine

whether their conduct was completely authorized by state law. In determining the appropriate remedy for any

violation of § 542, the district courts should consider the temporal nature of the lack of funds along with the

appellants’ rights to a speedy trial.

Safe Streets Alliance v. Hickenlooper (10th Cir., 2017)

“We are not suggesting that every private citizen purportedly aggrieved by another person, a group, or an

enterprise that is manufacturing, distributing, selling, or using marijuana may pursue a claim under RICO. Nor are

we implying that every person tangentially injured in his business or property by such activities has a viable RICO

claim. Rather, we hold only that the Reillys alleged sufficient facts to plausibly establish the requisite elements of

their claims against the Marijuana Growers here.”

Additionally, the Court refused to issue a ruling that the CSA preempts Amendment 64 (for personal use

legalization in Colorado).

Current LitigationHemp Industries Association et al., v. Drug Enforcement Administration

Continuation – Currently in mediation

Based on a Motion for Order to Show Cause

Seeks judicial review of the DEA rule scheduling CBD on the basis that the action was inconsistent with the

law and effectively amounts to a scheduling action, which requires congressional approval

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Current LitigationWashington et al. v. Sessions et al.

Plaintiff #1Marvin Washington

Retired NFL player and Super Bowl champion; desires to obtain grants under Federal Minority Business Enterprise

program to open a business allowing professional football players treatment with medical cannabis to reduce

opioid dependence

Current LitigationWashington et al. v. Sessions et al.

11 year old patient with intractable epilepsy that moved to Colorado from Texas for medical cannabis treatment

Plaintiff #2Dean Bortell o/b/o Alexis Bortell

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Current LitigationWashington et al. v. Sessions et al.

Disabled military combat veteran with PTSD who uses medical cannabis

Plaintiff #3Jose Belen

Current LitigationWashington et al. v. Sessions et al.

6 year old patient with Leigh’s Disease who has been using medical cannabis to lengthen his life and control his

otherwise excruciating pain

Plaintiff #4Sebastien Cotte o/b/o Jagger Cotte

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Current LitigationWashington et al. v. Sessions et al.

A non-profit membership organization whose membership includes many people of color who contend the

CSA was enacted and has been enforced in an discriminatory manner, rendering them unable to participate

in, among other things, the cannabis industry

Plaintiff #5Cannabis Cultural Association, Inc.

Current LitigationWashington et al. v. Sessions et al.

Issues

Under the Due Process Clause of the Fifth Amendment, no person may be “deprived of life, liberty or

property without due process of the law”

SCOUTS has consistently held that discrimination may be so unjustifiable as to constitute a violation of the

Due Process Clause of the Fifth Amendment, and that the CSA was enacted and enforced in a manner

reflective of racial discrimination, hostile to the interests of African Americans and other people of color

The CSA was tactically enforced against war protesters and persons of color, which violates the First

Amendment and Due Process Clause of the Fifth Amendment

Freedom to travel throughout the US, including between and among states, is a basic right under the

constitution, and the CSA interferes with this fundamental right for patients Alexis, Jose, and Jagger for

which cannabis is necessary for their healthy and productive lives

The Commerce Clause (Article 1 §8, cl.3) limits the power of Congress “to regulate Commerce with foreign

nations, and among the several states, and with the Indian tribes. The Commerce Clause does not include

a general power to regulate intra-state commerce, or a federal police power

Under the provisions of the CSA, de-scheduling or rescheduling a drug such as cannabis must be

supported by medical and/or scientific evidence – such as the evidence cited in the US Cannabis Patent

Application

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Current LitigationWashington et al. v. Sessions et al.

Relief Requested:

Declaring the CSA as it pertains to the cultivation, distribution, marketing, sale, prescription

and use of Cannabis, unconstitutional under the Due Process Clause of the Fifth Amendment,

the Right to Travel, and the Commerce Clause, together with:

(i) a permanent injunction (and temporary relief if so required), restraining Defendants

from enforcing the CSA as it pertains to cannabis,

(ii) reasonable legal fees and costs pursuant to the Equal Access to Justice Act, 28 U.S.C.

§2412, insofar as the Federal Government cannot maintain its position on the existing

record that continued enforcement of the CSA as it pertains to cannabis is “substantially

justified,” and

(iii) any and all other and further relief this Court deems just and proper.

Questions?Maren Joyce Schroeder, RP®, MnCP

President, Sensible Minnesotamaren@sensible.mn

www.sensible.mnFacebook: /sensiblemn | Twitter: @sensiblemn | Instagram: @sensiblemm

Marijuana Policy Project www.mpp.org

Drug Policy Alliance www.drugpolicy.org

National Cannabis Industry Association www.thecannabisindustry.org

Hemp Industry Association www.thehia.org

Law Enforcement Action Partnership www.lawenforcementactionpartnership.org

Cannabis Cultural Association www.cacnnacultural.org

National Organization for the Reform of Marijuana Laws www.norml.org

Stay InformedWant to learn more and keep up-to-date? Check out these organizations!