As cannabis remains federally illegal in the United States, it’s left industry professionals with a handful of limitations as the cannabis space continues to grow. For California, which is notoriously navigating its own myriad struggles and a near-bursting economic bubble within the cannabis industry, one of those issues is interstate commerce.
Gov. Gavin Newsom (D) signed a law last year which would allow him to enter agreements with other legal cannabis states to import and export cannabis products, though the legislation stipulates that these actions cannot take place until federal law changes, until federal guidance shifts to allow such action or the state attorney general confirms that there is no sizable risk in partaking.
Golden State officials are now pressing forward in their quest for answers on the topic, seeking a formal opinion for the California attorney general’s office regarding whether interstate commerce would put the state at risk of federal enforcement action, Politico reports.
Matthew Lee, general counsel for the Department of Cannabis Control (DCC), and DCC Director Nicole Elliot sent the letter to California Attorney General Rob Bonta’s (D) office on Friday. The letter contains an eight-page analysis laying out the reasons that the department believes California would avoid federal legal challenges should interstate cannabis commerce be allowed.
The letter also cites the anti-commandeering rule in the U.S. Constitution, which deems that Congress cannot direct a state to legislate in a certain way, regardless of what federal policy says. This, according to the letter, would protect California from liability under federal law, should it choose to legalize and regulate commercial cannabis activity “as a matter of its own state laws.”
““This remains true where, as here, the activity to be authorized under state law involves interstate commerce—such as commerce between in-state and out-of-state cannabis licensees,” the letter reads. “The anti-commandeering rule does not rise or fall based on the strength of any underlying federal interest.”
For California specifically, interstate commerce could be huge to help struggling farmers and brands, though no other state has set up any process surrounding cannabis imports.
Should Bonta sign off and affirm that the move is legal, Gov. Newsom would be allowed to negotiate deals with other governors. This move would be an important, though incremental, step toward interstate commerce becoming reality, even before federal cannabis prohibition is repealed. Hirsch Jain, a Los Angeles-based cannabis consultant, told Green Market Report that even if Bonta signed off, interstate cannabis commerce wouldn’t happen immediately, likely not even this year.
“This is by no means a green light,” Jain said, adding that Newsom and governors in other states would need to navigate lengthy negotiations on a plethora of logistical details, and just that process could be months long. That said, he affirmed that the step is valuable, not only for California but for the national cannabis market.
“The value of this is in the signal that it sends,” Jain said. “This starts the mechanics of a process, but the real value is it gets the attention of other states, it gets the attention of the federal government.”
Conversely, this logic suggests that disallowing cannabis imports and exports could be seen as unconstitutional, a conversation that’s already stated. Back in November, an Oregon cannabis business filed a lawsuit in federal court suggesting just that: A ban on cannabis imports and exports to and from other states violates the U.S. Constitution.
“Indeed, Oregon’s export prohibition—together with the import/export prohibitions of other states—has created the very evil the drafters of the United States Constitution were concerned with preventing: that farmers from one state are denied the markets of another,” an open letter to former Oregon Gov. Kate Brown reads. ”This has unfairly hobbled Oregon’s marijuana industry and stymied it at a time when it should be flush with growth.”
Washington approved an interstate cannabis commerce bill, and Oregon was the first to take the step in 2019, when Brown signed interstate cannabis commerce into law. New Jersey filed a similar proposal in 2022, though it has yet to be enacted.
