Marijuana Industry Lawsuit Has ‘Zero Chance’ Of Being Heard By Supreme Court, Former DOJ Lawyer Says (Op-Ed)

*“The odds are always against the Supreme Court hearing any particular
case, but the cannabis industry’s approach in this one absolutely ensures
it won’t happen.”*

*By James B. Mann, former U.S. Department of Justice Tax Division deputy
assistant attorney general*

A much-hyped lawsuit meant to challenge federal cannabis law has officially
flamed out. The First Circuit Court of Appeals recently issued a unanimous
opinion rejecting *Canna Provisions v. Garland* (also known as *Canna
Provisions v. Bondi*), a case widely seen as the cannabis industry’s best
shot at attacking federal prohibition through the courts.

The case was intended to strike down cannabis’s Schedule I classification
under the Controlled Substances Act and eliminate the crushing tax burden
imposed by Section 280E of the Internal Revenue Code. Instead, it ended in
a resounding defeat—with precisely zero chance of being heard by the
Supreme Court.

Section 280E is one of the most punishing burdens facing the legal cannabis
industry. Originally enacted in the 1980s to prevent drug traffickers from
deducting business expenses, 280E blocks cannabis operators—even fully
legal ones under state law—from writing off ordinary costs like rent,
payroll or equipment. The result is that cannabis businesses often pay two
to three times more in federal income tax than they would if they sold any
other legal product.

The cannabis industry’s battle against 280E is now being waged across all
three branches of government. Congress is being lobbied for legislative
relief. The executive branch is being pressured to reschedule cannabis so
280E no longer applies. And the judiciary has been pulled in through legal
challenges like Canna Provisions.

The lawsuit was filed with much fanfare in October 2023—it was funded by
many of the large cannabis companies and used a big-name law firm, Boies
Schiller. The goal was to overturn a 2005 Supreme Court decision, *Gonzales
v. Raich*. In *Raich*, the Court upheld the Controlled Substances Act as
applied to cannabis grown solely for personal medical use within one state.

Boies Schiller essentially made two arguments—first, that the realities of
the cannabis market had changed so much since 2005 that *Raich* was
outdated and wrong, and second, that Congress had passed legislation
proving cannabis no longer belongs in Schedule I. The First Circuit wasn’t
having any of it. The 3-0 opinion pointed out that even though the facts
had changed, they had not changed enough to make Congress’s classification
irrational as part of a comprehensive regime of drug regulation (the
relevant test).

The court also dismissed the claim that federal legislation proved cannabis
should be removed from Schedule I. The opinion noted that the funding
restrictions were limited in their effect and applied only to medical
cannabis (Canna Provisions and the other plaintiffs are adult-use sellers).

Interestingly, the opinion repeatedly criticizes the lack of logical
development of Canna Provisions’s arguments, going so far as to dismiss one
of the most important arguments for “lack of development.”

Supreme Court justices vote on what cases to hear, and it takes four votes
to put a matter on the docket. In a lawsuit like Canna Provisions, there is
no split among the circuit courts for the Supreme Court to resolve. That
means the only real path to a hearing was to convince the justices that the
case presented an urgent federal legal question.

There is one justice still on the bench from *Raich*—Justice Clarence
Thomas. His dissent in that case, and his opinions in other Commerce Clause
cases, emphasize his belief that federal power has stretched far beyond the
Framers’ intent. Justice Sandra Day O’Connor’s dissent also argued that the
federal law intruded on core state powers.

Bizarrely, Boies Schiller never raised the arguments made by either Thomas
or O’Connor. It’s unclear who they thought would vote to hear the case
based on the strategy they pursued.

And while oral argument isn’t usually a decisive factor in appellate
decisions, it didn’t help that David Boies was completely shredded by the
three-judge panel. (The First Circuit has publicly available recordings of
oral arguments.) Boies was once one of the most prominent litigators of his
generation—there’s even a chapter in a Malcolm Gladwell book about his mind
and how he overcame dyslexia. But at 84, he was unprepared for basic
questions and clearly no longer at his peak.

The odds are always against the Supreme Court hearing any particular case,
but the cannabis industry’s approach in this one absolutely ensures it
won’t happen. More broadly, Canna Provisions underscores the complexity of
using litigation to advance federal cannabis reform. While carefully
crafted legal challenges may still have a role, this case failed to present
the type of arguments or posture that could realistically have drawn the
Supreme Court’s interest.

*James B. Mann is a tax attorney whose practice centers on cannabis
taxation and complex business tax planning. A Harvard Law and Columbia MBA
graduate, he previously served as deputy assistant attorney general in the
U.S. Department of Justice’s Tax Division, led tax-debt advisory at Société
Générale, and represented major cannabis clients—including arguing the
Harborside case in the Ninth Circuit.*

Matt Gaetz Pictured Reviewing Contract To Provide Top Marijuana Company
With ‘Administration-Related’ Support Amid Rescheduling Push

*Photo elements courtesy of rawpixel and Philip Steffan.*

The post Marijuana Industry Lawsuit Has ‘Zero Chance’ Of Being Heard By
Supreme Court, Former DOJ Lawyer Says (Op-Ed) appeared first on Marijuana
Moment.