Letter: Federal Law Trumps Nevada’s Marijuana Initiative

White House Press Secretary Sean Spicer’s February 23 comments on marijuana received major attention in Nevada. Spicer volunteered that marijuana is still illegal under federal law and there would be “greater enforcement” in states that legalized recreational marijuana.

Marijuana is illegal to possess, cultivate or distribute under the federal Controlled Substances Act . Last August, the Obama administration’s Drug Enforcement Administration director re-affirmed marijuana’s classification as a Schedule 1 substance. That decision was made after a lengthy evaluation of the existing relevant scientific and medical evidence by the Department of Health and Human Services. The official findings were that marijuana has “no currently accepted medical use in the United States” and has “a high potential for abuse”.

It is settled case law that states (like Nevada) cannot bar the application of the federal Controlled Substances Act within their borders. The U.S. Supreme Court in the case of Gonzales v. Raich (2005) held 6 to 3 that the Commerce Clause allows Congress to ban the use of marijuana even in states that approve its use for medicinal purposes. Growing, selling, or even possessing small amounts of medical-marijuana remains 100% illegal under federal law.

The only thing currently keeping federal agents from enforcing federal law is the 2013 Justice Department “Cole Memorandum” making marijuana a low priority and permitting localities and states to enforce their own laws. The new Attorney General, Jeff Sessions, has been a strong opponent of legalized marijuana during his Senate career. Sessions has full authority to withdraw the “Cole Memorandum” and pursue a different policy.

In Nevada’s neighboring state of Idaho, Governor Butch Otter protested in a January 30 letter to President Trump that his state was “paying the price” for compliance with federal law. He observed that illegal marijuana brought into his state negatively impacted his state’s youth, taxpayers, law enforcement, jails and health care systems. Governor Otter urged the new administration to “use the full powers of the federal government” against states that have legalized marijuana.

Since marijuana is prohibited by the Controlled Substances Act, all marijuana-related sales revenues constitute illegal funds under federal law. Banks must disclose marijuana transactions as “suspicious activities” and are subject to government seizure by the Federal Deposit Insurance Corporation. As a result, virtually all banks have a policy of not working with the marijuana industry. Marijuana businesses are “cash only” with a high incidence of burglaries, robberies, employee theft—and have no lines of credit.

Similarly, the Nevada Gaming Control Board Chairman A.G Burnett has made it clear that there can be no involvement by gaming licensees with marijuana facilities or establishments unless federal law is changed. It’s also the basis for the gaming industry prohibition against smoking pot in hotels or casinos. With marijuana smoking illegal in public places, hotel rooms, and casinos, it’s difficult to see how Las Vegas becomes the “Amsterdam of the West” or a tourism boon.

The marijuana initiative passed in November provided exclusive rights on marijuana distribution be given to state licensed alcohol wholesalers. An unanticipated problem: those wholesalers are licensed under the Federal Alcohol Administrative Act and required to “operate in conformity with federal law”. Distributing illegal marijuana under federal law results in revocation of their liquor licenses.

The Nevada System of Higher Education, the governing board of the state’s public colleges, has adopted policy to not allow marijuana on campus. These institutions are at risk of losing federal funding because the use or possession of marijuana is prohibited by federal law.

Likewise, U.S. Attorney Daniel Bogden wrote Moapa Paiute Tribal leaders that use of pot on tribal land at a planned March 4-5 “marijuana festival” was illegal and would be subject to enforcement under federal law. The tribal council expressed concern about their federal funding being withheld.

A crazy quilt of conflicting marijuana policies exists today. Federal law trumps provisions in Nevada’s legalization initiative.

— Jim Hartman is an attorney and resides in Genoa, Nev.