If you live in a state that legalized medical or recreational marijuana use, it may come as an unpleasant surprise to learn that you are still committing a federal crime by possessing, buying, or selling marijuana. The problem is, despite the liberalization of state laws across the country, federal law still treats marijuana as a controlled substance, just like cocaine or heroin.
This conflict between state and federal law creates a situation where you can be charged with a federal crime for activities that are allowed by your home state, although federal agencies mostly have been reluctant to do so. There are also several ways that federal marijuana laws can affect everyday life decisions, from where you bank to where you live.
Understanding Federal Marijuana Laws
Since the 1930s, federal law has declared the use, sale or distribution of marijuana illegal. Current federal drug laws are contained in the Controlled Substances Act (CSA). The CSA classifies and regulates illegal drugs, and places listed drugs on a schedule according to their medicinal value and potential for abuse.
Under the CSA, marijuana is a Schedule I controlled substance. This designation is reserved for drugs that have a high potential for abuse, lack any medical value, and can’t be safely prescribed. Anyone growing, marketing, or distributing marijuana is likely violating multiple federal laws (but, as noted earlier, it’s a matter of enforcement)..
You can run into problems with the CSA even if you’re not directly involved with the marijuana industry. If you provide services to a business that operates under state marijuana laws, you may also be violating federal law and thus subject to prosecution. So if you run a janitorial service and have a client that operates a dispensary, you may be profiting from illegal drug trafficking.
The CSA also makes it unlawful to “knowingly open, lease, rent, maintain, or use property for the manufacturing, storing, or distribution of controlled substances.” So landlords that have tenants involved in state-permitted marijuana industry may risk federal asset forfeiture or other criminal fines.
Penalties for violating the CSA are not just targeting growers and distributors. Simple possession with no intent to distribute is a misdemeanor, punishable by up to one year in prison and a minimum fine of $1,000. Individuals involved in marijuana businesses can receive up to five years in prison and fines up to $250,000 for individuals and $1 million.
There is currently a ceasefire in the federal war on medical and even recreational marijuana as long as individuals adhere to state law and don’t engage in interstate commerce. Since 2014, Congress has approved a budget amendment that prohibits the Department of Justice to use funds to prevent state from implementing their medical marijuana laws. Known as the Rohrabacher-Farr or CJS amendment, this piece of legislation must be acted on each year to keep it in place so its future is uncertain.
Federal Law and State Ballot Initiatives
State ballot measures to legalize marijuana have no impact of federal law or the CSA. In 2005, Congress’ constitutional authority under the Commerce Clause to ban local marijuana production and consumption was affirmed by the Supreme Court in Gonzales v. Raich. Under the Commerce Clause, Congress has the power to regulate purely local activities that are part of an economic “class of activities” that have a substantial effect on interstate commerce. This is the reason that no state law will affect the federal classification of Marijuana as a Class I controlled substance
Common Conflicts With Federal Marijuana Laws
The ongoing conflict with federal law can make it for problems in your day-to-day life. The following are common issues you should be aware of:
Employment
You can be fired from your job for your off-the-clock use of marijuana. So says the Supreme Court in Coats v. Dish Network (2015),a Colorado case where an employee sued for wrongful termination after testing positive for marijuana. State unfair employment practice laws generally find it unlawful to prohibit legal activities as a condition of employment. In many states the use of marijuana is legal. But under federal law, the use of marijuana is illegal so it can be prohibited by an employer.
Labor laws are not only determined by your home state. The Fair Labor Standards Act, and other federal laws and agency regulations also set workplace rules. For example, the federal government sets a national minimum wage, maintains child labor laws, and rule prohibiting forms of discrimination. Employers must maintain an environment that is consistent with both these state and federal rules.
These conflicting laws also create problems in some professions. Doctors cannot legally prescribe marijuana since it is a Schedule I drug under the CSA. A few doctors have lost their license or been reprimanded by state medical boards, but stricter enforcement is still possible. Lawyers also risk their licenses when advising clients involved in the marijuana industry, since they are providing advice on how to violate federal law.
Housing
Renters can face eviction even when their marijuana uses is compliant with their state’s law if their lease prohibits illicit drugs. Since federal law states marijuana is a controlled substance, it can be prohibited by your landlord. If you are a section 8 or other federal housing aid recipient, you are not allowed to use marijuana. Violations can lead to a loss of benefits or eviction.
Taxes
If you work in the marijuana industry, you are likely familiar with Internal Revenue Code Section 280E. This law prohibits marijuana businesses from deducting ordinary business expenses such as marketing, training, transportation. What it creates is a federal tax rate of 60 to 90 percent. These businesses can deduct cost of goods sold, so shrewd accounting incorporates many of their expenses into the cost of goods.
Right to Bear Arms
The 9th U.S. Circuit Court of Appeals held that if you have a medical marijuana card you can be prevented from buying a gun. The court held this ban on gun ownership did not violate the Second Amendment since federal law prohibits gun purchases by an “unlawful user and/or an addict of any controlled substance.” In 2011, the Bureau of Alcohol, Tobacco and Firearms clarified in a letter that the law applies to marijuana users regardless of their home state’s laws.
Banking
Many banks and credit card companies are reluctant to provide accounts to participants in the marijuana industry for fear of prosecution under the CSA. The U.S. Department of Treasury has issued guidelines on how financial companies can services the industry without violating federal money laundering laws.
Confused About State and Federal Marijuana Laws? An Attorney Can Help
Being charged with a federal drug crime is serious business, and punishment for people found guilty is frequently very severe. Further complicating matters, federal courts don’t recognize state medical or recreational marijuana laws as a defense to possession or cultivation. If you’re being investigated for a marijuana-related offense, it’s important to understand the law and your rights. Get in touch with a drug crimes attorney today.