Cannabis: In Focus
- Seattle Federal Court Dismisses Dormant Commerce Clause Challenge
- Manhattan DA Attempts To Curb Illegal Cannabis Sales by Targeting Landlords
- Australia Legalizes Prescriptions of Psilocybin and MDMA
Seattle Federal Court Dismisses Dormant Commerce Clause Challenge
A Seattle-based federal court dismissed a challenge to a state residency requirement to hold equity in Washington state cannabis businesses. The plaintiff, an Idaho resident, had provided debt financing for Washington cannabis businesses but could not hold equity in the companies because of the state’s residency requirements. The court upheld the state’s residency requirement, holding that the U.S. Constitution’s Dormant Commerce Clause (DCC) does not protect federally-illegal commerce.
The DCC presents a unique challenge to regulations regarding the cannabis industry. The constitutional principle prevents states from inappropriately burdening interstate commerce. In its order, the court determined that federally-illegal interstate commerce was not subject to the DCC’s ambit.
The recent Washington decision is in direct contrast to a decision from the U.S. Court of Appeals for the First Circuit that was issued last year, which struck down a similar residency requirement in Maine on DCC grounds.
The DCC remains a fertile ground for further litigation regarding cannabis law and policy, and Perkins Coie lawyers continue to monitor activity in this area, going so far as to call it a “sleeping giant.”
Manhattan Attempts To Curb Illegal Cannabis Sales by Targeting Landlords
More than 400 warning notices went out to Manhattan landlords regarding tenants operating illegal cannabis businesses out of their properties. New York Mayor Eric Adams and Manhattan’s top prosecutor announced that unlicensed businesses could be evicted by the city if they continue to operate.
Despite New York’s legalization of recreational cannabis, the illicit market is prevalent, particularly in the Big Apple; we have previously covered the city’s attempts to crack down on illegal cannabis sales via QR code verification placards and a pilot task force. This latest action allows the New York City government to take over eviction proceedings for landlords who fail to act themselves.
Australia Legalizes Prescriptions of Psilocybin and MDMA
Australian authorities have changed the classification of psilocybin and MDMA to enable prescriptions by eligible psychiatrists. Starting in July 2023, psychiatrists in Australia will have the option of prescribing psilocybin and MDMA for patients suffering from depression and post-traumatic stress disorder. Psychiatrists will be required to obtain approval from an ethics committee and authorization from the Therapeutic Goods Administration (TGA) in order to prescribe the drugs.
Australian authorities made this decision with consideration of a report reflecting results from eight studies of MDMA and six of psilocybin. The researchers concluded that the drugs were effective in “clinically supervised settings and with intensive professional support.” TGA also noted the lack of other treatment options for patients with treatment-resistant mental illnesses.
Back in the United States, Perkins Coie lawyers, led by Seattle Managing Partner James Williams, recently filed suit against the U.S. Drug Enforcement Administration (DEA), challenging the denial of a petition to reschedule psilocybin.