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California marijuana dispensary scores victory against DOJ … but how long will it last?

Rowena Santos Jeff Brown November 30, 2015

The Marin Alliance for Medical Marijuana (MAMM), one of California’s oldest lawful marijuana dispensaries, won a major victory against the U.S. Department of Justice (DOJ) in October. In U.S. v. Marin Alliance for Medical Marijuana, the U.S. District Court for the Northern District of California held that the DOJ’s permanent injunction against MAMM’s distribution of marijuana in violation of the federal Controlled Substances Act (CSA) could only be enforced against MAMM insofar as that organization is in violation of “State laws that authorize the use, distribution, possession, or cultivation of medical marijuana,” in this case, California’s.

This decision is one of the first to scrutinize the interplay between state and federal laws regarding the legality of marijuana sales. Federal law prohibits the sale of marijuana, which is a Schedule I drug under the CSA. But, under state law, California’s Compassionate Use Act of 1996 exempts from state criminal prosecution physicians, patients and primary caregivers who possess or cultivate marijuana for medicinal purpose with a physician’s recommendation. See Cal. Health and Safety Code § 11362.5 (“Compassionate Use Act”).

The Court relied upon Section 538 of the Consolidated and Further Continuing Appropriations Act of 2015 in walking the tightrope between federal and state laws. Section 538 expressly prohibits the DOJ from expending any funds to prevent California [and 32 other states] from “implementing [its] own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” While the Court rejected MAMM’s equitable arguments against the enforcement of the federal Controlled Substances Act, it nonetheless held: 

The CSA remains in place, and this Court intends to enforce it to the full extent that Congress has allowed in Section 538, that is, with regard to any medical marijuana not in full compliance with “State law [ ] that authorize[s] the use, distribution, possession, or cultivation of medical marijuana.

Though the court provided some welcome relief to MAMM (and other California dispensaries), Section 538 is part of the annual funding bill set to expire on Dec. 11, 2015 – unless Congress renews it.

Jeff Brown is a partner and Rowena Santos is counsel in Thompson Coburn's Business Litigation Group.


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