U.S. v. McIntosh – New Ninth Circuit Case

Fennemore Craig Update

U.S. v. McIntosh – New Ninth Circuit Case

Businesses and individuals involved in the medical marijuana industry can breathe a sigh of relief after the Ninth Circuit ruled on August 16, 2016 that the Federal Government is prohibited from prosecuting businesses and individuals that operate in compliance with state law. See United v. McIntosh, Case No. 15-10117 (9th Cir. 2016). On December 18, 2015, the United States Congress, as part of the Consolidated Appropriations Act, prohibited the Department of Justice from using any funds to prevent the implementation of state medical marijuana laws. At the time of passage it was unclear what actual effect the prohibition would have on prosecution of marijuana operations operating legally under state law.

After the passage of the Consolidated Appropriations Act, several entities and individuals appealed to the Ninth Circuit and sought dismissal of their criminal indictments. The Ninth Circuit held that the Consolidated Appropriations Act, prohibits the Federal Government from “preventing the implementation of those specific rules of state law that authorize the use, distribution, possession, or cultivation of medical marijuana.” However, the Ninth Circuit held that the Federal Government is not prohibited from prosecuting those “who do not strictly comply with all state-law conditions regarding the use, distribution, possession, and cultivation of medical marijuana….” According to the Ninth Circuit, those individuals who fail to comply have “engaged in conduct that is unauthorized, and prosecuting such individuals does not violate [the Consolidated Appropriations Act].” 

The appeals were ultimately remanded to the appropriate District Courts for “evidentiary hearings to determine whether their conduct was completely authorized by state law…that they strictly complied with all relevant conditions imposed by state law on the use, distribution, possession, and cultivation of medical marijuana.” On a final note, the Ninth Circuit noted that the Consolidated Appropriations Act was temporary and, therefore, funds could be made available at any time and prosecutions could then resume for any violation of the Controlled Substance Act.

While a victory for the medical marijuana industry, McIntosh has two important lessons. First, compliance with state laws is paramount. Entities and individuals must demonstrate they complied with all relevant conditions to shield themselves from prosecution. Second, the shield of the Consolidated Appropriations Act is temporary and no substitute for more permanent and substantive federal legislation on the legality of medical marijuana operations.