You might be asking yourself how possible it is for the cannabis industry to be affected by issues concerning. Well, the Dormant Commerce Clause could have something to say about that. If you follow Cannabis.net you know we have done a few stories on this now famous clause and even interviewed Professor Mikos, the guy who started this whole idea about shipping cannabis state-to-state may actually be legal right now. Deb Borchardt, our friend at GreenMarketReport, put the idea out there that pig farmers may have a dramatic effect on cannabis legalization going forward. For those that are conversant with the clause and its effect on interstate commerce, we could be picturing the effects on states that intend to create residency requirements for cannabis licensing. For those that don’t, not to worry, we have you covered. Read on as we expatiate all there is to know about how pig farmers could affect interstate commerce.
In simple terms, the Dormant Commerce Clause prohibits state legislation which might affect interstate or international commerce. The clause helps in situations where different states have different legislations on different matters. Thus, it seeks to make interstate commerce in federal territory as opposed to a state issue. The first sighting of the Dormant Commerce Clause came to the fore in 1873 when the Supreme Court struck down a state law in Reading Railroad v. Pennsylvania. The state had intended to tax the railroads for passing through the state before the Supreme Court ruled against it. Generally, the DCC allows the courts to come in in situations where a state law benefits the state while affecting an individual in another state.
Cannabis remains illegal federally but this has not stopped many states from legalizing its use both for medical and recreational purposes. While doing this, many states decided to limit the licenses to residents of the state. This created a boom in the cannabis industry and saw the growth and development of many sectors within it. States like Colorado which was the first to legalize saw a positive migration into the state as many were looking to get into the cannabis industry.
However, it seems the DCC has come to the fore in this arrangement as some states are losing the fight for residency to have to license. Maine is one of such states who has lost this battle in court thanks to the DCC. New York is also being sued by a Michigander on the same principle. Naturally, one would expect that the illegality of cannabis federally will exempt it from the clause but it seems to be covered under federal laws as things stand.
The DCC has also been an issue for the cannabis industry with respect to social equity clauses. The faults against state residency can also be applied to social equity licenses. What this means is that if the state cannot carve out groups for residency, it cannot create special programs to help people previously incarcerated. Invariably, a win for interstate commerce could easily mean a loss for social equity applicants.
Another aspect of the cannabis industry at the mercy of the DCC is the transportation of cannabis across state lines. Many cannabis firms at the moment have to operate duplicate systems across multiple states because of restrictions on interstate transportation of cannabis. This has brought forth the argument that transportation of cannabis across state lines will improve the efficiency of these companies. There are two sides to and against the transportation of cannabis across state lines. States with an oversupply of cannabis are in favour as expected while those who have expended much to develop the industry in distressed areas are against it.
The issue of interstate cannabis transportation also pops up the age-long feud of corporate firms against local farmers. There is set to be a loss of jobs and commerce when cheaper cannabis-producing states bring their products across state lines thereby undercutting the farmers. This is the situation of farmers in New York who run the risk of losing their market if cannabis from Oregon is allowed into the state. There are however still small states like Vermont that would love to embrace interstate commerce as they look to satisfy more than their population.
What relates pig farmers to the issue of cannabis interstate commerce is a result of a case before the Supreme Court on animal welfare initiative in California. California gets 99% of its port from farmers in other states and a new proposition by the state puts them in a tight corner. Proposition 12 from California moves to ban all forms of pork that come from pigs born to mothers kept in confined spaces. This proposition is for Californians as 63% of them voted for it in accordance with livestock practices that they find abhorrent. Unfortunately, the pig farmers in different states are the ones who look set to pay the price for the law.
This case has got different Justices of the Supreme Court looking from different angles based on the complexity of the case. While some are looking to protect the integrity of the DCC as history has backed it up. Yet, there is still the role of the court to understand the moral interest of the citizens of California. Nothing is decided on at the moment as the members of the supreme court have only spoken about it among themselves at the moment. Most decisions so far have been consistent with the DCC so it’s easy to see how the Supreme Court will lean. However, if New York wins its case for residency against the Michigander, we might see a tweak in the DCC.
We are still a very long way from anything concrete as it pertains to the DCC, the pig farmers’ case and its consequent effect on cannabis interstate commerce. The only thing we can only do now is to wait and see if a tweak in the DCC is to be expected. While some might believe it’s a bit of a stretch to expect such a decision from the Supreme Court, it was also what many though about Roe vs. Wade and we all know how that turned out. Whether the DCC becomes tweaked, definition of burden reviewed or interstate commerce will win over social equity, time will tell.