Background of the Legal Challenge
In October 2023, several state-legal cannabis businesses, including Verano Holdings, Canna Provisions, Wiseacre Farm, and cannabis delivery courier Gyasi Sellers, initiated a federal lawsuit in Massachusetts. They argued that the Controlled Substances Act (CSA), which classifies marijuana as a Schedule I drug, should no longer be enforced against legal cannabis businesses operating solely within state boundaries. The plaintiffs asserted that the federal prohibition on cannabis imposes significant burdens on otherwise lawful enterprises—obstructing access to banking, loans, insurance, and federal protections, while also inviting the risk of criminal penalties.
The lawsuit also pointed to a shifting federal stance. For over a decade, successive administrations have adopted a largely hands-off approach to state cannabis markets. Federal agencies, including the Department of Justice, have routinely refrained from enforcing cannabis prohibitions against state-compliant operators. The plaintiffs claimed this inconsistency underscores the outdated nature of the CSA’s cannabis classification and enforcement.
First Circuit Court’s Ruling
On May 27, 2025, the First Circuit Court of Appeals upheld the dismissal of the case. In the court’s opinion, Chief Judge David Barron emphasized that despite the federal government’s sporadic enforcement of the CSA, the plaintiffs had not shown that their intrastate cannabis activities had no impact on interstate commerce. This is a crucial threshold for determining the legitimacy of federal regulation under the Commerce Clause.
The court concluded that cannabis, even when cultivated, sold, and consumed entirely within one state, still affects interstate markets and therefore remains subject to federal oversight. The decision aligned with longstanding Supreme Court precedent, particularly the 2005 ruling in Gonzales v. Raich, which held that even homegrown cannabis intended for personal medical use could be regulated under the CSA.
Appeal to the Supreme Court
The cannabis companies involved in the case now plan to petition the U.S. Supreme Court to hear the appeal. While the Supreme Court is not obligated to take the case, there is growing judicial interest in cannabis reform. In a 2021 opinion, Justice Clarence Thomas questioned the constitutionality of federal marijuana laws in an environment where the federal government has allowed state markets to flourish, noting that the “half-in, half-out” approach undermines legal consistency.
The plaintiffs hope this evolving perspective will prompt the Court to reconsider the reach of the CSA in the context of modern cannabis regulation.
Industry and Legal Implications
If the Supreme Court agrees to hear the case and rules in favor of the plaintiffs, it could reshape the legal landscape for cannabis in the United States. A favorable decision might prevent federal interference in state markets, enable cannabis businesses to access traditional financial services, and remove a host of legal uncertainties that currently constrain the industry.
Alternatively, if the Court declines to hear the case or upholds the lower court’s ruling, federal cannabis prohibition will remain intact, maintaining the existing legal and financial hurdles that state-compliant businesses continue to navigate.
A Crossroads for Cannabis Policy
This legal challenge arises as the disconnect between federal and state cannabis laws grows increasingly untenable. More than 75 percent of states have legalized medical marijuana, and half now allow recreational use for adults. Yet cannabis remains illegal under federal law, creating operational and regulatory contradictions for businesses, patients, and consumers.
Whether or not the U.S. Supreme Court chooses to engage, this case highlights the urgent need for comprehensive federal cannabis reform and underscores the legal gray zone that persists more than a decade after state-level legalization began.
