State-sanctioned caregiver status will not necessarily shield cannabis operators in Maine from federal scrutiny, as per a Jan. 26 ruling from the First Circuit Court of Appeals. A rider to the annual federal appropriation bill for the Department of Justice has barred any spending that would hinder state medical cannabis programs since 2015, but this does not bar investigation into egregious violators.
“Congress surely did not intend for the rider to provide a safe harbor to all caregivers with facially valid documents without regard for blatantly illegitimate activity in which those caregivers may be engaged and which the state has itself identified as falling outside its medical marijuana regime,” wrote Appellate Judge William Kayatta in a 25-page opinion confirming the conviction of a pair of cannabis caregivers that were distributing flower beyond their state-approved caregiver limits.
While not mandating perfect compliance of state cannabis regulations, the court ruled that the defendants in this particular case were egregiously in violation of state law, as well as the federal cannabis prohibition.
[Download the appellate decision]
Brian Bilodeau, Tyler Poland, and their respective companies operated three separate cultivation sites in Auburn, Maine according to the opinion. Federal investigators targeted those three sites from 2016 to 2018. The investigation culminated in a series of raids that yielded a total of 326 pounds of cannabis and 895 plants. State law allows caregivers to possess up to six mature plants per registered patient.
Investigators also found notebooks that appeared to indicate transactions involving parties in Maryland, New York, and Georgia, implying trading across state lines.
The federal rider’s stipulation against interfering with a state’s medical cannabis law is not contingent on a strict interpretation of state regulation, ruled Kayatta.
“If Congress had intended the rider to serve as a bar to spending federal funds on a prosecution only when the defendant was in strict compliance with state law, it would have been very easy for Congress to so state,” he wrote. “The potential for technical noncompliance is real enough that no person through any reasonable effort could always assure strict compliance. For instance, a caregiver whose twelve nonflowering marijuana plants comported with the Act’s limit immediately would have fallen out of compliance when just one of the caregiver’s unlimited number of seedlings grew beyond twelve inches in height or diameter.”
The Appellate Judge also argued that a strict view of federal oversight to Maine’s medical cannabis program would unreasonably burden the industry’s operators, hindering access to the market from all but the wealthiest applicants.
“With federal prosecution hanging as a sword of Damocles, ready to drop on account of any noncompliance with Maine law, many potential participants in Maine’s medical marijuana market would fasten fearful attention on that threat,” wrote Kayatta.
That said, Kayatta also argued that it would be foolish for caregivers to assume that so long as the state does not crack down, that they have nothing to worry about from federal regulators.
“Although we reject the government’s proposed strict compliance approach, we also decline to adopt the defendants’ interpretations of the rider,” wrote Kayatta “The record is clear that the posted patient cards and licenses, as well as the outward physical appearances of the grows, were facades for selling marijuana to unauthorized users.”
Circuit Judge David Barron, in a concurring agreement, argued that there was potential for this ruling to be altered, based on the fact that it was partially based on a 2020 Ninth U.S. Circuit Court ruling from California confirming that the DOJ’s waiver was not based on a strict assessment of compliance to state law. The Ninth Circuit case involved California cannabis operators that were not licensed medical providers, so that distinction could complicate future rulings on this issue.
“The Ninth Circuit applied the standard bearing the ‘strict compliance’ name in cases that involved a very different factual context from this one,” wrote Barron. “None of the defendants in those cases had shown that they held a state-provided license to sell or use medical marijuana at the time of their federal prosecutions.”