Cite as: 594 U. S. ____ (2021) 1 Statement of THOMAS, J. SUPREME COURT OF THE UNITED STATES STANDING AKIMBO, LLC, ET AL., v. UNITED STATES ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT No. 20–645. Decided June 28, 2021
Sixteen years ago, this Court held that Congress’ power to regulate interstate commerce authorized it “to prohibit the local cultivation and use of marijuana.” Gonzales v. Raich, 545 U. S. 1, 5 (2005). The reason, the Court explained, was that Congress had “enacted comprehensive legislation to regulate the interstate market in a fungible commodity” and that “exemption[s]” for local use could undermine this “comprehensive” regime. Id., at 22–29. The Court stressed that Congress had decided “to prohibit entirely the possession or use of [marijuana]” and had “designate[d] marijuana as contraband for any purpose.” Id., at 24–27 (first emphasis added). Prohibiting any intrastate use was thus, according to the Court, “‘necessary and proper’” to avoid a “gaping hole” in Congress’ “closed regulatory system.” Id., at 13, 22 (citing U. S. Const., Art. I, §8).
Whatever the merits of Raich when it was decided, federal policies of the past 16 years have greatly undermined its reasoning. Once comprehensive, the Federal Government’s current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana. This contradictory and unstable state of affairs strains basic principles of federalism and conceals traps for the unwary
Thomas notes that the federal government outlaws marijuana even though 36 states have legalized it for medical use and 18 allow recreational use.
Yet, as petitioners recently discovered, legality understate law and the absence of federal criminal enforcement
do not ensure equal treatment. At issue here is a provision
of the Tax Code that allows most businesses to calculate
their taxable income by subtracting from their gross revenue the cost of goods sold and other ordinary and necessary
business expenses, such as rent and employee salaries. See
26 U. S. C. §162(a); 26 CFR. 1.61–3(a) (2020). But because
of a public-policy provision in the Tax Code, companies that
deal in controlled substances prohibited by federal law may
subtract only the cost of goods sold, not the other ordinary
and necessary business expenses. See 26 U. S. C. §280E.
Under this rule, a business that is still in the red after it
pays its workers and keeps the lights on might nonetheless
owe substantial federal income tax.
...
This disjuncture between the Government’s recent laissez-faire policies on marijuana and the actual operation of
specific laws is not limited to the tax context. Many marijuana-related businesses operate entirely in cash because
federal law prohibits certain financial institutions from
knowingly accepting deposits from or providing other bank
services to businesses that violate federal law. Black & Galeazzi, Cannabis Banking: Proceed With Caution, American
Bar Assn., Feb. 6, 2020. Cash-based operations are understandably enticing to burglars and robbers. But, if marijuana-related businesses, in recognition of this, hire armed
guards for protection, the owners and the guards might run
afoul of a federal law that imposes harsh penalties for using
a firearm in furtherance of a “drug trafficking crime.” 18
U. S. C. §924(c)(1)(A). A marijuana user similarly can find
himself a federal felon if he just possesses a firearm.
§922(g)(3). Or petitioners and similar businesses may find
themselves on the wrong side of a civil suit under the Racketeer Influenced and Corrupt Organizations Act. See, e.g.,
Safe Streets Alliance v. Hickenlooper, 859 F. 3d 865, 876–
877 (CA10 2017) (permitting such a suit to proceed).