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Iowa Officials Urged Not to Permit Importation of CBD from Minnesota

Posted by on Tuesday, September 12, 2017 in News, Updates.

The Iowa Attorney General’s office just advised the state health department not to authorize two Minnesota medical marijuana dispensaries to supply medical marijuana to Iowa residents.

If heeded, the advice would nullify a novel provision of Iowa’s nascent medical marijuana program. The provision, adopted as part of a package of reforms in May 2017, calls upon the state department of health to license by December 31, 2017, two already operational Minnesota companies to distribute Cannabdiol (CBD) to qualified Iowa patients. (The May 2017 statute can be found here. The relevant provision is Section 124E.13.)

The provision was adopted to shorten the time it would take for Iowa patients to obtain CBD (legally). Even after a state adopts a medical marijuana law, patients must wait a long time – by my estimate, 18-24 months is typical – before they can actually obtain the drug from in-state commercial suppliers. It takes that long for state officials to draft regulations and to solicit and review license applications from prospective suppliers, and then, for successful licensees to cultivate, harvest, and process their first crop.

The adoption of the provision was also surprising, because it grants an economic opportunity to out-of-state firms. Most states have zealously guarded their marijuana markets from out-of-state competition, even when such protectionism comes at the expense of in-state patients.

But some critics warned that shipping marijuana across state lines would trigger a federal crackdown on the medical marijuana industry. Perhaps most notably, John Hudak of the Brookings Institution suggested here that, “The idea that the Sessions Justice Department would allow this is absolute lunacy. And because of that, this is a truly terrible idea . . .  The last thing the marijuana industry wants is to rock the boat in a way that would irritate Jeff Sessions.”

It appears the Iowa Attorney General’s (IAG) office was motivated by such reasoning. The Des Moines Register reports that the IAG advised Iowa officials not to license Minnesota companies to supply CBD to Iowa patients. I could not find an official AG opinion on the matter, but the linked news report provides this explanation for the move:

Geoff Greenwood, a spokesman for the attorney general’s office, said in an email that if a state program authorizes or encourages diversion from one state to another, “it is possible that state’s program may come under increased scrutiny from the federal government.” He said the halt on implementation should remain “until the federal government provides further guidance regarding state medical marijuana programs.”

I think the IAG made a mistake in backing down. The chances that licensing two Minnesota firms to supply CBD to Iowa residents will trigger a federal crackdown on medical marijuana are grossly exaggerated, for two reasons.

First, regardless of what the DOJ thinks about inter-state shipments of marijuana, the Rohrabacher Farr Amendment (discussed in the book on pages 353-358) would likely prevent the DOJ from taking any legal action to block Iowa’s plan. As interpreted by the court in United States v. McIntosh (page 353-356), the Amendment shields any action taken pursuant to a state medical marijuana law. So as long as the Minnesota firms comply with Iowa (and Minnesota) law when they distribute CBD to Iowa residents, I think they would be entitled to the protections of the Amendment.

Second, in any event, it is hard to imagine the United States Attorney General, Jeff Sessions, caring much about Iowa’s plan. As I have explained elsewhere, AG Sessions has taken a softer tone toward medical marijuana than he has toward recreational marijuana – and he might be even less concerned about low-THC medical marijuana (Iowa allows only 3 percent THC concentration) than medical marijuana more generally. What is more, what Iowa has proposed seems rather tame in comparison to what some other medical marijuana states are now doing – e.g., forcing private employers to accommodate medical marijuana users or even to pay for medical marijuana of injured workers.

To be sure, AG Sessions may ultimately decide to crack down on medical marijuana, but I just can’t see Iowa’s move – authorizing 2 Minnesota dispensaries to sell low THC marijuana to Iowa residents – as being a catalyst (let alone, the catalyst) for such an action.

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