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By Peter Blake
So a district judge in Arapahoe County has refused to enforce a sales contract between a marijuana grower and a dispensary on grounds that pot deals violate federal law and contravene public policy.
If you’re the grower, what do you do now? Appeal in hopes of getting a reversal and your $40,000?
Or do you let it go because if the decision is upheld in the intermediate Court of Appeals and/or the Colorado Supreme Court, it becomes a statewide precedent that could cripple the state’s medical-marijuana industry?
As it stands now, the decision has no force of law beyond the court in which it was issued.
In making his decision, District Judge Charles Pratt seemed to be following in the footsteps of U.S. Chief Justice John Roberts. That is, he decided a tricky case by invoking a legal doctrine that had been barely touched on during arguments by either side.
Roberts saved Obamacare — and surprised the nation — by ruling that the punishment for not buying mandatory health insurance amounted to a tax (well within congressional powers) and not an unconstitutional penalty on economic inactivity.
Federal law wasn’t mentioned during testimony in the marijuana case. The attorney for plaintiff Quincy Haeberle, the grower, said it was first raised during closing arguments in April by the lawyer for defendants Laura Lowden and Blue Sky Care Connection. (Haeberle’s attorney asked not to be identified since he doesn’t want other clients to think he’s a “pot lawyer.”)
Blue Sky attorney Ronald Taylor denied citing federal law at that time, only state cases that suggested the contract violated public policy.
In any case, Pratt, on his own motion, asked both sides in May to write briefs on whether a marijuana contract is void because it violates federal law.
In his ruling earlier this month, Pratt wrote that although the contract existed and was violated by the defendants, it couldn’t be enforced. “Under the law’s current state, the sale and use of marijuana, even for medical purposes, remains against the public policy of the United States.”
Haeberle’s attorney said this week no notice of appeal has been filed. And even if one is, he’s not likely to stay with the case. Apart from the legal risks, he said, the defendant’s business has “ceased to exist,” and there would be no money to collect. (Blue Sky’s Taylor said the business is still viable.)
Apparently some other marijuana interests are “looking hard at whether this case is worth throwing industry money behind,” said Haeberle’s attorney.
There was “panic” in the industry right after the ruling, he continued, but people have “calmed down” and some have realized that an appeal could “blow up in their face” if Pratt’s decision is upheld.
As for Colorado Attorney General John Suthers, he’s watching the Haeberle case but not getting involved because it involves two private parties, said spokeswoman Carolyn Tyler.
He wouldn’t intervene unless an appeal somehow challenged the “legal framework” of the state’s medical marijuana industry, she said.
But which side would he support? Suthers stands strong for states’ rights in many issues, having joined the multi-state lawsuit against Obamacare, and defended the Taxpayer’s Bill of Rights against a suit that claims it violates the U.S. Constitution.
But he’s “a little schizophrenic on the state vs. federal thing” when it comes to marijuana, said Brian Vicente, a supporter of Amendment 64 on the fall ballot. That proposal would legalize marijuana use, eliminate the need for a medical excuse and regulate it like liquor.
Vicente is right. Suthers is a strong opponent of illegal drug use. And observers would be surprised if he backed the state against Washington.
Meanwhile, U.S. Attorney John Walsh of Colorado continues his crackdown on medical marijuana centers. This month he sent 10 more letters to dispensaries telling them they’re within 1,000 feet of schools and they’ll be prosecuted if they don’t move. It’s the third round of letters he’s sent this year. Presumably it’s done with the permission if not encouragement of the Obama Administration, which despite its drug war manages to maintain a liberal image, floating untouched above the smoke on the ground.
Passage of Amendment 64 would further heighten the tension between the state and federal government.
Meanwhile, the marijuana industry will have to figure out a way to do business without the risk of having contracts invalidated by judges. That means making credit deals only with people you fully trust — or demanding cash on the barrelhead from people you don’t.
Tags: Amendment 64, Blue Sky Care Connection, Colorado, federal, Judge Charles Pratt, medical marijuana, Quincy Haeberle, Ronald Taylor, state
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