Federal ban on marijuana means Michigan cannabis company can’t sue state agency, judge rules

Since marijuana is illegal on the federal level, cannabis companies have no right to constitutional protections, a U.S. District Court judge ruled. Credit: Shutterstock

A Michigan marijuana testing lab that sued state regulators over a massive cannabis recall in November 2021 has no legal standing in its lawsuit because the company is an illegal entity on the federal level, a U.S. district judge has ruled.

Viridis Laboratories claimed in a lawsuit that the Michigan Cannabis Regulatory Agency (CRA) recall of nearly $230 million worth of marijuana was “unjustified, prejudiced, and retaliatory.” The company alleged that the CRA violated Viridis Laboratories’ right to due process by seizing the marijuana without an opportunity to challenge the allegations in court.

U.S. District Judge Paul L. Maloney said the claims are moot because Viridis Laboratories is dealing in “illegal contraband” on the federal level and therefore the company is not protected by the constitution. Maloney dismissed the case on July 31.

“While the state of Michigan may recognize and protect these interests, federal law does not,” U.S. Magistrate Judge Phillip J. Green wrote in recommending the dismissal.

He added, “While there may exist a general right to engage in the profession of one’s choice, the court cannot simply ignore the fact that (Viridis Laboratories’) profession centers on a product which the United States has outlawed.”

Although 23 states have legalized the use of recreational marijuana, cannabis is classified on the federal level as a Schedule 1 narcotic under the Controlled Substances Act, which means it has no accepted medical use. Currently, it’s considered on par with drugs like heroin and LSD in the eyes of the federal government.

Federal lawmakers have introduced bills to end federal prohibition by descheduling marijuana, but the legislation is shelved every year because there’s not enough support.

In October 2022, President Joe Biden directed an administrative review of federal cannabis scheduling. But advocates emphasize that the answer is not simply reclassifying cannabis as a Schedule 2 or 3 narcotic because it would still be illegal for recreational use.

“Our Supreme Court has held that the (Controlled Substance Act) designates marijuana as contraband for any purpose,” Maloney wrote. “And the Controlled Substances Act states ‘all controlled substances which have been manufactured, distributed, dispensed, or acquired in violation of this subchapter’ are subject to forfeiture to the United States and no property right shall exist in them.”

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