Untitled California Attorney General Opinion ( 2023 )

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
ROB BONTA
Attorney General
_______________
:
OPINION :
: No. 23-103
of :
: December 19, 2023
ROB BONTA :
Attorney General :
:
KARIM J. KENTFIELD :
Deputy Attorney General :
The HONORABLE NICOLE ELLIOTT, DIRECTOR OF THE DEPARTMENT
OF CANNABIS CONTROL, has requested an opinion on a question relating to interstate
commercial cannabis activity.
QUESTION PRESENTED AND CONCLUSION
Could state-law authorization, under an agreement pursuant to Chapter 25 of
Division 10 of the Business and Professions Code, for medicinal or adult-use commercial
cannabis activity, or both, between out-of-state licensees and California licensees “result
in significant legal risk to the State of California under the federal Controlled Substances
Act” within the meaning of Business and Professions Code section 26308(a)(4)?
Yes. State-law authorization for commercial cannabis activity between out-of-
state licensees and California licensees could “result in significant legal risk to the State
of California under the federal Controlled Substances Act” within the meaning of section
26308(a)(4) due to the risks of federal preemption of state law and criminal prosecution
of state employees. Courts have disagreed about the scope of federal preemption in the
cannabis context, and no court has ever considered a preemption challenge to a state law
authorizing interstate cannabis sales. The law is also unsettled as to whether state
officials could be federally prosecuted for implementing state law in this area.
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BACKGROUND
“California has been a pioneer” in the regulation of cannabis. 1 For most of the
twentieth century, California law prohibited cannabis distribution and possession. 2 In
1996, however, California became the first State to eliminate criminal liability for
medical cannabis use under state law. 3 In that year, the voters approved Proposition 215,
which authorized qualifying patients and their caregivers to possess or cultivate cannabis
for a patient’s personal medical use with the recommendation of a physician. 4 California
voters further liberalized the State’s cannabis laws in 2016 by enacting Proposition 64,
which legalized recreational cannabis use by adults. 5 The initiative also authorized the
State to regulate the cultivation, processing, distribution, and sale of cannabis for
commercial purposes. 6
Implementing these initiatives, the Legislature has created a comprehensive
framework to regulate cannabis cultivation, distribution, manufacture, sale, and use
within the State. 7 The Business and Professions Code contains detailed rules governing
all aspects of the cannabis lifecycle, including business licensing; cultivation; standards
for manufacturing, packaging, and labeling; testing and quality assurance requirements;
1
Gonzales v. Raich (2005) 545 U.S. 1, 5. In 2017, the Legislature replaced all references
to “marijuana” in the Health and Safety Code with the term “cannabis.” (See People v.
Raybon (2021) 11 Cal.5th 1056, 1059, fn. 1, citing Stats. 2017, ch. 27, §§ 113-160.) We
will follow suit and use the term “cannabis” in this opinion, except when quoting sources
that use different terminology.
2
Gonzales v. Raich, supra, 545 U.S. at p. 5.
3
See People v. Kelly (2010) 47 Cal.4th 1008, 1012-1013; Gonzales v. Raich, supra,545 U.S. at p. 5.
4
See Health & Saf. Code, § 11362.5; 86 Ops.Cal.Atty.Gen. 180 (2003);
88 Ops.Cal.Atty.Gen. 113 (2005).
5
See Health & Saf. Code, § 11362.1; People v. Boatwright (2019) 36 Cal.App.5th 848,
853.
6
See Bus. & Prof. Code, § 26000; Voter Information Guide, Gen. Elec. (Nov. 8, 2016)
text of Prop. 64, § 3, p. 179. Today, 38 States, three territories, and the District of
Columbia have legalized cannabis for medical purposes; 24 States, two territories, and
the District of Columbia have legalized cannabis for recreational use. (See National
Conference of State Legislatures, State Medical Cannabis Laws, https://www.ncsl.org/he
alth/state-medical-cannabis-laws (as of Dec. 19, 2023).)
7
See Bus. & Prof. Code, § 26000 et seq. (the Medicinal and Adult-Use Cannabis
Regulation and Safety Act).
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delivery rules; restrictions on advertising and marketing; regulations of retail sales and
distribution; and prohibitions on cannabis sales to minors. 8 To administer these rules, the
Legislature created the Department of Cannabis Control, which has promulgated
implementing regulations. 9 Cannabis commerce is taxed by the State, with proceeds
funding regulatory enforcement. 10 Tax proceeds also finance myriad cannabis-related
research and safety initiatives concerning substance abuse, youth education, highway
safety, community development, and environmental remediation, among other issues. 11
Cannabis cultivation, distribution, or possession that does not comply with state rules and
regulations remains prohibited by California law. 12
While California and many other States have legalized cannabis under state law,
cannabis production, distribution, and possession remain illegal under the federal
Controlled Substances Act (CSA). 13 “Enacted in 1970 with the main objectives of
combating drug abuse and controlling the legitimate and illegitimate traffic in controlled
substances,” the CSA “criminaliz[es] the unauthorized manufacture, distribution,
dispensing, and possession of [controlled] substances.” 14 The statute categorizes drugs
into five schedules, grouping them based on their perceived risks and benefits. 15
Cannabis is classified as a Schedule I controlled substance, subjecting it to the most
severe restrictions on access and use. 16 As a result, it is a federal crime to manufacture,
8
See Bus. & Prof. Code, §§ 26050-26059 (licensing), §§ 26060-26066.2 (cultivation),
§§ 26130-26131 (manufacturing, packaging, and labeling), § 26110 (quality assurance
and testing), § 26090 (deliveries), §§ 26150-26156 (advertising and marketing),
§§ 26070-26071 (retailers and distributors), § 26140 (sales to minors).
9
See Bus. & Prof. Code, §§ 26010, 26013; Cal. Code Regs., tit. 4, § 15000 et seq.
10
See Rev. & Tax Code, § 34010 et seq.; Rev. & Tax Code, § 34019; California
Department of Tax and Fee Administration, Tax Guide for Cannabis Businesses,
https://www.cdtfa.ca.gov/industry/cannabis.htm (as of Dec. 19, 2023).
11
See Rev. & Tax Code, § 34019.
12
See Health & Saf. Code, §§ 11357-11361; People v. Boatwright, supra, 36 Cal.App.5th
at p. 853.
13
See 21 U.S.C. § 801 et seq.
14
Gonzales v. Oregon (2006) 546 U.S. 243, 250. Before the CSA’s enactment, federal
law “did not outlaw the possession or sale” of cannabis. (Gonzales v. Raich, supra, 545
U.S. at p. 11.) But it “practically curtailed” cannabis activities by imposing
“prohibitively expensive taxes” and “onerous administrative requirements.” (Ibid.)
15
See 21 U.S.C. § 812.
16
See Gonzales v. Raich, supra, 545 U.S. at pp. 14-15. The CSA defines Schedule I
substances as having “a high potential for abuse,” “no currently accepted medical use in
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distribute, or possess cannabis in almost all circumstances. 17 The statute contains no
exception for medical use or for activity authorized by state law. 18
Although cannabis possession and distribution remain illegal under federal law,
federal enforcement has declined in States, like California, that have legalized cannabis
use. Beginning in 2009, the United States Department of Justice issued a series of
memoranda stating that it would not be a departmental priority to prosecute cannabis
activity that complied with state law. 19 While the memoranda were revoked in 2018,
courts and commentators have observed that the Department continues to “show[] little
interest . . . in using federal resources to enforce” the CSA against state-authorized
conduct. 20 Moreover, for every fiscal year since 2015, Congress has passed an annual
treatment,” and “a lack of accepted safety for use . . . under medical supervision.”
(21 U.S.C. § 812, subd. (b)(1)(A)-(C).) Congress placed cannabis on Schedule I when it
enacted the CSA. (See Gonzales v. Raich, supra, 545 U.S. at p. 14.) Although the statute
“provides for the periodic updating of schedules,” previous “efforts to reschedule”
cannabis have been unsuccessful. (Id. at pp. 14-15.) On August 29, 2023, the U.S.
Department of Health and Human Services recommended for the first time that cannabis
should be rescheduled to Schedule III. (See Congressional Research Service, Department
of Health and Human Services Recommendation to Reschedule Marijuana: Implications
for Federal Policy (Sept. 13, 2023), https://crsreports.congress.gov/product/pdf/IN/IN122
40 (as of Dec. 19, 2023)). Because rescheduling would also require approval from the
U.S. Drug Enforcement Administration, cannabis currently remains classified on
Schedule I. (See ibid.)
17
See 21 U.S.C. §§ 841, subd. (a)(1), 844, subd. (a); 97 Ops.Cal.Atty.Gen. 21, 23 (2014).
The statute contains a narrow exception for federally approved research studies. (See
Gonzales v. Raich, supra, 545 U.S. at p. 14.)
18
See United States v. Oakland Cannabis Buyers’ Co-op. (2001) 532 U.S. 483, 486.
19
E.g., Memorandum For Selected United States Attorneys from David W. Ogden,
Deputy Att’y Gen., Investigations and Prosecutions in States Authorizing the Medical
Use of Marijuana (Oct. 19, 2009); Memorandum For All United States Attorneys from
James M. Cole, Deputy Att’y Gen., Guidance Regarding Marijuana Enforcement (Aug.
29, 2013) (Cole Memorandum). For States that had implemented “strong and effective
regulatory and enforcement systems,” the memoranda directed that “the primary means
of addressing” cannabis-related activity should be state-law enforcement. (Cole
Memorandum, at p. 3.)
20
In re State Question No. 807, Initiative Petition No. 423 (Okla. 2020) 468 P.3d 383,
392, fn. 5; see Mikos, The Evolving Federal Response to State Marijuana Reforms (2020)
26 Widener L. Rev. 1, 10 (revocation of the memoranda “did not actually change federal
enforcement practices”).
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appropriations rider that prohibits the Department of Justice from using appropriated
funds to “prevent [States] from implementing their own laws that authorize the use,
distribution, possession, or cultivation of medical marijuana.” 21 Federal appellate courts
have construed the rider not only to bar the Department from suing States directly, but
also to prohibit federal prosecution of activities carried out in compliance with state
medical cannabis laws. 22
Against the backdrop of federal prohibition, California has taken an incremental
approach to legalizing cannabis under state law. Relevant here, while California has
authorized intrastate cannabis activity, it has continued to prohibit cannabis exports to
other States. 23 California’s export ban has been motivated, in part, by a concern that
authorizing shipments across state lines could attract heightened federal interest in
enforcing the CSA. 24 Other States have imposed similar export bans as well. 25 As a
result, California companies cannot currently engage in interstate cannabis commerce
without violating state law.
Recent legislation could change that. Senate Bill 1326—enacted September 18,
2022, and effective January 1, 2023—empowers the Governor to enter into interstate
cannabis agreements with other States. 26 Such agreements could authorize “medicinal or
adult-use commercial cannabis activity, or both, between entities licensed under the laws
of” the two States. 27 If an interstate agreement were put in place, California-licensed
21
Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, § 531 (Dec. 29, 2022)
136 Stat. 4459, 4561 effective through Sept. 30, 2023; see Continuing Appropriations
Act, 2024 and Other Extensions Act, Pub. L. No. 118-15, § 104 (Sept. 30, 2023) 137 Stat.
71, 74, effective through Nov. 17, 2023; Further Continuing Appropriations and Other
Extensions Act, 2024, Pub. L. No. 118-22, § 101 (Nov. 17, 2023) 137 Stat. 112, generally
effective through Feb. 2, 2024.
22
See United States v. McIntosh (9th Cir. 2016) 833 F.3d 1163, 1175-1179; United States
v. Bilodeau (1st Cir. 2022) 24 F.4th 705, 712-715.
23
See Bus. & Prof. Code, § 26080, subd. (a).
24
See Off. of Ass. Floor Analyses, 3d reading analysis of Sen. Bill No. 1326 (2021-2022
Reg. Sess.) Aug. 19, 2022, p. 3.
25
See Off. of Ass. Floor Analyses, 3d reading analysis of Sen. Bill No. 1326 (2021-2022
Reg. Sess.) Aug. 19, 2022, p. 3.
26
See Stats. 2022, ch. 396, §§ 1-5 (enacting Sen. Bill No. 1326), codified in relevant part
at Bus. & Prof. Code, Div. 10, Ch. 25, §§ 26300-26308.
27
Bus. & Prof. Code, § 26301, subd. (a). The statute refers to companies licensed by a
partner state as “foreign licensees.” (See Bus. & Prof. Code, § 26300, subd. (c).) Like
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businesses could engage in cannabis commerce with out-of-state licensees without
violating California law. 28
SB 1326 mandates that any such interstate agreement include a number of
conditions to ensure compliance with California’s comprehensive health and safety
standards. An agreement must require the partner State to ensure that cannabis products
imported into California “meet or exceed” California regulatory requirements, including:
“public health and safety standards”; participation in California’s “seed to sale” tracking
system; testing, quality assurance, and inspection standards; packaging and labeling
requirements; and marketing and advertising restrictions. 29 The partner State must agree
to regulate advertising, labeling, and sales of California cannabis products imported into
its State as well. 30 Partner States must also agree to “reasonably cooperate with
California investigations concerning” out-of-state licensees, including by investigating
allegations of regulatory noncompliance at California’s request. 31 To avoid conflict with
non-partner States, the agreement must prohibit transportation of cannabis products
“through the jurisdiction” of any State “that does not authorize that transportation.” 32
Agreements must also “provide for collection of all applicable taxes.” 33
Although SB 1326 took effect on January 1, 2023, the statute contains an
important limitation: It provides that no agreement between California and another State
to authorize interstate cannabis activity “shall . . . take effect unless” one of four
conditions is satisfied. 34 The first three conditions involve changes to federal law or
the requestor, we will refer to such companies as “out-of-state licensees” for clarity.
28
See Bus. & Prof. Code, § 26080, subd. (a) (prohibiting cannabis exports “[e]xcept as
provided in Chapter 25,” i.e., the chapter added by SB 1326), § 26301, subd. (a),
§ 26302, subd. (a). Two other States that have legalized cannabis—Oregon and
Washington—have enacted similar legislation authorizing their Governors to negotiate
interstate cannabis agreements. Neither State’s law will take effect, however, unless
federal law or policy is changed to allow interstate cannabis distribution between state-
licensed businesses. (See An Act Relating to Interstate Cannabis Agreements, 2023
Wash. Sess. Laws. Ch. 264, § 2; An Act Relating to Cannabis, 2019 Or. Laws Ch. 464,
§ 3.)
29
Bus. & Prof. Code, § 26303, subd. (a)(1)-(7).
30
Bus. & Prof. Code, § 26303, subd. (b).
31
Bus. & Prof. Code, § 26304, subd. (b).
32
Bus. & Prof. Code, § 26301, subd. (a)(2)(B).
33
Bus. & Prof. Code, § 26306.
34
Bus. & Prof. Code, § 26308, subd. (a).
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federal policy. 35 The fourth condition, under Business and Professions Code section
26308(a)(4), is that the California Attorney General issues a qualifying “written opinion,
through the process established pursuant to Section 12519 of the Government Code.” 36
The opinion must conclude that “state law authorization, under an agreement pursuant to
this chapter, for medicinal or adult-use commercial cannabis activity, or both, between
foreign licensees and state licensees will not result in significant legal risk to the State of
California under the federal Controlled Substances Act.” 37 The opinion must be “based
on review of applicable law, including federal judicial decisions and administrative
actions.” 38
The Department of Cannabis Control submitted this opinion request to obtain a
legal opinion that would satisfy section 26308(a)(4)—and thereby enable the Governor to
begin entering into interstate agreements. 39 Mirroring the statutory language, the request
asks whether state-law authorization of interstate commercial cannabis activities between
licensed cannabis businesses could “result in significant legal risk to the State of
California under the federal Controlled Substances Act.” 40 The requestor included a legal
analysis explaining why, in its view, it would not. For the reasons that follow, we cannot
agree.
SUMMARY
The question presented here—whether state-law authorization of interstate
cannabis activities could result in significant legal risk to the State—is atypical for an
opinion request under Government Code section 12519. Our charge under section 12519
35
The first two conditions are (i) that federal law “is amended to allow for the interstate
transfer of cannabis or cannabis products between authorized commercial cannabis
businesses” or (ii) that federal law is enacted to “specifically prohibit[] the expenditure of
federal funds to prevent” such activities. (Bus. & Prof. Code, § 26308, subd. (a)(1)-(2).)
The third condition is that the U.S. Department of Justice “issues an opinion or
memorandum allowing or tolerating” interstate cannabis distribution. (Bus. & Prof.
Code, § 26308, subd. (a)(3).)
36
Bus. & Prof. Code, § 26308, subd. (a)(4). Government Code section 12519 authorizes
enumerated state and local officials to request the Attorney General’s written opinion
“upon any question of law relating to their respective offices.”
37
Bus. & Prof. Code, § 26308, subd. (a)(4).
38
Bus. & Prof. Code, § 26308, subd. (a)(4).
See Department of Cannabis Control, letter to former Senior Assistant Attorney
39
General Mollie Lee, Jan. 27, 2023 (Request for Opinion).
40
Request for Opinion, at p. 1; see Bus. & Prof. Code, § 26308, subd. (a)(4).
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is limited to addressing “question[s] of law.” 41 But an assessment of “legal risk” may
turn on various non-legal considerations—such as the likelihood that a future federal
administration would sue the State, or the likelihood that a future Congress would
appropriate funds to support such a suit. For this reason, we would ordinarily decline to
analyze the degree of legal risk resulting from a proposed course of action. In this case,
however, the Legislature has enacted a statute—Business and Professions Code section
26308(a)(4)—that not only invites the Attorney General to assess the State’s “legal risk,”
but also gives that assessment binding legal effect. In this highly unusual circumstance,
we will endeavor to answer the question presented. But mindful of our statutory charge
to analyze only questions of law, we will limit our analysis to the legal issues embedded
in the question.
We begin by considering what types of adverse outcomes are relevant to the
“legal risk” inquiry. Applying ordinary tools of statutory construction, we construe the
phrase “legal risk to the State of California under the federal Controlled Substances Act”
in section 26308(a)(4) to refer to the possibility of the State bearing a loss, injury, or
other adverse circumstance that is founded on the CSA. In our view, one such
circumstance would be if the CSA were deemed to preempt SB 1326—i.e., if a court
declared California’s law without effect under the Supremacy Clause of the United States
Constitution. Preemption of SB 1326 would prevent California from carrying out its
preferred policy of authorizing and carefully regulating interstate cannabis activities.
And the State could be a defendant in a preemption suit, forced to appear in court and
expend resources defending its laws. If a court held SB 1326 preempted, the State could
also be ordered to pay the plaintiff’s attorneys’ fees.
Although there are strong arguments against preemption here, the arguments in
favor of preemption are sufficiently plausible that we cannot conclude that the legal risk
is insignificant. On the one hand, most courts have held that the CSA does not preempt
state laws authorizing and regulating intrastate cannabis activities. Consistent with those
authorities, a court could reasonably conclude that California’s authorization of interstate
activities would not be preempted either. Under the federal Constitution, Congress
cannot compel California to maintain its existing state-law prohibition on interstate
commercial cannabis sales. And California’s health and safety regulation of cannabis
imports and exports would arguably advance, not hinder, the objectives underlying
federal law by minimizing the worst harms associated with cannabis trafficking. On the
other hand, some courts and dissenting judges have concluded that state laws authorizing
intrastate cannabis activities are preempted because they stand as an obstacle to the
CSA’s objective of eliminating all cannabis distribution and use. In light of those
41
Gov. Code, § 12519; see also 62 Ops.Cal.Atty.Gen. 150, 163 (1979) (“The function of
this office is not to resolve factual disputes, or disputes as to conflicting inferences which
may arise from such facts, but to render opinions on legal questions”);
105 Ops.Cal.Atty.Gen. 39, 39 (2022).
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authorities, we cannot conclude that the likelihood of a court holding SB 1326 preempted
is so low as to be insignificant—especially since no court has ever considered preemption
in the context of interstate sales. And while there may be reasons to believe that
preemption litigation would be unlikely to arise in practice, we are not in a position to
make political or economic predictions about whether the United States or another party
would be likely to sue.
Finally, we analyze an additional risk: that state officials who implement SB 1326
could be federally prosecuted for violating the Controlled Substances Act. The requestor
believes that such a prosecution is unlikely, both because state officials would not satisfy
the elements of a CSA violation and because officials would be shielded from liability by
the CSA’s immunity provision. We agree that state officials would have strong
arguments that they cannot be held criminally liable for carrying out their official duties.
We acknowledge, however, that some state and federal authorities could support a theory
of liability in these circumstances. We therefore conclude that the possibility of state
employees facing criminal prosecution further increases the State’s legal risk here—
reinforcing our conclusion that state-law authorization for commercial cannabis activity
between out-of-state licensees and California licensees could “result in significant legal
risk to the State of California under the federal Controlled Substances Act” within the
meaning of section 26308(a)(4).
ANALYSIS
What is the scope of the opinion request?
We begin by considering an important threshold question: what does Business
and Professions Code section 26308(a)(4) mean by a “significant legal risk to the State of
California under the federal Controlled Substances Act”? The statute itself does not
define the relevant terms. Applying the ordinary tools of statutory interpretation, we
therefore look to dictionary definitions. 42
As relevant here, “risk” is defined as “the possibility of loss, injury, or other
adverse or unwelcome circumstance.” 43 The adjective “legal” means “founded on or
deriving authority from law.” 44 The relevant law here is the federal Controlled
Substances Act. And the only legal risk we are concerned with is risk “to the State of
42
See Brennon B. v. Superior Ct. (2022) 13 Cal.5th 662, 673 (the “fundamental task” in
statutory interpretation “is to determine the Legislature’s intent so as to effectuate the
law’s purpose” by examining the statutory language and “giving it a plain and
commonsense meaning”); id. at p. 674 (looking to dictionary definitions).
43
Oxford English Dict. (updated through Dec. 2023) [“risk”].
44
Oxford English Dict. (updated through Dec. 2023) [“legal”].
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California.” Putting this all together, the phrase “legal risk to the State of California
under the federal Controlled Substances Act” refers to “the possibility of loss, injury, or
other adverse or unwelcome circumstance” borne by the State that is “founded on” the
CSA. 45
Applying this construction, we believe that relevant legal risks include the
possibility that California’s laws authorizing interstate cannabis activities could be
deemed preempted by the Controlled Substances Act—that is, declared “without effect”
under the Supremacy Clause. 46 In our view, such a result would constitute an “adverse or
unwelcome circumstance” for the State. 47 By invalidating California law in this area,
preemption would prevent the State from carrying out its preferred policy of authorizing
and carefully regulating interstate commercial cannabis activity. 48 If a court were to hold
that SB 1326 is preempted, the State would also suffer the “loss” of any resources it had
already expended implementing the statutory regime—costs that the Legislature expected
to be “significant.” 49 And the State could be haled into court and forced to expend
45
We note that several potential legal issues are beyond the scope of the question
presented. Because the question is limited to risk under the Controlled Substances Act,
we will not analyze other possible challenges to SB 1326—for example, whether the
Legislature’s authorization of cannabis exports could conflict with the 2016 voter
initiative that legalized only intrastate cannabis activity. (See Assem. Com. on Business
and Professions, Rep. on Sen. Bill No. 1326 (2021-2022 Reg. Sess.) as amended June 6,
2022, p. 9.) Also, given that we are concerned only with legal risk to the State, our
analysis does not turn on the potential federal criminal liability of private actors who
choose to engage in interstate commercial cannabis activities in accordance with state
law. And because the question asks only about liability from authorizing interstate
cannabis activities, we need not consider whether the State’s failure to authorize such
activities could prompt legal challenges—such as claims that the current ban on cannabis
exports runs afoul of the dormant Commerce Clause. (See, e.g., Ne. Patients Grp. v.
United Cannabis Patients & Caregivers of Maine (1st Cir. 2022) 45 F.4th 542 [applying
the dormant Commerce Clause to state cannabis laws].)
46
Mut. Pharm. Co. v. Bartlett (2013) 570 U.S. 472, 475. We need not resolve in this
opinion whether any other types of legal risk fall within the scope of section 26308(a)(4).
Our conclusion that preemption could pose a significant legal risk to the State is
sufficient to answer the question presented.
47
Oxford English Dict. (updated through Dec. 2023) [“risk”].
48
Cf. Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel., Barez (1982) 458 U.S. 592, 601
(noting a State’s “sovereign interest[]” in exercising “power over individuals and
entities” within its jurisdiction, including “the power to create and enforce a legal code”).
49
See Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No.
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further resources defending its laws. 50 If a court held SB 1326 preempted, the State could
also be required to pay the plaintiff’s attorneys’ fees. 51
The legislative history of SB 1326 further supports our conclusion that preemption
is a relevant risk. In the final legislative hearings, the senators presenting the bill stated
that the section 26308(a) conditions were included to minimize the possibility of “conflict
between the State of California and the federal government.” 52 Such a conflict could be
premised on preemption: the United States could sue California seeking to enjoin
enforcement of SB 1326 on the theory that it is preempted by the CSA. Indeed, the
United States has previously brought similar suits against the State in other contexts. 53
We acknowledge that the requestor would read the statute differently. In a
footnote in its request letter, the Department of Cannabis Control argues that the risk of
preemption is not a legal risk to the State itself because the mechanism by which
Congress preempts state laws is through “a federal law that regulates the conduct of
private actors, not the States.” 54 Here, for instance, the potential source of preemption—
1326 (2021-2022 Reg. Sess.) as amended Aug. 18, 2022, p. 8 (describing cost estimates
to implement the bill).
50
See McCormick, Legal Risk in the Financial Markets, at p. 21 (2d ed. 2010) (“Legal
risk . . . is commonly understood to relate to the risk of being sued or being the subject of
a claim or proceedings”); Arnott, Report On The International Bar Ass’n Symposium On
Legal Risk (2004) 4 J. Int’l Banking & Financ. Law 1 (legal risk includes “the risk for [an
entity] of having a legal claim . . . brought against it”).
51
See Code Civ. Proc., §§ 1021.5, 1028; Graham v. DaimlerChrysler Corp. (2004) 34
Cal.4th 553, as modified (Jan. 12, 2005); Maria P. v. Riles (1987) 43 Cal.3d 1281.
52
Sen. Floor, Hearing on Sen. Bill. No. 1326 (Aug. 25, 2022), Sen. Caballero, at 2:09:20
(statement of bill author that, under section 26308(a), “interstate cannabis agreements . . .
cannot go into effect until there is an appropriate assurance that the agreements will not
cause conflict between the State of California and the federal government”); see Assem.
Floor, Hearing on Sen. Bill. No. 1326 (Aug. 22, 2022), Sen. Berman, at 3:51:01 (similar);
see also, e.g., Kenna v. U.S. Dist. Ct. for C.D.Cal. (9th Cir. 2006) 435 F.3d 1011, 1015-
1016 (discerning legislative intent from uncontested floor statements of bill sponsors).
53
E.g., United States v. California (9th Cir. 2019) 921 F.3d 865, 886-888 (alleging
preemption of California law under the Immigration and Nationality Act). In addition, as
discussed below, preemption challenges to SB 1326 could potentially be raised by parties
other than the United States. For example, California counties have previously sued the
State alleging that the CSA preempts other state cannabis laws. (See Cnty. of San Diego
v. San Diego NORML (2008) 165 Cal.App.4th 798, 813-818.)
54
Request for Opinion, at p. 4, fn. 4, quoting Murphy v. Nat’l Collegiate Athletic Ass’n
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the Controlled Substances Act—regulates the conduct of private actors by prohibiting
them from distributing or possessing cannabis. But where a federal statute has
preemptive effect, the result is to “nullify” affected state statutes and regulations—
leaving them without legal effect. 55
A comment letter submitted by the California Cannabis Authority agrees with our
conclusion that preemption is a relevant risk. 56 That letter argues that the key legal risk
under Business and Professions Code section 26308(a)(4) is that “the federal government
will bring an action against the State of California challenging” SB 1326 on the ground
that it is “preempted by the CSA.” 57 The letter explains why, in the Authority’s view, the
State’s laws would not be preempted. 58 Like us, however, the Authority views
preemption as a cognizable form of “legal risk” for purposes of section 26308(a)(4). 59
Having identified CSA preemption as a relevant legal risk under section
26308(a)(4), we next consider how to determine if that risk is “significant.” As we have
(2018) 138 S.Ct. 1461, 1481. As discussed in more detail below, Congress lacks the
authority under the Constitution to directly command the States to enact (or refrain from
enacting) legislation. But where Congress regulates the conduct of private actors, it has
the power to preempt—i.e., invalidate—conflicting state laws under the Supremacy
Clause.
55
Nathan Kimmel, Inc. v. DowElanco (9th Cir. 2002) 275 F.3d 1199, 1203; see Mut.
Pharm. Co. v. Bartlett, supra, 570 U.S. at p. 475 (preemption leaves state laws “without
effect”).
56
See California Cannabis Authority, letter to Deputy Attorney General Karim J.
Kentfield, Apr. 4, 2023 (California Cannabis Authority Comment). The California
Cannabis Authority is “a Joint Powers Authority created by California Counties.” (Id. at
p. 1.) The Authority “assist[s] local governments in efficiently and effectively deploying
resources for commercial cannabis oversight and taxation,” while “promoting the
functioning of a legal cannabis marketplace.” (Ibid.)
57
California Cannabis Authority Comment, at pp. 2-3.
58
See California Cannabis Authority Comment, at pp. 4-6.
59
Another comment letter similarly argues that the Legislature’s “principal[] concern[]”
in including the section 26308(a) conditions was to avoid “legal action, by the federal
administration, against the State of California.” (Rural County Representatives of
California and California State Association of Counties, letter to Deputy Attorney
General Karim J. Kentfield, Mar. 28, 2023, at p. 5 (Rural County Representatives
Comment).) As explained above, a potential basis for such an action would be a claim
that the State’s laws are preempted by the CSA.
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concluded in other contexts, “significant” does not mean “more likely than not.” 60
Rather, the Oxford English Dictionary defines “significant” as “[s]ufficiently great or
important to be worthy of attention; noteworthy; consequential, influential.” 61 Reflecting
the term’s imprecision, other dictionaries offer alternative definitions, including “having
or likely to have influence or effect” 62; “deserving to be considered,” “important,”
“weighty” 63; and “[h]aving or likely to have a major effect,” “[f]airly large in amount or
quantity.” 64 Applying any of these definitions, we believe that the consequences of the
legal risk we have identified—preemption of state law—would be “significant.” 65
But what about the likelihood of preemption—i.e., is there a “significant”
probability that preemption litigation would arise and that a court would ultimately
conclude that SB 1326 is preempted? 66 As discussed above, we will analyze that
question by considering the underlying “question[s] of law.” 67 Specifically, we will
evaluate whether the legal arguments in favor of preemption are sufficiently plausible
that the risk of a court adopting them would be “significant.” Given that some courts
have determined that laws authorizing intrastate cannabis activities are preempted—and
no court has ever considered a law authorizing interstate sales—we conclude that the
legal risk is “significant.”
60
See 93 Ops.Cal.Atty.Gen. 104, 108 (2010) (a “significant” clash of loyalties in
Government Code section 1099(a)(2) is a “modest standard,” requiring a conflict that is
not “trivial” and is “more certain than mere chance”); 101 Ops.Cal.Atty.Gen. 81, 85-86
(2018).
61
Oxford English Dict. (updated through Sept. 2023) [“significant”].
62
Merriam-Webster’s Collegiate Dict. (11th ed. 2020) p. 1159 [“significant”].
63
Webster’s New Internat. Dict. (3d ed. 1976) p. 2116 [“significant”].
64
American Heritage Dict. (5th ed. 2016) p. 1630 [“significant”].
65
Moreover, to the extent there is meaningful variation among the definitions, we see no
basis to selectively adopt one or another. Rather, in keeping with the Legislature’s
cautious approach—authorizing interstate cannabis activities, as relevant here, only if the
Attorney General can rule out the possibility that “significant” legal risk would result—
we believe it is appropriate to issue an opinion of no “significant” risk only if we
conclude that the risk would not be significant under any conventional definition of the
term.
66
See International Organization for Standardization (2002), defn. 3.1.1 (defining “risk”
as the “combination of the probability of an event and its consequences”).
67
Gov. Code, § 12519.
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Is there a significant risk that a court would hold that the Controlled Substances
Act preempts California’s laws authorizing interstate cannabis activity?
The Supremacy Clause of the U.S. Constitution provides that “the Laws of the
United States . . . shall be the supreme Law of the Land,” “any Thing in the Constitution
or Laws of any State to the Contrary notwithstanding.” 68 Because “federal law is
supreme in case of a conflict with state law,” Congress may preempt state laws through
federal legislation, thereby leaving them without legal effect. 69 In evaluating preemption
claims, “the purpose of Congress is the ultimate touchstone.” 70
The U.S. Supreme Court has identified three types of preemption: express, field,
and conflict. 71 First, express preemption arises when Congress includes a preemption
provision in the statute that “define[s] explicitly the extent to which its enactments pre-
empt state law.” 72 Second, field preemption occurs when a “federal law occupies a
‘field’ of regulation so comprehensively that it has left no room for supplementary state
legislation.” 73 Third, conflict preemption arises when state law “actually conflicts with
federal law.” 74 A conflict can occur in two ways: either “where it is impossible for a
private party to comply with both state and federal requirements” (impossibility
68
U.S. Const., art. VI, cl. 2.
69
Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1479; see Mut. Pharm.
Co. v. Bartlett, supra, 570 U.S. at p. 475 (preemption leaves state laws “without effect”);
Oneok, Inc. v. Learjet, Inc. (2015) 575 U.S. 373, 376 (preemption “invalidate[s]” state
laws).
70
Wyeth v. Levine (2009) 555 U.S. 555, 565, quoting Medtronic, Inc. v. Lohr (1996) 518
U.S. 470, 485.
71
See Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1480.
72
English v. Gen. Elec. Co. (1990) 496 U.S. 72, 78; see, e.g., Morales v. Trans World
Airlines, Inc. (1992) 504 U.S. 374 (applying express preemption clause in the Airline
Deregulation Act of 1978).
73
Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1480, internal
quotation marks omitted; see also Hillsborough Cnty., Fla. v. Automated Med. Lab’ys,
Inc. (1985) 471 U.S. 707, 713 (Congress’s intent to occupy a legal field “may be inferred
where the scheme of federal regulation is sufficiently comprehensive to make reasonable
the inference that Congress left no room for supplementary state regulation” or “where
the field is one in which the federal interest is so dominant that the federal system will be
assumed to preclude enforcement of state laws on the same subject,” internal quotation
marks omitted).
74
English v. Gen. Elec. Co., supra, 496 U.S. at p. 79.
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preemption), or “where state law stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress” (obstacle preemption). 75
Preemption under the Controlled Substances Act
Congress expressly addressed the preemptive effect of the Controlled Substances
Act in section 903 of title 21 of the United States Code. As we have previously
explained, section 903 “allow[s] the states some freedom to continue the enforcement of
their own narcotic laws.” 76 Specifically, it provides that:
No provision of this subchapter shall be construed as indicating an intent on the part
of the Congress to occupy the field in which that provision operates, including
criminal penalties, to the exclusion of any State law on the same subject matter
which would otherwise be within the authority of the State, unless there is a positive
conflict between that provision of this subchapter and that State law so that the two
cannot consistently stand together. 77
As the California Court of Appeal has recognized, section 903 expressly “reject[s] . . .
field preemption of state laws concerning controlled substances.” 78 Instead, as the United
States Supreme Court has observed, the statute “explicitly contemplates a role for the
States in regulating controlled substances.” 79
As to what state laws are preempted, courts generally agree that the CSA
incorporates the first sub-type of conflict preemption, addressing situations where it is
impossible for a private party to comply with both state and federal law. 80 Courts
75
English v. Gen. Elec. Co., supra, 496 U.S. at p. 79, internal quotation marks omitted.
Given that conflict preemption has two sub-types—impossibility and obstacle—some
courts consider there to be “four species of federal preemption” in total. (Viva! Internat.
Voice for Animals v. Adidas Promotional Retail Operations, Inc. (2007) 41 Cal.4th 929,
935.)
76
54 Ops.Cal.Atty.Gen. 57, 61 (1971).
77
21 U.S.C. § 903.
78
Cnty. of San Diego v. San Diego NORML, supra, 165 Cal.App.4th at p. 819.
79
Gonzales v. Oregon, supra, 546 U.S. at p. 251; see also id. at p. 270 (the limited scope
of the CSA preemption clause “caution[s] against the conclusion that the CSA effectively
displaces the States’ general regulation of medical practice”).
80
See, e.g., Qualified Patients Assn. v. City of Anaheim (2010) 187 Cal.App.4th 734,
758-760; People v. Crouse (Colo. 2017) 388 P.3d 39, 42-43; Musta v. Mendota Heights
Dental Ctr. (Minn. 2021) 965 N.W.2d 312, 321-327.
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disagree, however, as to whether section 903 also incorporates the second sub-type of
conflict preemption, addressing circumstances where state law stands as an obstacle to
accomplishing the federal statute’s purposes and objectives. 81 One district division of the
California Court of Appeal, for instance, has reasoned that, by expressly limiting
preemption to a “positive conflict,” Congress intended state laws to be preempted on
impossibility preemption grounds alone. 82 Other courts—including another division
within the same district of the California Court of Appeal—have construed section 903
more expansively to incorporate obstacle preemption as well. 83 We need not weigh in on
this debate here. Given that many courts have concluded that section 903 incorporates
both sub-types of conflict preemption, there is a significant risk that a court considering a
preemption challenge to SB 1326 would reach the same conclusion. We will therefore
analyze both impossibility and obstacle preemption.
Impossibility preemption of SB 1326
We begin with impossibility preemption—a “demanding” standard to satisfy. 84
As described above, the doctrine applies only if “it is impossible for a private party to
comply with both state and federal requirements” in a given area. 85 So, where “federal
81
See Appeal of Panaggio (2021) 174 N.H. 89, 95-96 (“Some courts have ruled that,
given the language in Section 903, the CSA preempts a state law only under impossibility
preemption, and not under obstacle preemption. . . . Other courts have disagreed”).
82
See Cnty. of San Diego v. San Diego NORML, supra, 165 Cal.App.4th at p. 823 (“The
phrase ‘positive conflict,’ particularly as refined by the phrase that ‘the two [laws] cannot
consistently stand together,’ suggests that Congress did not intend to supplant all laws
posing some conceivable obstacle to the purposes of the CSA, but instead intended to
supplant only state laws that could not be adhered to without violating the CSA”); see
also Mikos, Preemption Under the Controlled Substances Act (2013) 16 J. Health Care L.
& Pol’y 5 (arguing that the CSA incorporates only impossibility preemption).
83
See, e.g., Qualified Patients Assn. v. City of Anaheim, supra, 187 Cal.App.4th at
pp. 760-763; Oregon Prescription Drug Monitoring Program v. U.S. Drug Enf’t Admin.
(9th Cir. 2017) 860 F.3d 1228, 1236; United States v. Zadeh (5th Cir. 2016) 820 F.3d
746, 751-752; Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus. (2010) 348 Or.
159, 176-178. Although the U.S. Supreme Court performed an obstacle-preemption
analysis under a federal statute with a similarly worded preemption clause, it is unclear
whether the Court construed the clause to incorporate obstacle preemption or simply
assumed, without deciding, that it did, before concluding that the state law at issue did
not, in any event, pose an obstacle to accomplishing the federal statute’s objectives. (See
Wyeth v. Levine, supra, 555 U.S. at pp. 573-581.)
84
Wyeth v. Levine, supra, 555 U.S. at p. 573.
85
English v. Gen. Elec. Co., supra, 496 U.S. at p. 79; see also Fla. Lime & Avocado
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law forbids an action that state law requires”—or vice versa—simultaneous compliance
with both laws is impossible, and the state law is preempted. 86 For example, the Supreme
Court has held that a state law requiring generic drug manufacturers to add warnings to
their labels was preempted where federal law prohibited adding the warnings. 87
Here, simultaneous compliance with state and federal law would not be
impossible. Although the California law at issue would authorize interstate commercial
cannabis activity as a matter of state law, it would not require any party to engage in that
activity. 88 A private party could therefore “comply with both” California and federal law
by simply “refraining from any” cannabis activity that crossed state lines. 89 For this
reason, numerous courts have concluded that state laws that merely authorize and
regulate intrastate cannabis distribution and possession are not preempted by the CSA
under an impossibility analysis. 90 We see no reason why a court would reach a different
conclusion in the context of interstate activities.
Growers, Inc. v. Paul (1963) 373 U.S. 132, 142-143 (“A holding of federal exclusion of
state law is inescapable . . . where compliance with both federal and state regulations is a
physical impossibility for one engaged in interstate commerce”).
86
Mut. Pharm. Co. v. Bartlett, supra, 570 U.S. at p. 486.
87
Mut. Pharm. Co. v. Bartlett, supra, 570 U.S. at p. 475; see ibid. (“Under the
Supremacy Clause, state laws that require a private party to violate federal law are pre-
empted and, thus, are without effect,” internal quotation marks omitted).
88
See Qualified Patients Assn. v. City of Anaheim, supra, 187 Cal.App.4th at p. 759 (no
impossibility preemption of California law legalizing medical cannabis use because it did
not “require[] anything the CSA forbids”).
89
Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at p. 176;
accord Hyland v. Fukuda (9th Cir. 1978) 580 F.2d 977, 980-981 (no conflict between
federal law prohibiting felons from carrying guns and state law allowing such
possession).
90
See, e.g., Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at
p. 176 (Oregon medical cannabis law); Qualified Patients Assn. v. City of Anaheim,
supra, 187 Cal.App.4th at pp. 758-760 (California medical cannabis law); In re State
Question No. 807, Initiative Petition No. 423, supra, 468 P.3d at pp. 390-391 (Oklahoma
ballot initiative to legalize recreational cannabis); Ter Beek v. City of Wyoming (2014)
495 Mich. 1, 12-14 (Michigan medical cannabis law). In contrast, courts have found
impossibility preemption where they conclude that state law requires unwilling parties to
violate the CSA. (See, e.g., People v. Crouse, supra, 388 P.3d at p. 42 [Colorado law
required law enforcement to return resident’s cannabis, thereby violating the CSA];
Bourgoin v. Twin Rivers Paper Co., LLC (Me. 2018) 187 A.3d 10, 18-22 [Maine law
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Obstacle preemption of SB 1326
As to obstacle preemption, the analysis is more complex and we cannot conclude
that the risk is insignificant. The doctrine applies if California’s legalization and
regulation of interstate commercial cannabis activity would stand as an obstacle to
accomplishing the CSA’s objectives, which are “to conquer drug abuse and to control the
legitimate and illegitimate traffic in controlled substances.” 91 “What is a sufficient
obstacle is a matter of judgment, to be informed by examining the federal statute as a
whole and identifying its purpose and intended effects.” 92 But obstacle-preemption
“analysis does not justify a freewheeling judicial inquiry into whether a state statute is in
tension with federal objectives; such an endeavor would undercut the principle that it is
Congress rather than the courts that pre-empts state law.” 93 Accordingly, “a high
threshold must be met if a state law is to be preempted for conflicting with the purposes
of a federal Act.” 94 Indeed, courts “start with the assumption that the historic police
powers of the States were not to be superseded by the Federal Act unless that was the
clear and manifest purpose of Congress.” 95
required employer to subsidize employee’s medical cannabis use, thereby violating the
CSA].)
91
Gonzales v. Raich, supra, 545 U.S. at p. 12.
92
Crosby v. Nat’l Foreign Trade Council (2000) 530 U.S. 363, 373.
93
Chamber of Com. of U.S. v. Whiting (2011) (plurality opin.) 563 U.S. 582, 607, internal
quotation marks omitted. Although Justice Thomas did not join this section of the
Court’s opinion, his writings in other cases suggest that he would impose an even higher
threshold for obstacle preemption—if he would continue to apply the doctrine at all.
(See, e.g., Wyeth v. Levine, supra, 555 U.S. at p. 583 (Thomas, J., conc. in the judg.)
[expressing “increasing[] skeptic[ism]” of “invalidat[ing] state laws based on perceived
conflicts with broad federal policy objectives, legislative history, or generalized notions
of congressional purposes that are not embodied within the text of federal law”].)
94
Chamber of Com. of U.S. v. Whiting, supra, 563 U.S. at p. 607, internal quotation
marks omitted; see also In re Volkswagen “Clean Diesel” Mktg., Sales Pracs., & Prod.
Liab. Litig. (9th Cir. 2020) 959 F.3d 1201, 1212 (“The Supreme Court has found obstacle
preemption in only a small number of cases”).
95
Wyeth v. Levine, supra, 555 U.S. at p. 565; see also City of Columbus v. Ours Garage
& Wrecker Serv., Inc. (2002) 536 U.S. 424, 432; CSX Transp., Inc. v. Easterwood (1993)
507 U.S. 658, 663-664 (“In the interest of avoiding unintended encroachment on the
authority of the States, . . . pre-emption will not lie unless it is the clear and manifest
purpose of Congress,” internal quotation marks omitted).
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In the cannabis context, courts are divided as to whether state laws that authorize
and regulate intrastate cannabis cultivation, distribution, and possession pose an obstacle
to accomplishing the CSA’s objectives. Most courts have upheld such laws against
preemption challenges, concluding that state-law authorization of intrastate cannabis
activities does not interfere with federal enforcement of the CSA. In California, the
Court of Appeal has upheld state laws legalizing cannabis for medical purposes against
obstacle-preemption claims. 96 The Court of Appeal and the Northern District of
California have likewise rejected obstacle-preemption challenges to laws implementing
the State’s regulatory regime—including state laws implementing an identification-card
system for qualifying medical cannabis users, and local laws requiring a permit to operate
medical cannabis dispensaries. 97 Outside of California, the Supreme Courts of
Oklahoma, Michigan, and Arizona have similarly rejected preemption challenges to state
laws legalizing and regulating cannabis for both medical and recreational purposes. 98
But other courts and jurists have reached a different conclusion. In particular, the
Oregon Supreme Court and several dissenting justices of the Oklahoma Supreme Court
have reasoned that, by authorizing activities that federal law prohibits, state-law
regulation of intrastate cannabis activities poses an obstacle to accomplishing the CSA’s
objectives. 99 The Minnesota Court of Appeals has reached a similar conclusion. 100 And
one district division of the California Court of Appeal has likewise held that a local
96
See Qualified Patients Assn. v. City of Anaheim, supra, 187 Cal.App.4th at pp. 760-
763; Kirby v. Cnty. of Fresno (2015) 242 Cal.App.4th 940, 963; City of Garden Grove v.
Superior Ct. (2007) 157 Cal.App.4th 355, 380-386.
97
See Cnty. of San Diego v. San Diego NORML, supra, 165 Cal.App.4th at pp. 826-828
(identification cards); City of Palm Springs v. Luna Crest Inc. (2016) 245 Cal.App.4th
879, 885-886 (city permitting requirements); Joe Hemp’s First Hemp Bank v. City of
Oakland (N.D. Cal. 2016) No. C 15-05053 WHA, 2016 WL 375082, at pp. *3-4 (city
permitting requirements).
98
See Ter Beek v. City of Wyoming, supra, 495 Mich. at pp. 14-18 (Michigan medical
cannabis laws); Reed-Kaliher v. Hoggatt (2015) 237 Ariz. 119, 124-125 (Arizona
medical cannabis laws); In re State Question No. 807, Initiative Petition No. 423, supra,
468 P.3d at pp. 391-393 (Oklahoma ballot initiative that would have legalized, regulated,
and taxed recreational cannabis).
99
See Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at pp.
176-186; In re State Question No. 807, Initiative Petition No. 423, supra, 468 P.3d at pp.
396-398 (Kane, J., dis.), 398-400 (Rowe, J., dis.).
100
See Haumant v. Griffin (Minn. Ct. App. 2005) 699 N.W.2d 774, 780-781 (proposal to
authorize medical cannabis distribution centers under city law was preempted by both
state and federal law).
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permitting regime for medical cannabis collectives was preempted—although the
decision was later vacated when the California Supreme Court granted review and then
dismissed the case as moot. 101
Consistent with the authorities that have upheld state laws regulating intrastate
cannabis activities, we believe there would be strong arguments that California’s
authorization and regulation of interstate cannabis commerce would not pose an obstacle
to accomplishing the CSA’s objectives. To begin with, nothing in California’s law would
interfere with the federal government’s ability to enforce the CSA’s prohibition on
cannabis distribution. Although California would remove criminal sanctions for
specified interstate cannabis activities under state law, it “is often the case that state law
decriminalizes conduct that federal law still prohibits. That state prosecutions can no
longer occur in no way bars federal prosecutions.” 102 Nor would California in any way
“undermine federal enforcement of [the CSA’s] prohibition.” 103 State law would not, for
instance, interfere with any investigatory tools of federal law enforcement. 104
To be sure, Congress might prefer that California retain and enforce its state-law
prohibition on interstate cannabis commerce. But as the requestor explains, Congress
See Pack v. Superior Ct. (2011) 132 Cal.Rptr.3d 633; Pack v. Superior Ct. (Cal. 2012)
101
283 P.3d 1159 (dismissing case as moot after city repealed ordinance).
102
Joe Hemp’s First Hemp Bank v. City of Oakland, supra, 2016 WL 375082, at p. *3;
see also City of Garden Grove v. Superior Ct., supra, 157 Cal.App.4th at p. 385 (“[T]here
is no conflict based on the fact that Congress has chosen to prohibit the possession of
medical marijuana, while California has chosen not to. California’s statutory framework
has no impact on the legality of medical marijuana under federal law”); Ter Beek v. City
of Wyoming, supra, 495 Mich. at p. 15 (noting the right of “the people of the State of
Michigan . . . to part ways with Congress” concerning the scope of criminal liability).
103
Ter Beek v. City of Wyoming, supra, 495 Mich. at p. 16; see Reed-Kaliher v. Hoggatt,
supra, 237 Ariz. at p. 124 (“[T]he statute does not prevent federal authorities from
enforcing federal law—it merely provides a limited state-law immunity,” internal
quotation marks omitted).
104
Compare Oregon Prescription Drug Monitoring Program v. U.S. Drug Enf’t Admin.,
supra, 860 F.3d at p. 1236 (Oregon statute requiring a court order for federal officials to
enforce a subpoena posed an obstacle to implementation of the CSA, which authorized
the Attorney General to obtain “documents through a subpoena . . . without a court
order”), with United States v. California, supra, 921 F.3d at p. 890 (California law
limiting state law enforcement cooperation with federal immigration officials not
preempted; “the choice of a state to refrain from participation cannot be invalid under . . .
obstacle preemption where . . . it retains the right of refusal”).
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could not, consistent with the Constitution, require the State to do so. 105 “[E]ven where
Congress has the authority under the Constitution to pass laws requiring or prohibiting
certain acts, it lacks the power directly to compel the States to require or prohibit those
acts” as a matter of state law. 106 For example, in Murphy v. National Collegiate Athletic
Association, the Supreme Court invalidated a federal law that required States to maintain
state-law prohibitions on sports gambling. 107 Congress, the Court explained, “may not
simply ‘commandeer the legislative processes of the States by directly compelling them
to enact and enforce a federal regulatory program.’” 108 Likewise, here, Congress cannot
prohibit California from repealing its state-law prohibition on interstate commercial
cannabis activities. 109 Nor can Congress order the State to enforce the CSA’s
prohibition. 110 Accordingly, inasmuch as SB 1326 repeals California’s prohibition of
105
See Request for Opinion, at pp. 2-5.
106
Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1477.
107
Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1485.
108
Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1477, quoting New
York v. United States (1992) 505 U.S. 144, 161. The Court explained that the anti-
commandeering principle “serves as one of the Constitution’s structural protections of
liberty,” “promotes political accountability,” and “prevents Congress from shifting the
costs of regulation to the States.” (Id. at p. 1477, internal quotation marks omitted.)
109
Cf. 54 Ops.Cal.Atty.Gen., supra, at p. 61 (“[T]here is nothing in the Controlled
Substances Act which requires the states to retain their existing laws and penalties
regarding the use and possession of marijuana. For example, California could, consistent
with the federal legislation, repeal all statutes prohibiting possession and use of
marijuana”).
110
See Murphy v. Nat’l Collegiate Athletic Ass’n, supra, 138 S.Ct. at p. 1477 (“‘The
Federal Government’ may not ‘command the States’ officers, or those of their political
subdivisions, to administer or enforce a federal regulatory program,’” quoting Printz v.
United States (1997) 521 U.S. 898, 935); see also Qualified Patients Assn. v. City of
Anaheim, supra, 187 Cal.App.4th at p. 761 (“Preemption theory . . . is not a license to
commandeer state or local resources to achieve federal objectives”); In re State Question
No. 807, Initiative Petition No. 423, supra, 468 P.3d at p. 392 (Murphy “reinforce[s] the
. . . limits of [CSA] preemption”); Conant v. Walters (9th Cir. 2002) 309 F.3d 629, 646
(Kozinski, J., conc.) (the fact that individuals “may be more likely to violate federal law
if the additional deterrent of state liability is removed may worry the federal government,
but the proper response—according to New York and Printz—is to ratchet up the federal
regulatory regime, not to commandeer that of the state”); Cnty. of San Diego v. San
Diego NORML, supra, 165 Cal.App.4th at pp. 827-828 (rejecting obstacle-preemption
challenge to state medical cannabis statute in part due to anti-commandeering concerns).
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interstate commercial cannabis sales, that repeal cannot be said to pose an obstacle to
accomplishing the CSA’s objectives.
Of course, SB 1326 does not just remove California-law sanctions for interstate
commercial cannabis activities, allowing such activities to be carried on free from any
state supervision. As described above, it also requires licensing, tracking, and regulation
of interstate sales under the State’s comprehensive regulatory system. Cannabis products
imported into the State would need to meet or exceed California’s health and safety
standards, thereby protecting consumers from potential contaminants and other health
threats. 111 Imported cannabis that is sold within the State would be subject to restrictions
on advertising and sales, thereby protecting minors and minimizing drugged driving and
similar public health hazards. 112 And interstate cannabis commerce would be taxed, with
the proceeds funding enforcement against illegal activities as well as health and safety
research. 113
As to these aspects of SB 1326—regulating and controlling interstate cannabis
commerce—the preemption analysis is less clear. There are reasonable arguments,
though, that, by licensing and regulating interstate cannabis sales, SB 1326 would not
interfere with the federal government’s ability to accomplish the CSA’s objectives. In
fact, comprehensive state regulation would arguably advance those objectives by
minimizing the worst harms associated with illegal drug trafficking. The United States
Department of Justice itself has suggested as much. In a 2013 memorandum, that
Department outlined the federal priorities in enforcing the CSA, including preventing
distribution of cannabis to minors, preventing cannabis revenues from funding “criminal
enterprises,” and minimizing “drugged driving and . . . other adverse public health
consequences.” 114 The Department concluded that state cannabis laws that “implement[]
strong and effective regulatory and enforcement systems . . . may affirmatively address”
these priorities. 115 Here, California’s laws regulating interstate cannabis commerce
111
See Bus. & Prof. Code, § 26303, subd. (a)(1).
112
See Bus. & Prof. Code, § 26303, subd. (a)(2), (6), §§ 26150-26156, §§ 26070-26071,
§ 26140.
113
See Bus. & Prof. Code, § 26306; Rev. & Tax Code, § 34010 et seq.; Rev. & Tax
Code, § 34019; cf. In re State Question No. 807, Initiative Petition No. 423, supra, 468
P.3d at p. 393, fn. 7 (“Much of the excise tax revenue that would be collected [under the
proposed Oklahoma law to legalize cannabis] would be directed to programs specifically
designed to combat drug abuse,” thereby “serv[ing] to aid one of the primary purposes of
the CSA, not thwart it”).
114
Cole Memorandum, at pp. 1-2.
Cole Memorandum, at p. 3. Although the Cole Memorandum was later revoked, (see
115
Memorandum For All United States Attorneys from Jefferson B. Sessions, III, Attorney
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would arguably be the type of “strong and effective regulatory and enforcement
system[]” that could “affirmatively address” the CSA’s core concerns. 116
Indeed, if the CSA preempted California’s efforts to license and regulate interstate
cannabis activities, the result might be that those activities would be left entirely
unregulated by the State. Tellingly, several preemption challenges in this area have been
brought by parties seeking that very result: the ability to engage in cannabis commerce
unhindered by any state or local regulation (albeit still subject to the federal
prohibition). 117 As the California Court of Appeal observed in rejecting such an obstacle-
preemption claim, “common sense suggests that a strong local regulatory regime” would
“tend to prevent” the most harmful types of cannabis trafficking the CSA was designed to
eliminate. 118 Similarly, here, SB 1326 arguably “creat[es] a tightly regulated . . . market”
that would provide “greater support to the federal goals” than the alternative of
eliminating all state-law restraints on interstate cannabis commerce—an alternative the
General, Marijuana Enforcement (Jan. 4, 2018)), the revocation memorandum did not
express any disagreement with the Cole Memorandum on this commonsense point.
Rather, it concluded that cannabis-specific guidance was simply “unnecessary” in light of
the “well-established principles that govern all federal prosecutions.” (Ibid.)
116
Cole Memorandum, at p. 3. For example, the Legislature concluded that, by
“providing legal and regulated channels for multistate commercial cannabis activities,”
the statute would bring more cannabis commerce “into the legal, regulated market” while
“[p]reventing the illegal diversion of cannabis” from California to other States. (Stats.
2022, ch. 396 (SB 1326), § 5, subd. (a); see also Off. of Ass. Floor Analyses, 3d reading
analysis of Sen. Bill No. 1326 (2021-2022 Reg. Sess.) Aug. 19, 2022, p. 4 [statement of
bill sponsor that authorizing interstate activity is necessary “to stabilize the legal
industry” while avoiding “considerable expansion of the illicit market”].) To the extent
SB 1326 succeeds in reducing illicit cannabis trafficking, it could address several federal
priorities—including preventing cannabis revenues from funding “criminal enterprises,
gangs, and cartels,” and preventing “violence and the use of firearms” in cannabis
distribution. (Cole Memorandum, at pp. 1-2.)
117
See City of Palm Springs v. Luna Crest Inc., supra, 245 Cal.App.4th at pp. 881, 885-
886; Joe Hemp’s First Hemp Bank v. City of Oakland, supra, 2016 WL 375082, at pp.
*3-4.
118
City of Palm Springs v. Luna Crest Inc., supra, 245 Cal.App.4th at pp. 885-886; see
Joe Hemp’s First Hemp Bank v. City of Oakland, supra, 2016 WL 375082, at p. *3 (local
permitting scheme for medical cannabis dispensaries “appears to serve the goal of
controlling the traffic in controlled substances, albeit to a weaker degree than criminal
sanctions (but to a stronger degree than complete deregulation)”).
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State “clearly can” enact. 119 For these reasons, a court could reasonably conclude that SB
1326 would not satisfy the “high threshold” for determining that a state law is invalid on
obstacle-preemption grounds. 120
Notwithstanding these valid legal arguments against obstacle preemption, there
remains a not insignificant risk that a court would reach a different conclusion. As noted
above, some courts and jurists have determined that state laws authorizing and regulating
cannabis activities do pose an obstacle to accomplishing the CSA’s objectives. Most
notably, the Oregon Supreme Court has reasoned that state laws “[a]ffirmatively
authorizing” medical cannabis use—“a use that federal law prohibits”—“stand[] as an
obstacle to the implementation” of the CSA’s purposes and objectives. 121 The court
analogized the CSA to a federal law “prohibit[ing] anyone under the age of 21 from
driving.” 122 Given such a law, the court reasoned, a state law “authoriz[ing] anyone over
the age of 16 to drive and giv[ing] them a license to do so” would pose an obstacle to
Congress’s objective of “keeping everyone under the age of 21 off the road.” 123
Similarly, the court concluded, a state law that “authorizes persons holding medical
marijuana licenses to engage in conduct” that the CSA prohibits poses an obstacle to
Congress’s objective of preventing all types of cannabis use. 124 Citing Emerald Steel, a
Chemerinsky et al., Cooperative Federalism and Marijuana Regulation (2015) 62
119
UCLA L. Rev. 74, 112.
120
Chamber of Com. of U.S. v. Whiting, supra, 563 U.S. at p. 607; see Wyeth v. Levine,
supra, 555 U.S. at p. 565 (preemption requires evidence of “the clear and manifest
purpose of Congress”); Medtronic, Inc. v. Lohr, supra, 518 U.S. at p. 485 (“[B]ecause the
States are independent sovereigns in our federal system, we have long presumed that
Congress does not cavalierly pre-empt” state laws).
121
Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at p. 178.
122
Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at p. 182.
123
Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at p. 182.
124
Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at p. 182.
The specific dispute in Emerald Steel was whether state law required an employer to
accommodate an employee’s medical cannabis use. (See id. at p. 161.) The court
concluded that, to the extent that state law required as much, the law was preempted by
the CSA. (See id. at pp. 161, 178.) Although the decision focused on an employment
dispute, the court’s reasoning could be construed more broadly to suggest that laws that
authorize and regulate voluntary cannabis activities are also preempted. (See id. at pp.
176-186; but see Willis v. Winters (2011) 350 Or. 299, 309, fn. 6 [cautioning against an
overly broad reading of Emerald Steel; the decision “should not be construed as
announcing a stand-alone rule that any state law that can be viewed as ‘affirmatively
authorizing’ what federal law prohibits is preempted”].) In the years since Emerald Steel,
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federal district court in Colorado has held, in the context of a contract dispute, that
“Colorado’s marijuana laws are preempted by” the CSA as well. 125
Three dissenting justices of the Oklahoma Supreme Court have similarly
concluded that state ballot initiatives to legalize and regulate cannabis under state law
would be preempted. 126 Echoing the Oregon Supreme Court, one justice reasoned that,
by “affirmatively authoriz[ing] conduct the CSA expressly forbids,” a state law proposal
to “authorize[] the widespread production, sale, and use of” cannabis would “clearly
present[] an obstacle” to accomplishing Congress’s objectives of prohibiting cannabis
“production, sale, and use.” 127 Another justice reasoned that, by “sanction[ing] and
licens[ing]” cannabis distribution and use, the State would allow such activities to
“proliferat[e]”—making it “virtually impossible for federal law enforcement, operating
with limited resources, to accomplish Congress’s objective . . . to control” cannabis
“production, sale, and use.” 128 In addition, the Minnesota Court of Appeals has
concluded that a local ballot measure to authorize medical cannabis distribution was
preempted by the CSA, albeit in a decision with little analysis. 129
In 2011, a district division of the California Court of Appeal similarly concluded
that a city law licensing medical cannabis collectives was preempted by the CSA. 130 The
court acknowledged that the State could eliminate its existing state-law prohibition on
we are not aware of any decisions adjudicating further preemption challenges to Oregon’s
cannabis laws.
125
Haeberle v. Lowden (D. Colo. 2012) No. 2011CV709, 2012 WL 7149098, at p. *4.
The court concluded that the parties’ contract for the sale of cannabis products was
therefore void as contrary to public policy. (Id. at p. *5.) No appeal was taken, and the
decision does not appear to have been cited by any subsequent judicial authorities.
126
See In re State Question No. 807, Initiative Petition No. 423, supra, 468 P.3d at pp.
396-398 (Kane, J., dis.), 398-400 (Rowe, J., dis.); Tay v. Green (2022) 508 P.3d 431, 436
(Kane, J., dis.), 436-438 (Rowe, J., conc. in part, dis. in part). In both cases, the
Oklahoma Supreme Court majority concluded that the CSA would not preempt the
proposed state law. (See In re State Question No. 807, Initiative Petition No. 423, supra,
468 P.3d at pp. 390-393; Tay v. Green, supra, 508 P.3d at p. 434.)
In re State Question No. 807, Initiative Petition No. 423, supra, 468 P.3d at p. 397
127
(Kane, J., dis.).
In re State Question No. 807, Initiative Petition No. 423, supra, 468 P.3d at p. 399
128
(Rowe, J., dis.).
129
See Haumant v. Griffin, supra, 699 N.W.2d at pp. 780-781.
130
See Pack v. Superior Ct., supra, 132 Cal.Rptr.3d at p. 638.
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cannabis activities without preemption concerns. 131 But the law at issue also established
a permitting regime, requiring medical cannabis businesses to pay the city an annual fee
and participate in a lottery to obtain a business permit. The court concluded that the law
therefore went “beyond decriminalization into authorization,” and was preempted. 132
The decision was later vacated when the California Supreme Court granted review. 133
But because the appeal was dismissed as moot after the city repealed the ordinance, the
Supreme Court never weighed in on the Court of Appeal’s analysis—leaving future
California courts free to adopt similar reasoning.
In light of these decisions, we conclude that the risk of a court holding SB 1326
preempted is significant. A court could adopt the Oregon Supreme Court’s reasoning, for
example, to conclude that SB 1326 frustrated the CSA’s objectives by “[a]ffirmatively
authorizing” interstate cannabis activities that “federal law prohibits.” 134 And a court
could similarly adopt the view of one of the Oklahoma Supreme Court dissents that, by
“sanction[ing] and licens[ing]” cannabis distribution, the State would allow interstate
cannabis activities to “proliferat[e]”—making it “virtually impossible for federal law
enforcement, operating with limited resources, to accomplish Congress’s objective” to
prohibit cannabis sales. 135 Although these decisions concerned regulation of intrastate
cannabis activities, similar reasoning could apply in the context of interstate sales. And
the fact that no court has yet considered preemption in the interstate context only further
increases the risk here, as the validity of laws like SB 1326 remains untested.
Moreover, the United States has suggested that the CSA preemption analysis
might depend, in part, on how state law is implemented and enforced “in practice.” 136 In
briefing before the U.S. Supreme Court, the United States has argued that obstacle
preemption of state cannabis laws could sometimes turn on “the practical efficacy of [the
State’s] regulatory system in preventing or deterring [state-law noncompliant] marijuana
trafficking.” 137 If a future court evaluating a preemption challenge to SB 1326 adopted
131
Pack v. Superior Ct., supra, 132 Cal.Rptr.3d at pp. 651-652.
132
Pack v. Superior Ct., supra, 132 Cal.Rptr.3d at p. 652.
133
See Pack v. Superior Ct., supra, 283 P.3d at p. 1159.
134
Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or. at p. 178.
In re State Question No. 807, Initiative Petition No. 423, supra, 468 P.3d at p. 399
135
(Rowe, J., dis.).
Brief for the United States as Amicus Curiae, Nebraska v. Colorado, No. 144 Orig.
136
(Dec. 2015), at p. 22.
137
Brief for the United States as Amicus Curiae, Nebraska v. Colorado, No. 144 Orig.,
supra, at p. 22.
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that view, its decision could depend on how effectively the statute’s regulatory controls
are ultimately enforced. That possibility only further increases the uncertainty at this
stage, before the law has taken effect.
In sum, while there are strong arguments against preemption here, courts and
jurists have divided over whether the CSA preempts laws regulating intrastate cannabis
activities. 138 And no court has yet considered a preemption challenge to a law, like SB
1326, that authorizes interstate sales. Given the ongoing division of judicial authority
and the lack of any directly relevant precedent, we cannot conclude that the risk of a
future court deeming SB 1326 preempted is so low as to be not “significant.” 139
Likelihood of preemption litigation
Looking beyond the substance of the preemption analysis, several comment letters
advance a different basis for concluding that the legal risk here is minimal. They argue
that, in practice, there is no “significant” risk that any party would sue the State to assert
preemption of SB 1326. We cannot agree.
To begin with, commenters raise two reasons why the federal government would
be unlikely to initiate a preemption suit. First, commenters point to the appropriations
rider discussed above, which prohibits the United States Department of Justice from
using appropriated funds to “prevent [States] from implementing their own laws that
authorize the use, distribution, possession, or cultivation of medical marijuana.” 140
Courts have construed this language to bar the Justice Department “from spending money
on actions that prevent” States from “giving practical effect to their state laws that
authorize the . . . distribution . . . of medical marijuana.” 141 That rider would appear to
prohibit the Justice Department from challenging SB 1326 to the extent it authorizes
interstate cannabis distribution for medical purposes. For this reason, the State’s legal
risk would be lower—in the short term—if it authorized interstate sales for medical uses
138
See Congressional Research Service, State Legalization of Recreational Marijuana:
Selected Legal Issues, at p. 16 (Jan. 13, 2014), https://crsreports.congress.gov/product/pdf
/R/R43034/6 (as of Dec. 19, 2023) (given courts’ “varying approaches,” “the extent to
which state marijuana provisions (whether medicinal or recreational) are preempted by
the CSA is unsettled”).
139
Bus. & Prof. Code, § 26308, subd. (a)(4); see, e.g., Oxford English Dict. (updated
through Sept. 2023) [defining “significant” as “worthy of attention”].
Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, § 531 (Dec. 29, 2022)
140
136 Stat. 4459; see ante, fn. 21.
141
United States v. McIntosh, supra, 833 F.3d at p. 1176; see also United States v.
Bilodeau, supra, 24 F.4th at pp. 712-713.
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rather than for recreational purposes, where the rider does not apply. But even in the
medical context, the rider is only temporary: it expires later this fiscal year. 142 And, as
discussed above, we are not in a position to speculate about whether it will be renewed.
Second, commenters argue that the practical likelihood of a federal suit to
challenge SB 1326 is no greater than the likelihood of a suit under current law. 143 The
CSA, the commenters observe, makes no distinction between intrastate and interstate
sales of controlled substances. 144 Rather, the statute contains a single, undifferentiated
ban on distribution—which is based, in all cases, on Congress’s power to regulate
interstate commerce. 145 Accordingly, the commenters reason that, by authorizing
interstate cannabis commerce, the State would not be exposing itself to any greater risk of
suit than the risk already associated with the State’s existing authorization of intrastate
sales—authorization that, to date, the United States has never challenged.
But it remains possible that the federal government might view interstate cannabis
distribution as posing a greater threat to federal priorities than existing intrastate
activities. Interstate sales might be seen, for example, to create a larger risk of diversion
to neighboring States, or to have a greater potential impact on national markets. For
these or other reasons, the State’s authorization of interstate sales could prompt a federal
challenge, even though its existing laws authorizing intrastate sales so far have not. In
any event, given our statutory charge to analyze only questions of law, we are not in a
position to predict whether a current or future federal administration would decide to
initiate legal action.
142
See ante, fn. 21; see also United States v. McIntosh, supra, 833 F.3d at p. 1179
(although the rider “currently prohibit[s] [the Department of Justice] from spending
funds,” “Congress could appropriate funds” again “tomorrow”).
143
See Rural County Representatives Comment, at p. 7 (arguing that any legal risk to the
State would not be the “result” of “state law authorization” under SB 1326 because the
legal risk is no different than already exists today); California Cannabis Authority
Comment, at p. 3; see also Request for Opinion, at p. 7 (because the CSA “does not
distinguish between interstate and wholly intrastate activity,” there is “no reason to
conclude that [it] subjects a state to greater liability for legalizing and regulating
commercial cannabis activity involving out-of-state licensees, as compared to legalizing
and regulating wholly in-state commercial cannabis activity”).
144
See 21 U.S.C. § 841.
145
See Gonzales v. Raich, supra, 545 U.S. at p. 17 (upholding Congress’s constitutional
authority to prohibit purely intrastate cultivation and use of cannabis given Congress’s
judgment that those activities “have a substantial effect on interstate commerce”).
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Turning to the possibility of preemption suits brought by parties other than the
federal government, commenters contend that, as a matter of law, no other party could
sue the State to allege preemption of SB 1326. 146 As these commenters observe,
numerous courts have held that the Controlled Substances Act does not provide a cause
of action for private parties to sue a State challenging its laws on preemption grounds. 147
And the States of Nebraska and Oklahoma were unsuccessful in attempting to sue
Colorado to assert preemption of that State’s laws authorizing cannabis use. 148
But courts have allowed CSA preemption challenges to proceed in other settings.
For example, the California Court of Appeal has held that California counties can sue the
State to assert CSA preemption of state laws that impose obligations on the counties. 149
Preemption claims have also been adjudicated in disputes between private parties—for
example, where state law required an employer to accommodate or reimburse an
employee’s medical cannabis use. 150 And CSA preemption has been raised in litigation
between local jurisdictions and their residents—for example, where a county ordinance
146
See Rural County Representatives Comment, at pp. 5-6; California Cannabis
Authority Comment, at p. 2. The commenters did not dispute that the federal government
could bring a preemption suit. (See generally Safe Streets All. v. Hickenlooper (10th Cir.
2017) 859 F.3d 865, 898 [“The Supreme Court has reaffirmed time and again that the
United States is empowered to enforce the supremacy of federal law against preempted
State action, and that it may obtain an injunction to that effect”].)
147
See Safe Streets All. v. Hickenlooper, supra, 859 F.3d at pp. 903-904; Sherrell v.
California (E.D. Cal. 2022) No. 2:22-CV-0275-KJM-KJN PS, 2022 WL 1138172, at
p. *3 (collecting cases).
148
Nebraska and Oklahoma first sought to initiate an original action in the United States
Supreme Court, but the Court declined to exercise its original jurisdiction. (See
Nebraska v. Colorado (2016) 577 U.S. 1211.) They then moved to intervene in pending
litigation against Colorado before the Tenth Circuit, but that court held that it lacked
jurisdiction to hear their claims. (See Safe Streets All. v. Hickenlooper, supra, 859 F.3d
at pp. 909-913.)
149
See Cnty. of San Diego v. San Diego NORML, supra, 165 Cal.App.4th at pp. 813-818
(allowing preemption challenge to state law requiring county to operate an identification-
card system for medical cannabis users).
150
See, e.g., Emerald Steel Fabricators, Inc. v. Bureau of Lab. & Indus., supra, 348 Or.
at pp. 172-186; Hager v. M&K Constr. (2021) 246 N.J. 1, 28-42; Appeal of Panaggio,
supra, 174 N.H. at pp. 92, 95-103; Bourgoin v. Twin Rivers Paper Co., LLC, supra, 187
A.3d at pp. 18-22; Musta v. Mendota Heights Dental Ctr., supra, 965 N.W.2d at pp. 321-
328; Garcia v. Tractor Supply Co. (D.N.M. 2016) 154 F.Supp.3d 1225, 1230.
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prohibited cannabis activities that state law allowed. 151 Analogous conflicts could
potentially develop in the context of SB 1326. Although California might not be named
as a defendant in certain types of suits, the State may elect to participate as an amicus or
intervenor to defend its laws against an adverse judgment—as it has done in past CSA
preemption litigation. 152 In light of these possibilities, as well as the potential for a
federal government suit, we cannot conclude that the likelihood of litigation involving the
State is insignificant.
Could state officials be federally prosecuted for implementing SB 1326?
The request letter analyzes an additional risk: that individual state officials who
implement and administer SB 1326 could face federal criminal lability under the
Controlled Substances Act. For example, if a state official issued a license authorizing a
California company to export cannabis, could that official be prosecuted if the company
later distributed cannabis across state lines in accordance with the license? In our view,
state officials would have strong arguments against criminal liability for carrying out
their official duties. But we acknowledge that some state and federal authorities could
support CSA liability for officials in these circumstances. 153
To begin with, the risk of state officials being federally prosecuted could be seen
as a “legal risk to the State of California” within the meaning of Business and Professions
Code section 26308(a)(4). To be sure, the State itself would not face prosecution; the
151
See, e.g., Kirby v. Cnty. of Fresno, supra, 242 Cal.App.4th at pp. 947, 961-963;
Qualified Patients Assn. v. City of Anaheim, supra, 187 Cal.App.4th at pp. 756-763; see
also, e.g., City of Palm Springs v. Luna Crest Inc., supra, 245 Cal.App.4th at pp. 885-886
(preemption challenge to city permitting requirement for medical cannabis dispensaries);
Joe Hemp’s First Hemp Bank v. City of Oakland, supra, 2016 WL 375082, at pp. *3-4.
152
See, e.g., City of Garden Grove v. Superior Ct., supra, 157 Cal.App.4th at p. 364
(“[T]he Attorney General of California sought leave to file an amicus curiae brief” given
that the City was “challenging the very constitutionality of California’s medical
marijuana laws”); cf. White Mountain Health Ctr., Inc. v. Maricopa Cnty. (Ariz. Ct. App.
2016) 241 Ariz. 230, 235-236 (State of Arizona intervened in preemption litigation
between private company and county over zoning of cannabis business).
153
Although we need not analyze the issue, we also note that cannabis activity prohibited
by the CSA may qualify as “racketeering activity” under the Racketeer Influenced and
Corrupt Organizations Act (RICO). (See generally Safe Streets All. v. Hickenlooper,
supra, 859 F.3d at p. 882.) The Oklahoma Supreme Court has concluded that a proposed
state law authorizing and regulating cannabis activities would not expose the State or its
officials to RICO liability. (See In re State Question No. 807, Initiative Petition No. 423,
supra, 468 P.3d at pp. 394-396.)
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individual officer—not the State—would face any criminal sanctions. But the State’s
ability to implement SB 1326 and retain a workforce could be chilled and undermined if
necessary state personnel faced federal prison sentences for doing their jobs. The State
might also expend resources defending its employees against criminal charges. 154 If the
State provided for an official’s defense, then the criminal proceeding would involve a
direct financial “conflict between the State . . . and the federal government,” with the
State funding the defense and the United States funding the prosecution. 155 As noted, the
requestor analyzes the prosecution of state officials as a relevant legal risk here. 156
As to whether state officials could be successfully prosecuted, the requestor offers
several reasons why they could not. First, the requestor believes “it is doubtful” that a
state official administering state cannabis laws would satisfy the elements for a CSA
violation. 157 “At least in the absence of activities that could constitute outright
possession or distribution,” the requestor explains, “any such liability would presumably
be incurred under conspiracy or aiding-and-abetting theories.” 158 Both theories would
require that the state official acted with the intent for another party to commit an act
which is a CSA violation. 159 In light of that requirement, courts have concluded in
154
See Gov. Code, § 995.8 (the State “may provide for the defense of a criminal action
. . . brought against an employee” if the action “is brought on account of an act or
omission in the scope of [the employee’s] employment” and the State “determines that
such defense would be in the best interests of the [State] and that the employee . . . acted,
or failed to act, in good faith, without actual malice and in the apparent interests of the”
State); e.g., Lexin v. City of San Diego (2013) 222 Cal.App.4th 662, as mod. on denial of
reh’g (Jan. 22, 2014).
155
Sen. Floor, Hearing on Sen. Bill. No. 1326 (Aug. 25, 2022), Sen. Caballero, at 2:09:20
(statement of bill author that, under section 26308(a), “interstate cannabis agreements . . .
cannot go into effect until there is an appropriate assurance that the agreements will not
cause conflict between the State of California and the federal government”).
156
See Request for Opinion, at pp. 5-7.
157
Request for Opinion, at p. 6.
158
Request for Opinion, at p. 6.
159
A person is liable for aiding and abetting a federal crime under 18 U.S.C. section 2where they “(1) take[] an affirmative act in furtherance of [the] offense, (2) with the
intent of facilitating the offense’s commission.” (Rosemond v. United States (2014) 572
U.S. 65, 71; see also White Mountain Health Ctr., Inc. v. Maricopa Cnty., supra, 241
Ariz. at p. 246 [“[T]o prove aiding and abetting under federal law, it is necessary that a
defendant . . . wishes to bring about [the venture], that he seek[s] by his action to make it
succeed,” internal quotation marks omitted].) A conspiracy conviction under 18 U.S.C.
section 371 requires proof that two or more individuals “reach[ed] an agreement with the
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various situations that state and local officials would not incur CSA liability for
implementing state laws regulating cannabis. 160
But courts have sometimes held that the intent requirement for aiding and abetting
or conspiracy is satisfied through knowing assistance—i.e., where “a person actively
participates in a criminal venture with full knowledge of the circumstances constituting
the charged offense.” 161 Applying that view, the Supreme Courts of Minnesota and
specific intent that the underlying crime be committed by some member of the
conspiracy.” (Ocasio v. United States (2016) 578 U.S. 282, 288, italics and internal
quotation marks omitted.)
160
See Qualified Patients Assn. v. City of Anaheim, supra, 187 Cal.App.4th at pp. 759-
760 (“[G]overnmental entities do not incur aider and abettor . . . liability by complying
with their obligations under the state medical marijuana laws”); White Mountain Health
Ctr., Inc. v. Maricopa Cnty., supra, 241 Ariz. at p. 246 (“[W]e fail to see how County
officials who obey state law in passing a zoning ordinance . . . or processing applications
for zoning clearance . . . can be liable as aiders or abettors”); Joe Hemp’s First Hemp
Bank v. City of Oakland, supra, 2016 WL 375082, at p. *3 (city permitting scheme for
medical cannabis dispensaries did not create aiding-and-abetting liability “because the
permit scheme itself does not violate the Controlled Substances Act but rather regulates
certain entities that do”); City of Garden Grove v. Superior Ct., supra, 157 Cal.App.4th at
p. 368; Cnty. of San Diego v. San Diego NORML, supra, 165 Cal.App.4th at p. 825,
fn. 13. The requestor also cites the Ninth Circuit’s decision in Conant v. Walters. (See
Request for Opinion, at p. 6.) There, the court held that a doctor would not necessarily
incur aiding-and-abetting liability by “recommending” cannabis to a patient—a
requirement for the medical use of cannabis under California law—even if the physician
anticipates that the patient will use the recommendation to acquire cannabis. (Conant v.
Walters, supra, 309 F.3d at pp. 635-636.) The court further stated, however, that aiding-
and-abetting liability would attach if “the physician intends for the patient to use” the
recommendation to obtain cannabis. (Id. at p. 635, italics added.) The court’s analysis
suggests that, in our circumstances, liability might turn on the specific facts concerning
the state official’s intent in carrying out their job functions.
161
Rosemond v. United States, supra, 572 U.S. at p. 77; see LaFave, 2 Subst. Crim. L.
(3d ed.) § 13.2(d), Knowing assistance or encouragement (describing division in case law
concerning whether knowing assistance satisfies the mens rea for aiding and abetting); id.
at fn. 113 (the question is “quite similar” for conspiracy). The issue could arise, for
instance, where a “lessor rents with knowledge that the premises will be used to establish
a bordello” (id., § 13.2(d)), or “the owner of a gun store . . . sells a firearm to a criminal,
knowing but not caring how the gun will be used” (Rosemond v. United States, supra,
572 U.S. at p. 77, fn. 8 [reserving the question of the store owner’s liability for
“incidentally facilitat[ing],” but not “actively participat[ing] in,” the “criminal venture”]).
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Maine have held that an employer who reimburses an employee for cannabis used to treat
a work-related injury is liable for aiding and abetting the employee’s CSA violation—
even if state law required the employer to provide the reimbursement. 162 In the view of
those courts, the employer would satisfy the intent requirement by actively facilitating the
employee’s cannabis use with full knowledge of the resulting CSA violation. 163 Here, a
federal prosecutor could attempt to invoke a similar intent theory to argue, for example,
that a state official who grants a cannabis export license to a private company is liable for
knowingly facilitating the company’s CSA violation.
Moreover, to the extent state officials personally handled cannabis in the course of
their job duties, they may directly satisfy the elements of a CSA violation. The CSA
broadly defines unlawful distribution as the intentional transfer of a controlled substance
from one person to another. 164 Applying that definition, the Colorado Supreme Court has
reasoned that if state law enforcement officials returned a resident’s medical cannabis,
the officials would thereby “distribute marijuana in violation of the CSA.” 165 In the
court’s view, officials would be liable even though state law required them to deliver the
cannabis because the CSA prohibits distribution “without regard to whether state law
permits [cannabis] use.” 166 Here, a prosecutor could similarly argue that if state officials
handled and returned cannabis while implementing SB 1326—for example, to inspect
162
See Musta v. Mendota Heights Dental Ctr., supra, 965 N.W.2d at p. 327
(“[M]andating [the employer] to pay for [the employee’s] medical cannabis . . . makes
[the employer] criminally liable for aiding and abetting the possession of cannabis under
federal law”); Bourgoin v. Twin Rivers Paper Co., LLC, supra, 187 A.3d at p. 19. Both
courts concluded that the laws requiring reimbursement were therefore preempted under
an impossibility analysis. Other courts have rejected preemption challenges to similar
laws, concluding that employers would not incur aiding-and-abetting liability. (See, e.g.,
Appeal of Panaggio, supra, 174 N.H. at pp. 97-100.)
See Musta v. Mendota Heights Dental Ctr., supra, 965 N.W.2d at p. 325; Bourgoin v.
163
Twin Rivers Paper Co., LLC, supra, 187 A.3d at p. 19.
164
See 21 U.S.C. § 841, subd. (a)(1) (it is unlawful to “knowingly or intentionally”
“distribute . . . a controlled substance”); 21 U.S.C. § 802, subd. (11) (“distribute” means
“to deliver (other than by administering or dispensing) a controlled substance”); id.,§ 802, subd. (8) (“delivery” means “the actual . . . transfer of a controlled substance”).
165
People v. Crouse, supra, 388 P.3d at p. 42.
166
People v. Crouse, supra, 388 P.3d at p. 42. The California Court of Appeal, in
contrast, has suggested that a state official could only “be found in violation of 21 U.S.C.
§ 841(a)(1) for distributing a controlled substance . . . if he or she intended to act as a
drug peddler rather than a law enforcement official.” (City of Garden Grove v. Superior
Ct., supra, 157 Cal.App.4th at p. 390.)
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interstate shipments—they would thereby commit distribution under the CSA. Officials
in this scenario might also satisfy the elements for unlawful possession. 167
Second, the requestor argues that, even if state officials satisfied the requirements
for a CSA violation, they would be shielded from liability by the CSA’s immunity
provision. As relevant here, section 885(d) of title 21 of the United States Code provides
that “no civil or criminal liability shall be imposed by virtue of [the CSA] . . . upon any
duly authorized officer of any State . . . who shall be lawfully engaged in the enforcement
of any law or municipal ordinance relating to controlled substances. 168 “This provision
protects accepted law enforcement tactics such as sting . . . operations in which officers
handle” drugs, or “the transfer of suspected drugs to . . . a clerk of court in the course of
presenting evidence at trial.” 169
In the cannabis context, most courts have held that section 885(d) protects state
and local officials who implement state regulatory laws—such as by granting zoning
permits, or returning a resident’s cannabis—even if the official’s actions would otherwise
constitute a CSA violation. 170 But the Colorado Supreme Court has concluded otherwise,
construing section 885(d) to provide immunity only if an official’s actions would not
otherwise violate the CSA. 171 Given the division of authority in this area, it would be
167
See 21 U.S.C. § 844, subd. (a) (prohibiting possession of a controlled substance);
21 U.S.C. § 841, subd. (a)(1) (prohibiting possession with intent to distribute a controlled
substance).
21 U.S.C. § 885, subd. (d). The provision similarly immunizes “any duly authorized
168
Federal officer lawfully engaged in the enforcement of [the CSA].” (Ibid., italics added.)
169
United States v. Cortes-Caban (1st Cir. 2012) 691 F.3d 1, 20-21.
170
See White Mountain Health Ctr., Inc. v. Maricopa Cnty., supra, 241 Ariz. at p. 246
(section 885(d) immunizes local officials who implement state medical cannabis laws by
“promulgating reasonable regulations” and “processing applications for . . . zoning
permits”); City of Garden Grove v. Superior Ct., supra, 157 Cal.App.4th at p. 390 (where
state law required police officers to return a resident’s cannabis, “the police would be
entitled to immunity under” section 885(d) against any charge of CSA distribution); State
v. Okun (Ariz. Ct. App. 2013) 231 Ariz. 462, 466; State v. Kama (2002) 178 Or.App.
561, 565; Smith v. Superior Ct. (Cal. Super. Ct. App. Div. 2018) 28 Cal.App.5th Supp. 1,
6.
171
People v. Crouse, supra, 388 P.3d at pp. 42-43. The court emphasized that section
885(d) applies only to officers who are “lawfully” engaged in the enforcement of state
law, concluding that conduct is “lawful” only if it complies with both state and federal
law, including the CSA. (Id. at p. 43.) Applying that construction, the court held that if a
state official returned a resident’s cannabis (as required by state law), section 885(d)
would not shield the official from liability because returning the cannabis would
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uncertain whether officials who implemented SB 1326 would receive immunity under
section 885(d) if their actions otherwise gave rise to CSA liability.
Finally, it is not clear that the United States Department of Justice would choose to
prosecute state officials for actions taken to implement state laws. We are not aware of a
single such prosecution ever occurring—even during periods when the federal
government more actively enforced the CSA against cannabis activities. 172 If a future
federal administration ever decided to increase CSA enforcement, the historical record
suggests it would be more likely to do so by either prosecuting private individuals who
commit clear-cut CSA violations, or by seeking to enjoin enforcement of state law on
preemption grounds. And the congressional appropriations rider discussed above would
currently limit the Department’s ability to prosecute state officials who implemented SB
1326 in the medical-cannabis context. 173 Still, we cannot predict whether the rider will
be renewed, or whether a future federal administration might adopt a more aggressive
approach by prosecuting state officials. Indeed, two U.S. Attorneys have previously
suggested that such a prosecution could be possible. 174
constitute distribution under the CSA. Several dissenting justices disagreed, construing
section 885(d) to provide immunity whenever state officials are acting pursuant to state-
law authority. (Id. at p. 44.) The dissent reasoned that the majority’s view “leads to
absurd results” because officers would not receive immunity in cases where section
885(d) was clearly intended to apply—such as “when a law enforcement officer provides
marijuana to a target in a sting operation.” (Id. at p. 45.) Indeed, the majority’s reading
would appear to render section 885(d) a nullity, as the provision would shield officials
from CSA liability only when they had no liability to begin with.
172
See City of Garden Grove v. Superior Ct., supra, 157 Cal.App.4th at p. 390 (“As a
practical matter, . . . it seems exceedingly unlikely that federal prosecutors would ever
attempt to haul a local constable into federal court for complying with a state judicial
order calling for [the officer to return] a qualified patient’s medical marijuana. We are
not aware of a single instance in which this has ever occurred”); White Mountain Health
Ctr., Inc. v. Maricopa Cnty., supra, 241 Ariz. at p. 246 (finding “no evidence of a
credible threat of prosecution” for “County officials who obey state law in passing a
zoning ordinance . . . or processing applications for zoning clearance”).
173
See ante, fn. 21; United States v. McIntosh, supra, 833 F.3d at pp. 1175-1179.
174
In 2011, the U.S. Attorneys for the Eastern and Western Districts of Washington sent
a letter to the Governor of Washington concerning legislative proposals to license
cannabis cultivation and sales. (See Pack v. Superior Ct., supra, 132 Cal.Rptr.3d at
p. 650, fn.27, citing U.S. Attorney Jenny A. Durkan and U.S. Attorney Michael C.
Ormsby, letter to Governor Christine Gregoire, Apr. 14, 2011.) The letter stated that
“state employees who conduct[] activities mandated by the . . . legislative proposals . . .
would not be immune from liability under the CSA.” (Ibid.)
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In sum, if state officials were federally prosecuted for implementing SB 1326, we
believe they would have strong arguments that they cannot be held liable for carrying out
their official duties. But given the authorities that could support CSA liability in these
circumstances, some legal risk would remain. We therefore conclude that the possibility
of state officials facing criminal prosecution only further increases the State’s legal risk
from authorizing interstate cannabis sales.
CONCLUSION
We conclude that state-law authorization for commercial cannabis activity
between out-of-state licensees and California licensees could “result in significant legal
risk to the State of California under the federal Controlled Substances Act” within the
meaning of Business and Professions Code section 26308(a)(4).
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