"We want to be treated like any other industry," Jason Wild, CEO of a leading cannabis operator TerrAscend Corp TSNDF said Tuesday at Benzinga Cannabis Capital Conference in Chicago, Illinois. "That’s all we want. We don’t want any special treatment. We just want to be not treated like criminals."

The panel, moderated by Tim Seymour, portfolio manager of the Amplify Seymour Cannabis ETF CNBS, discussed the commerce clause, a critical issue for the cannabis industry. The commerce clause in the U.S. Constitution gives the U.S. Congress the power to regulate commerce between states, with foreign nations and Indian tribes.

Emily Paxhia, managing one of the longest-running dedicated cannabis investment funds, Poseidon Investment Management, explained the distinction: intrastate refers to cannabis retail, sales and manufacturing within a single state, while interstate commerce pertains to activities across state lines, involving the dormant commerce clause.

In July, a federal court dismissed a lawsuit from major marijuana companies that sought to prevent the U.S. government from enforcing cannabis prohibition against their in-state activities. Judge Mark G. Mastroianni ruled in favor of the U.S. Department of Justice's motion to dismiss the case.

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Times Are Changing

Paxhia highlighted recent developments that signal potential change. "We've all watched as a very dynamic Supreme Court that is sitting today is overturning long-standing rulings and seem to be ruling in favor of states’ rights. The Chevron case, being another example that just happened around the interference or the reaching of government into businesses and having an impact on those businesses."

She explained that this is why the cannabis industry doesn't have credit card processing and why insurance providers and banking relationships are limited. She believes the conditions have changed and that the Supreme Court has changed.

Silver Bullet

What is the impact of winning against the dormant commerce clause case?

"If and when we win the case, 280E would go away,” Wild said. “That violation of the Controlled Substances Act is what causes cannabis companies to have to pay taxes and not be able to deduct expenses." He suggested winning this case could bring even more benefits to the industry than rescheduling cannabis as it should have a retroactive effect on taxes.

"So the main point of our argument is that our commitment is that state-legal cannabis operators who are following the laws of those specific states should not be considered to be in violation of the Controlled Substances Act," Wild added.

Seymour concluded that while there may be no single solution, this case seems as close to a "silver bullet" as possible.

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