Why are we writing about a Whole Foods salad in a cannabis newsletter? Great question.
A claim at the centre of an ongoing lawsuit accusing a cannabis company employee of hiding cannabis in a Whole Foods salad and traveling over state lines reveals some of the more absurd aspects of trying to run a federally illegal business in legal cannabis states. This was brought to light in a piece by Bloomberg’s Tiffany Kary (via the Financial Post).
Whither the weed?
In the wake of a failed merger between Arizona’s Harvest Health & Recreation Inc. and Verano Holdings Corp. in Illinois, a former Harvest employee claims the Verano employee was planning to propagate cannabis clones using the clippings when they allegedly brought the salads containing cannabis clippings on a flight from Chicago to Memphis, Tennessee, and then drove over the border into Arkansas.
While it’s illegal to cross state lines with cannabis, lawyer Dustin Robinson points out that most state cannabis laws fail to provide legal cannabis companies with legit ways to procure source materials: “The marijuana licensee essentially has no choice but to violate federal law.”
But violating federal laws in the form of a cannabis-laden Whole Foods salad is probably pretty unusual.
Feds trump state laws
While some states like Pennsylvania have included starting materials in their frameworks, the Harvest complaint argues that federal laws hold more weight than state laws — and all of this confusion adds another layer of risk to the forthcoming M&A activity we’re anticipating.
“It is a bedrock principle of the United States Constitution that federal law is the supreme law of the land,” it reads. “State laws that are flatly inconsistent with constitutionally authorized federal law have no force or effect.”
Of course, if you are going to be traveling with starting materials, make sure they are kept company by a delicious, nutritious, organic Whole Foods salad…