The role of litigation in creating a new industry

It may sound idealistic or high-minded, but I strongly believe in the system of checks and balances created by the US and Missouri Constitutions. The three branches of government are placed in equal but opposite positions in order to prevent our systems from being used to advantage one group over any other. Corruption may occur, but it can be stopped through the oversight of the other two branches.

As cannabis law develops around the country, a patchwork of state laws and regulations is forming. The state legislatures and executive departments are creating their own sets of standards and practices without much guidance or continuity. This can lead to arbitrary or impractical regulations like the recent emergency rule preventing payment of fees in cash, determining publicly held companies have to do background checks on anyone who owns even a portion of stock, or the application process that resulted in so many denials for technical rather than substantive reasons.

The court’s role in all of this development is to prevent the regulators from exceeding their rulemaking authority, overturn legislation that violates the Constitution, and protect the rights of the individual business owners and patients. They do this by determining the outcome of individual claims and applying that outcome to future similar cases. The court is also able to overturn specific laws or regulations based on a violation of the Constitution in its plain language. For example, if a regulation specifically prohibited a dispensary from selling a topical product, that would conflict with the plain language of the Constitution. Any seller or industry group would be able to challenge the regulation on its face. Either way, there needs to be some interested person who is willing to take the time and expense of challenging the language in the court.

In Missouri, we have placed the regulatory authority for the Department in our Constitution. Regulators are tasked with balancing many different interests, including that of the Department. They may attempt to create regulations and interpret the Constitution in ways that make is very difficult for Missouri to have a viable cannabis industry. The best path for holding them accountable is to appeal their decisions and the decisions of the Administrative Hearing Commission and to challenge their regulations on an individual basis.

The strength of our Constitutional amendment means there is little the legislature can do to rein in regulators or try to undermine the clear desire for a cannabis market in Missouri. However, that does not mean they will not try. As new legislation is introduced, it is important to keep in mind the possibility of bringing suit to stop its implementation. As someone who has worked in the legislature for nearly twenty years, it amazes me how many times legislation makes it through the process that could be easily overturned if someone was harmed by it and had a desire to pursue that path.

The court will play an increasingly important role as we move forward. Only the court can look at individual cases and determine if a particular licensee has been unfairly treated. Only the court can quickly and permanently remedy unconstitutional or biased systems. However, the court cannot take any of this action on its own.

   

The business owners, patients, and industry leaders in Missouri need to be prepared to stand up for their rights not only under Article XIV of the Constitution, but also under the equal protection and due process clauses. There may even be procedural violations that occur. All of these can be ways to stop an arbitrary or impractical provision from being implemented.

However, it will be important to have experienced legal counsel involved in these cases. Constitutional law is a different area than business law or criminal law. There are special rules and requirements that need to be taken into account from the filing of the first petition or appeal. A record of denials needs to be kept starting from the very beginning. All of these factors can affect the final result from the court.

Missouri is lucky to have a court that respects the Constitution and its role in the government process. If the industry is ready to play its part, the court will act as the final check and balance as the cannabis industry takes shape in our state. This is not an opportunity that should be ignored.

Sharon Geuea Jones is a lobbyist and attorney in Missouri. She has advocated on behalf of her clients in the legislature since 2002. After the recent adoption of the medical cannabis amendment in Missouri, Sharon began assisting clients in understanding and forming the regulations for the new industry. She has written multiple articles for professional publications, and is a frequent speaker on issues of advocacy and legal strategy. She currently resides in Columbia, Missouri. You can learn more on her website www.jonesadvocacy.co.