So you want to sell marijuana across state lines
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Just a quick heads up. This episode contains details about buying and selling marijuana. This is planet money from npr.

Do you want to put you pet the back?

Yeah, a few weeks ago that a china and I were driving around word southern organ mats in his forties, kind of a burly guy, salt pepper beers.

So we're pulling into the ARM right now and .

we're driving IT because he wants to show me something will .

have to go check in because you have to sign in and make sure you have .

idea all that I get through chicken, then we drive up progressive hill and park right beside some giant more plants.

These are not even big, big plants in organ scope. I've seen twenty, twelve.

seventeen v tall is really .

eight feet.

It's kind of like being at one of those giant corn mazes. But instead of corn, it's all we where are .

we right now in the harvest?

We're at the tail end of harvest.

We're at the end of what is known as crop tober. It's of a beauty hectic season. Think thanksgiving.

But for weed, except this year and for a few years, actually, there has been so much weed that it's not even worth harvesting. All of IT. They just leave perfectly good weed in the field to rot.

You're going to leave some of IT.

You think in the feel well know all of these like all of these little things are just they're not worth messing with. But if we are in ninety ninety six in a high school kid came through here, he d think he died and went to heaven .

because there's still a lot of way here.

There's time. I mean, they're be enough to wear him and all his friends would have the best time ever. Yeah, there's literally tons.

There's literally tons of usable weed just being left in marijuana fields all over the state of organ because that says there aren't enough buyers. There's just over four million people in the state. And so far this year, farmers have grown eight point eight million pounds of weed, which means that there is nearly a pound of dried smokily weed for every single person in the state of all. Again.

which is good if every men, woman, person and child wants a pound of weed, but bad if you're trying to sell IT. The sale Price in the last couple of years has plummeted.

The nature of long time organ growers was like every gram was worth five, ten bucks and now it's like a gram of finish flower ers like a dollar.

So yeah, it's been a tough few years for marijuana farmers. Some farms have had to drastically produce how much we they grow, or just stop growing IT altogether. And for what they do grow, they have to make a calculation is IT worth IT to pay to harvest and process and store all of this marijuana. If not enough, people are going to buy IT.

And so you're always playing with these ratios of like do we really have to watch twenty percent of our flower rock just because we totally crushed IT growing like it's brutal.

It's hard in the state of organ. There is a gut of grass, a wealth of weed.

It's a chronic crisis.

No, going to play the money. I A A chic.

and I say one that I .

can only have some straight forward solutions for organs over abundance problem, trade too much supply, find somewhere with demand.

But organs, marijuana can only be sold in, or again, no one in any state can legally sale across state lines, because even though IT is legal in many states, IT is still illegal, according to federal law.

Today on the show, how a product being a ously legal and illegal creates some unique business problems, and how one weed entrepreneur, r and his lawyer, are trying to fight these problems with the U. S. constitution.

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Manor joa thinks the solution to organs glut of marijuana is pretty straight. Ward just sell IT to people who want IT outside of the date.

He thinks this because he used to sell marijuana outside of the state. A lot of marijuana.

Little back story on mad. He grew up in rural organ. His neighbors were weed growers and weed smokers.

Weed was always like the were not really doing drugs. We're just smoke and weed .

in about this one neighbor .

in particular.

Butch, okay, what was much like he was cool.

We go over there and be like, huh, why do they have an underground bunker that they live in? And why is everybody go in IT when the airplane, the flower? So he is just like happy and like just little paranoid .

at a bunker. Yeah, totally. As matt gets older, he wants to make some extra money, starts to learn how to take a bunch of weed bag IT up and sell IT .

to the other kids at his high school. I remember being so nervous going to the safeway.

buying back, making a sandwich.

Yeah, yeah.

By the time matt is in his twenties, he learned a lesson that shapes his career. Going forward, he can make a lot more money if he takes the local organ weed and drives in too far away places that don't have IT but want IT. That is.

learning about supply and demand and the value of interstate commerce. So trafficking marijuana across the U. S. Becomes his full time job, like hundreds of pounds at a time.

And this was at a time when if you got caught trafficking marijuana, you are facing a lot of jail time.

Did you ever run into any actual trouble with of the transporting?

Just once I was december two thousand and four.

matt was in michigan driving a van with about five hundred pounds of weed packed into cardboard boxes.

I get on the freeway, and as soon as I hit the on ramp, there's the cop car, four lanes over and IT goes to to, to to behind me.

Police officer polls met over.

He has me stand in front of my van, and he opens the sliding door of the van, and he grabs one of the boxes and he flips the lid back and he looks up at me and I go. I ran, you ran a boston for .

one maculate moment. There is no traffic match, springs across the freeway. Officer follows him that makes IT to a fence, jumps over, finds themselves in a neighbor ood, ends up hiding behind some garbage cans, talked between a couple of houses.

And then I hear sirens everywhere. I was like, how could there possibly be this mini cops?

He takes off his jacket, puts IT in his hand and tried to walk as non slotted as possible onto the residential street.

Then he sees another police car.

They go by me, I wave, you wave, they go by. Then they slam on the breaks.

They throw IT in reverse. He tries running again. He surrounded.

This is pretty bricking. Got to have just gonna not not everyone would come out OK in the situation.

yeah. And he does get arrested that ends up spending thirty seven months in federal prison, three years away from his family .

and missing his girls growing up. Now, okay, matt never actually thought that marijuana was wrong or or bad, but he does start to see things a little bit differently. Once he's in prison.

I have the realization there's just rules. There's just rules to society, just like those rules to games. You can use your hands and soccer because you can't use your hands and soccer you can't sell. We do your friends because it's illegal, you know, like it's just that all there is to IT.

He does his time. Then in two thousand and seven, matt gets out of prison and he's determined to never go back. He decides to become illegal, non marijuana, just Normal business man for match back cooman organ. That means building, selling and renting out geodesic domes of all things.

Know what a geodetic dom is.

It's not a weak thing. It's just this corky structure, a way in twenty fifteen organ legalizes marijuana for recreational use. And matt is thrilled organ .

will be able to do what he does and people will be to like, you know, be out and open about what we've been doing forever. Like IT was like, awesome. He gives up the geodesic .

done business, and now he can go back to doing what he knows and what he loves working in cannabis, this time legally, sets of the company called jeffson packing house. And he's not gonna grow the weed himself. Instead, his company offers mariana farms a bunch of services like organizing creese to help with planting .

and harvesting. yeah. But the main service his company offers is warehouse space, where his team will take harvested marijuana and dry IT trimmed packet. Basically, they turn fresh marijuana plants into something.

Celeb math warehouse is in medford. Organ used to be for fancy pairs. Now IT is for weed, is twenty .

thousand square ET. It's three separate buildings. And then these, these are shipping containers.

These are ever Green shipping containers.

We brought those in. Each one has a freezer unit on the back.

Growers that matt works with are keeping their product in these shipping containers for cold storage.

Now federally, this is all still technically illegal. Marijuana a is classified as in the legal substance under the federal controlled substances act. So the D. A, the drug enforcement administration could show up at any moment, kick down the door and arrest everyone. I know they don't, and they almost certainly won't, but legally they could.

Smells lot like we've here IT smells .

like we've here.

We walk inside the warehouse, and there we meet one of math workers woman named Cindy. Cindy is wearing a crown in some Greens. This sort of track, I guess, track at all her a not her usual attire, was alloweth.

Now that he preferred that we not use her last name, he knows marijuana a is illegal federally. SHE doesn't want her name. And some national public radio show anyway, he offers to show us some of the finished products being stored in the warehouse.

We step into this little makeup room and it's filled with shelves of package ready for market marijuana products. You have crumble sources country, you have sugar wax, you have live resin, and then you have diamonds. Yeah, all all the different ways that you they can process. And then you also have shatter.

shatter.

what is that? Which is another smoke ball, which is way processing so many options.

And here at math warehouse, with all these different marijuana products, you can really see the attention between the federal laws that say marijuana is illegal and the organ laws that say not to know legal.

Like, let's say, i've got my amazing new crumble that I want to bring to market, and I named IT. We wait for IT planet. funny.

So I got a trademark .

for that brilliant named in organ. But I can get one that works for the entire country. So someone in like nava, they could just copy my name, saw their own planet funny crumble.

But but you can't. Trademark marijuana products is a federal trademark, and you can apply a federal trademark to a federal illegal product. So currently, you can take somebody to court if they knock off your product .

and is not just tradeMarks, all of this federal stuff that usually exist to support businesses they are not available to. Man.

like if match company, all of us and failed and he wanted to file for bankrupcy.

he can't. Or if matt wants to hire farm workers who come in on federally granted visas, that is not happening. And because like federal income taxes are paid to the federal government, IT is also very hard for take growers storing their weed with mat to write off many of their expenses. They generally cannot write off their payroll or their farm equipment.

Then there's banking. Banks have to follow federal regulations. They are forbidden from serving companies that deal analyst IT products.

Matt has opened account in six different banks that each and every time, eventually the bank just shut them down. So he does almost all the transactions in cash. Plus, it's nearly impossible for me to get a business loan.

But the big role in math way, the big role that math really cares about, is this rule about not being able to sell all of this apparently great unsold weed across eight lines.

So this whole stack over here is all last year's product that's still waiting to be processed.

okay? These are big black bins with yellow lids there, stacked six high. I don't know what that is possible.

Hundreds of them. And now there are plenty of other states where weed is not so plentiful, right? And and where doesn't even actually make sense to grow weed outdoors at all, like it's too cold or too hot or isn't enough rain, and growing weed indoors is expensive. So if only map could get his weed to those places, but legally this time.

for now, that is essentially running a skeleton of a company that he knows could be so much more. He's just waiting for the rules to change.

There's a point where you're just like there's nothing I can do right now except for bring IT back down as much as we can try and maintain the position and weight and its its draining.

But then someone brings math and idea for how to change the rules using the commerce clause in the U. S. constitution.

I love the .

commerce clause that's after the break.

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It's actually not just federal law that is preventing mat from selling marijuana to other states. Somewhat surprisingly, there is also an organ law that's preventing IT.

yeah. When states started legalizing marijuana, the U. S. Department of justice recognize that federally illegal, but legal in some states, created some weirdness. So they put out this policy memo saying that actually, they were only going to prosecute really bad weed. Stuff like, like selling weed to miners are starting weed games.

And according to that memo, one of those really bad things was taking weed from one state that has legalized IT and selling IT to another state. So to play nice with the federal government organ made IT a crime to sell organ weed to even another state that also had legalized IT. Actually, all states that legalized marijuana have laws like on their books.

Of course, if the federal government ended the prohibition of marijuana, this tension between federal laws and state laws would basically go away. But until that happens, there is potentially a legal way around this tension. A version of this work around is being put forward in organ by a lawyer named Andrew dewes, who found a surprisingly receptive audience for this idea in mat.

So I called that up and I said, matt, you know, i've got this idea and it's like, I mean, told him what that was.

Andrew specializes in highly regulated industries like cannabis. And he asked me if he'll be a plaintiff in this blaw suit against the state of organ.

And what does that mean to say that you're going to be a plaintiff? Like what what does that involve for him?

Well, um I guess IT involves him suing the state of organ and alleging that he wants to ship marijuana state in .

federal court.

which is odd position to to put yourself in. You know marijuana is still illegal under federal law.

Could he get in trouble? I don't know.

All right. The main point of their lawsuit is this a state compass, whatever blaws IT wants. But those laws cannot contradict things like the U.

S. constitution. And the constitution is pretty clear about who gets to make rules about inner state trade in this country. It's the federal government.

The commerce clause is caused in the constitution, which says congress is the one who regulates interstate commerce. I have a in front of, do.

do I? Dio, yeah.

Article one, section eight, class three of the U. S. Constitution gives congress the power to, quote, regulate commerce with foreign nations and among the several states and with the indian tribes.

And that's IT yeah.

that's pretty much IT.

It's pretty it's pretty short.

yeah.

The commerce class says the federal government gets to regulate commerce among all the states. So IT has enormous powers. Like take trucking. The federal government makes the rules about the trucks that drive between states, about the highways those trucks drive on, about the people driving the trucks.

But to Andrew, the important idea here is how the commerce class has been interpreted by the courts.

So the court to the commerce clause is something we call the dorm commerce clause.

the dorm commerce class fun. So okay, the commerce cost is about giving congress lots of power. When IT comes to state commerce, the dormant commerce clause is about limiting state's power. So keeping states from inner fearing too much with federal powers, right?

Like new york can't pass a law that says supermarkets in new york can only sell apples grown in new york state. No apples from like washington or from the jersey yet.

That would be a state restricting interstate commerce. Which status are not allowed to do. AManda has the right to buy an apple from any state that can grow an apple and ship IT to her supermarket.

Oh, and I will. Right, of course. Uh, so Andrew thinks the same standard should apply to marijuana. And actually this argument has already worked in a bunch of cases involving marijuana.

There was this recent lawsuit filed in maine. There was a law there that said only residents of maine are allowed to get licenses to sell medical marijuana. This was chAllenged by a business in delivery.

They wanted to buy a company that ran a few dispensary's and mean, but they were not allowed to. So they sued the state, arguing that the residency requirements limited interstate commerce that companies should be allowed to Operate in whatever state they want to. And the delaware company won dorman commerce clause for the win.

That's really what gave me the immediate impetus to to think about bringing the lawsuit to start talking to nat and so forth.

So Andrew and mat filed their lawsuit last year. We spoke with some legal experts, said, yeah, this strategy could work according to the dormant commerce clause. Oregon isn't allowed to put restrictions on interstate trade.

But this is a complicated case because, let's say, Andrew, the lawyer, and met the way entrepreneurs in, then what, according to organ law, mt. Would be able to drive, say, five hundred pounds of organ weed across the border into va. But he still can't sell IT there because nevada has a dm laws prohibiting the importation of out of state marijuana.

So to make this all work, some, you know, lawyer and weed entrepreneur, nevada, they would have to file a similar lawsuit against their state government and on and on and on in any other state that matt wants to export organ marijuana to which edw hopes will happen because he thinks, uh, that would be good for everyone.

We grow the best marijuana and we have the best mariana products, I would argue, in the world.

I wait all, I just, I just got a phone call from california. They would like to dispute that with you. I will .

dispute that all day.

Would you really okay for a for just .

have to .

wait to see what happens next with their last suit? But matt, who has the warehouse, he is already thinking through how big this could all get for him. First, it's snowed a then who knows how where could .

go off to some global destination? M, to them? Germany, anywhere, anywhere, really. I mean, yeah, it's the world to be open.

So long as the federal government says it's OK to export all of that weed, the congress law gives congress the power to regulate trade between the states and between the U. S. And foreign nations.

This epo de was produced by dave blanchard IT was engineer by Maggie lusa, docked by sirs and edited by key roman r. Our gold mark is our executive producer.

thanks to andry award, dori Roberts, Michael rosenbloom and bow with me. Special thanks this week to Robert micros adventure law school, who has written extensively about marijuana and the dormant commerce laws coming up next on plenty of money. I do hope I reach you with a good time to hear some of your opinions on how the economy is working for your household for decades, the university of michigan has been running a survey to measure. It's not the economy exactly, but really the countries vives about the economy.

Would you say that you and your family to think there are Better for financially than you were a year ago?

Lately, something seems to be broken. We are away worse about the economy than the data suggest. We should join us next time on planet money as we investigate this economic mystery. A Manda iron chic.

I'm everyone's Alice. This is A P. R. Thanks for listening.

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