This case is a major win for the cannabis industry.
Although importing drug paraphernalia is illegal under the federal Controlled Substances Act (CSA), the United States Court of International Trade (CIT) recently held that cannabis paraphernalia could be lawfully imported into Washington state pursuant to a statutory exemption never before recognized by a federal court.
The CIT reached this decision when analyzing a case in which Customs and Border Protection (CBP) excluded from entry at the Port of Blaine, Washington, cannabis-trimming equipment on the grounds that the goods constituted drug paraphernalia prohibited under the CSA.
In assessing the interplay between federal and state laws governing cannabis-related drug paraphernalia, the CIT concluded that the equipment could lawfully enter the state because Washington law expressly authorizes the possession, distribution, and manufacture of marijuana-related drug paraphernalia, thereby triggering the federal authorization exemption at 863(f)(1).
Below is a summary of the main factors considered by the CIT in assessing this dispute, which presented a matter of first impression.
Legal Background
- Federal Prohibition On Drug Paraphernalia
Pursuant to 21 U.S.C. § 863(a), it is “unlawful for any person (1) to sell or offer for sale drug paraphernalia; (2) to use the mails or any other facility of interstate commerce to transport drug paraphernalia; or (3) to import or export drug paraphernalia.” (Emphasis added.)
“Drug paraphernalia” is broadly defined as “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance.” 21 U.S.C. § 863(d) — When determining whether an item falls under this definition, federal agents consider eight factors listed under 21 U.S.C. § 863(e).
Therefore, as a federal agency in charge of enforcing federal importation and exportation laws and regulations, CBP is tasked with prohibiting entry and seizing drug paraphernalia.
However, 21 U.S.C. § 863(f) contains two exemptions to this prohibition, one of which applies to “a person [ ] authorized by local, State, or Federal law to manufacture, possess, or distribute such items[.]” (Emphasis added.)
- Washington State Exemption To Federal Prohibition
In 2012, the state of Washington legalized the adult recreational use of marijuana and amended its prohibition on drug paraphernalia to expressly exclude marijuana from the definition of “drug paraphernalia.” See Initiative 502 to the Legislature, 2013 Wash. Sess. Laws ch. 3 (codified as amended at RCW 69.50.101-710).
Factual Background
Eteros Technologies USA, Inc. (Eteros) attempted to import parts of the “Mobius M108S Trimmer,” equipment designed to separate the leaf from the flower of cannabis and/or other plant material, through the port of Blaine, Washington.
Upon its arrival at the port of entry, the equipment was seized by CBP as the federal agency questioned its intended use and whether the subject merchandise would “be used at any point, in any way, to manufacture, produce, or process a product that has a [THC] concentration over 0.3 percent.” — In other words, CBP questioned whether the equipment met the definition of “drug paraphernalia” under the CSA; and thereby, whether it contravened the import prohibition.
In its response to CBP’s Request for Information, Eteros explained that the equipment did not qualify as “drug paraphernalia” because the primary intended use of the Mobius M108S Trimmer was with hemp, not marijuana, and even if the Mobius M108S Trimmer qualified as “drug paraphernalia” under § 863(d), the exemption established in § 863(f)(1) rendered § 863(a)(3)’s import prohibition inapplicable in light of the state of Washington’s legalization of marijuana and marijuana-related paraphernalia.
CBP rejected Eteros’s argument, so, in response, Eteros initiated this lawsuit.
The Court’s Reasoning
The CIT’s analysis focused on whether the state of Washington’s repeal of certain prohibitions regarding marijuana-related drug paraphernalia “authorized” the importation of the Mobius M108S Trimmer.
Specifically, the court closely analyzed the CSA and Washington state’s equivalent, but also considered and applied Murphy v. NCAA, a Supreme Court case where the highest court held that New Jersey’s sport-betting law “authorized” sport gambling and held that a state’s repeal of a prior prohibition constitutes an “authorization” of that previously prohibited conduct, and concluded that Washington law authorized the importation of Eteros’s trimmer and deemed CBP’s seizure unjustified.
Implications
This case is a major win for the cannabis industry — thanks to Richard O’Neill from Neville Peterson LLP, who brilliantly argued this case — in that it suggests that the importation of cannabis paraphernalia is allowed so long as its entry occurs in a state where cannabis is lawful and exempt from the state’s CSA.
If unchallenged by the U.S. government (which seems unlikely), this case would set a national precedent that would open up the importation (and likely the exportation) of currently federally prohibited drug paraphernalia. This is an exciting prospect for cannabis stakeholders, who for too long now have been faced with unfair and onerous challenges in importing cannabis paraphernalia.
Tags: Case Law Drug Paraphernalia Legislative Updates New Drug Trends