Vertical federalism, horizontal federalism, and legal obstacles to state marijuana legalization efforts.

Author:Denning, Brannon P.
Position:Western Reserve University School of Law Interdisciplinary Conference on Marijuana, Federal Power & the States


This Article highlights the tension between marijuana legalization efforts, on the one hand, and the continued criminalization of marijuana at the federal level on the other. I argue that the uncertain preemptive effect of federal law on more liberal state laws poses a threat to other states' experimentation with recreational or compassionate use regimes. I further argue that constitutional doctrines, like the Dormant Commerce Clause Doctrine, which are intended to preserve political union by interrupting cycles of discrimination and retaliation, could, ironically, hamper state efforts to minimize spillover effects resulting from legalization of marijuana. The Article concludes with suggestions how Congress could play a positive role, as it did during the national debate over alcohol policy that preceded Prohibition.


As recently as a decade ago, legalization of marijuana for both medical and recreational use seemed (forgive me) a pipe dream. Today, Colorado and Washington allow marijuana for personal and medicinal use. Seventeen states and the District of Columbia have decriminalized possession for personal use. Twenty-one states permit the possession and use of marijuana for medical purposes. Public opinion is shifting rapidly as well: three-quarters of Americans support decriminalization for personal use of marijuana (1); 58 percent favor legalization. (2) The United States appears to be close to a tipping point in the debate over legalization. Legal obstacles remain, however, as evidenced by a recent suit filed by Nebraska and Oklahoma, asking the Supreme Court to exercise its original jurisdiction and enjoin Colorado's legalization regime. (3)

The most important of these obstacles is the Controlled Substances Act ("CSA"), which classifies marijuana as a Schedule I drug and bars its production, sale, and possession. The tension between permissive state regimes and the federal ban has been only partially eased by a 2013 memorandum in which the Department of Justice outlined its enforcement priorities and promised, in effect, to permit state legalization experiments to continue as long as the states policed themselves and minimized spillover effects in other states. (4) Nevertheless, the fact that cultivation and sale of marijuana remains illegal under federal law has created legal uncertainty, causing numerous problems for businesses, especially in the areas of banking and insurance. (5)

Moreover, as the suit by Nebraska and Oklahoma highlights, there is considerable uncertainty surrounding the preemptive effects of the CSA on state legalization efforts. Because Colorado and Washington legalized marijuana in the face of continued federal criminalization, the states' efforts present questions of "vertical federalism"--"how power is or should be allocated between the federal and state tiers of government, and how to prevent the federal and state governments from encroaching on each other's prerogatives." (6)

Other aspects of legalization raise questions of "horizontal federalism," which Professor Erbsen has described "as encompassing the set of constitutional mechanisms for preventing or mitigating interstate friction that may arise from the out-of-state effects of in-state decisions." (7) Horizontal federalism doctrines are frequently described as designed to combat externalities and spillover effects. (8) Colorado, for example, restricts the amount of marijuana that out-of-state residents can purchase per visit to a licensed dispensary in an effort to minimize spillovers. (9) Such differential treatment, however, could garner Dormant Commerce Clause challenges, (10) as did efforts to combat the importation of alcohol into dry states before the passage and ratification of the Eighteenth Amendment. (11)

Of course, as Erbsen notes, vertical and horizontal federalism questions are often intertwined because "federal power is a mechanism for restraining state power." (12) He notes that "federal institutions play a coordinating role in the exercise of concurrent state authority" by approving interstate compacts, for example. (13) In addition,

some grants of exclusive or preemptive power to the federal government serve both a vertical allocation function and a horizontal conflict avoidance function. For example, Congress's power to regulate interstate commerce both establishes federal supremacy over a national market and allows Congress to intervene when regulation of regional markets by multiple states creates a possibility of excessive friction. (14) State legalization--and the recent suit by Oklahoma and Nebraska--furnish a vivid example of how these concepts quickly meld. Despite a certain artificiality, I will use the concepts of vertical and horizontal federalism as frames for particular aspects of the legalization debate I wish to explore in this Article. This Article examines the challenges that vertical and horizontal federalism doctrines pose to the ongoing legalization experiment and suggest a role for Congress (and perhaps the Supreme Court) to play in facilitating--as opposed to inhibiting or retarding--that experiment.

Part I examines the effect of federal law, under which marijuana is still illegal to produce, possess, or purchase, on state laws legalizing it. Part II discusses how horizontal federalism doctrines could inhibit states that legalize from trying to prevent spillover effects in neighboring states that have chosen not to adopt a more liberal regime. Here there are some lessons to be learned from the last intoxicant to pit states against one another and the federal government: alcohol. Finally, Part III closes with suggestions how the federal government could play a constructive role in the legalization experiment.


    1. Preemption Generally (15)

      1. Express Preemption

        Under Article VI of the Constitution, treaties made by the United States and "the Laws of the United States which shall be made in Pursuance" of the Constitution are the "supreme Law of the Land," notwithstanding contrary state laws or state constitutional provisions. (16) If Congress exercises its valid legislative authority, conflicting state laws must give way. (17) Easy cases include those in which Congress included explicit language preempting contrary state law. (18)

        But Congress's intent is not always so unequivocally stated. As the Court has noted,

        Absent explicit pre-emptive language, we have recognized at least two types of implied pre-emption: field pre-emption, where the scheme of federal regulation is '"so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,"'... and conflict pre-emption, where "compliance with both federal and state regulations is a physical impossibility,"... or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." (19) The Court's "ultimate task in any pre-emption case is to determine whether state regulation is consistent with the structure and purpose of the statute as a whole." (20)

      2. Implied Preemption

        Where Congress has not expressly preempted state legislation, the Court has found an implied intent to preempt in two broad categories of cases. Field preemption "reflects a congressional decision to foreclose any state regulation in the area, even if it is parallel to federal standards." (21) Conflict preemption, on the other hand, impliedly preempts state laws that either make compliance with state and federal law impossible (impossibility preemption) (22) or, if compliance with both is possible, nevertheless presents an obstacle to one or more congressional purposes (obstacle preemption).

        Obstacle preemption is more subjective than impossibility preemption. In obstacle preemption cases, compliance with both federal and state regulatory regimes is possible, but in some cases the state regulatory choices are inconsistent with or harmful to broader federal policy objectives set by Congress. For example, in Crosby v. National Foreign Trade Council, (23) the Court invalidated a Massachusetts law prohibiting the Commonwealth from contracting with companies that did business with the government of Myanmar. Because Congress considered and rejected much more wide-ranging penalties for companies currently doing business in the country, choosing instead to prohibit only new investment, the Court concluded that "the state Burma law [was] an obstacle to the accomplishment of Congress's full objectives under the federal Act." (24)

    2. The Prohibitory Federal Regime

      The Controlled Substances Act of 1970 classified marijuana as a Schedule I drug for which no medical uses existed and banned its production, transfer, and possession. (25) Under the federal regime, "all marijuana use is considered 'drug abuse,'" its Schedule I classification "reflecting] the view that marijuana is dangerous and lacks any redeeming qualities." (26) There are a number of ancillary laws, too, criminalizing various activities associated with marijuana production or transfer. (27) To put it mildly, the prohibitory federal regime is in considerable tension with the laws of states that permit medical marijuana use or--in the case of Colorado and Oregon--have legalized it completely.

    3. What Is the Preemptive Effect of the CSA on State Legalization Regimes?

      So what is the effect of the near-complete federal prohibition on marijuana production and transfer on the more liberal state regimes? Until recently, the conventional wisdom was that states were simply unable to liberalize...

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