Robin Shellow Attorney | NEW and INNOVATIVE Federal Defense in Marijuana Prosecutions | Wisconsin Criminal Defense Lawyer | The Shellow Group
The Shellow Group has a new approach to marijuana prosecutions.
innovative, marijuana, this bud is for you, bud, Criminal Defense Attorney, Wisconsin, The Shellow Group
21203
page-template-default,page,page-id-21203,edgt-core-1.0,ajax_fade,page_not_loaded,,hudson-ver-1.3, vertical_menu_with_scroll,smooth_scroll,transparent_content,blog_installed,wpb-js-composer js-comp-ver-5.1,vc_responsive
slider-heads-case-experience

1.888.SHELLOW • MILWAUKEE, WI • 414.263.4488 • THE SHELLOW GROUP

The Shellow Group’s NEW and INNOVATIVE Defense for Federal Marijuana Prosecutions

The Government overlooks or ignores that agencies of the federal government have entered into agreements to regulate, list, buy and sell Marijuana.

Perhaps the Government would have been shaken awake — from its ability to see only standard Controlled Substances Act (CSA)-based attacks — by this headline: “The Securities and Exchange Commission (SEC) approves Heroin IPO on NASDAQ?”

The Government is not shaken awake by the well-known fact that marijuana-backed securities are the only Schedule I securities whose stocks are traded on NASDAQ and the New York Stock Exchange (NYSE); or by today’s headlines, reading: “Pot Stocks are Soaring Again with Tilray Surging 40% in Early Trading” (Exhibit 1); or by yesterday’s headlines screaming only that “Coca-Cola is Eying the Cannabis Market” and considering a move into a functional wellness beverage that “treats pain but doesn’t get you high” (Exhibit 2); or by the headlines of two weeks ago, which screamed only that “Corona Brewer Bets $4 Billion on Cannabis Startup” (Exhibit 3); or by headlines from later last month reading “Constellation Brands and Molson Coors are in. Now the cannabis world is wondering who’s next” (Exhibit 4); on July 8, 2018, the headline read “FDA Rejects Petition to Further Restrict Marijuana”;

The U.S. Food and Drug Administration has denied a request from an anti-legalization group to place marijuana and its derivatives on a list of restricted substances that are not generally recognized as safe.
(Exhibit 5)

Barbara Carreno, public affairs representative of the Drug Enforcement Agency (DEA), stated to Business Insider and Forbes Magazine that a marijuana component, Cannabidiol (CBD), now “absolutely has to become Schedule 2, 3, 4, or 5” within 90 days of the FDA’s licensing of the drug Epidiolex, a drug which treats epilepsy. As of today’s writing the Forbes article had roughly 13,500 views. Also, as of this writing, that re-scheduling has not yet occurred. As of September 19th, 2018 investors and others still believe that marijuana will be rescheduled within days — again demonstrating that no one has notice as to when and whether marijuana laws are changing. (Exhibit 5)

In summary, these headlines show that the market has exploded with different kinds of products that contain marijuana, which is still listed as Schedule I on the CSA, but whose distribution is aided and abetted and regulated by the SEC and the FDA.  The products that contain the Schedule I controlled substances come in three categories: THC-infused recreational beverages, CBD-infused health/wellness products, and CBD-infused pharmaceuticals.  But the congressional record does not show how Chairman Jay Clayton, of the SEC, is legally permitted to list Schedule I drugs on the NYSE and NASDAQ, where tens of thousands of financial transactions a day involving marijuana companies occur before, during and after the hours that the exchanges are open.  Still, he is not prosecuted under the CSA for listing them and assisting those companies in making millions of dollars from securities backed by actual marijuana, which are owned by Americans and licensed in Canada.  It appears that the legality of his actions may be in question, and that he – along with many commission and department heads in the federal Government – should be consulting lawyers.

This author listened attentively to the recent Supreme Court nomination hearing, where not one person stood up and asked the following hypothetical question: If Jay Clayton gave the green light to list almost a dozen Schedule I drugs on NASDAQ and NYSE – is Jay Clayton going to prison?

The Government asserts that Americans have fair notice of CSA’s prohibitions. After Defendant’s opening Brief, it would have been prudent for the Government to give Jay Clayton a call and advise him: Interstate commerce involving marijuana is illegal — Marijuana is contained in Schedule I of the Controlled Substances Act.

Clearly our stock exchanges are either engaged in, or part of, interstate and foreign commerce involving marijuana.  Without question, the CSA could reach them.   But we may not construe SEC’s to-date failure to prosecute marijuana-based security trading as abandonment of all such prosecution in the future.

On September 5th, 2018 the SEC issued a stern warning about marijuana stocks titled “Investor Alert: Marijuana Investments and Fraud”, part of which reads as follows:

If you are thinking about investing in a marijuana-related company, you should beware of the risks of investment fraud and market manipulation…Fraudsters may try to use media coverage about the legalization of marijuana to promote an investment scam. (Exhibit 6)

Good to its word and consistent with the SEC’s mission, the SEC charged Texas-based Greenview Investment Partners L.P. with allegedly defrauding investors, by promising 24 percent annual returns from cannabis-based investments. (Exhibit 7)

To put it more bluntly, money is being invested by American individuals and American companies in Canadian pot companies, which are then investing in American markets. Green Thumb Industries is a Chicago-based, Canadian-listed cannabis producer operating in 8 U.S. States where cannabis has been legalized, and yet Defendant is being prosecuted for similar conduct only on a much smaller scale. (Exhibit 8)

While investors in cannabis industries certainly appreciate the fraud warnings given to a particular company, none of the investors have been warned that THC is a listed Schedule I drug and still very much illegal.

Not a single federal cannabis prosecution should go forward until the Due Process and Selective Prosecution issues are addressed by someone in the Federal Government.  Defendant is not asking this Court to re-schedule, de-schedule or un-schedule marijuana—just dismiss the indictment. Does it make any sense at all—is it rational? – that if Defendant had been arrested in Washington D.C., the pre-trial service employee who aides the Court in setting release conditions might not himself be subjected to employee drug-testing for marijuana because it is legal in the District of Columbia? (See Fairness in Federal Drug Testing Under State Laws Act, H.R. 6589) The current state of marijuana laws in the United States are so confusing and irrational that not a single citizen has notice of what is and what is not illegal. While marijuana companies are listed on the exchanges, the Customs and Border Protection Agency (CBP) has loudly announced that if you invest in a marijuana company and fail to disclose it when crossing from Canada to the United States, the traveler is subject to a lifetime ban on entry to the United States, and yet the marijuana companies remain listed on NASDAQ and NYSE and their money crosses that border thousands of times per day. (Exhibit 9) Defendant is not asking the Court to intervene with the mess created by the alphabet soup of agencies, but rather declare the current status of marijuana laws a complete contradictory and irrational mess that deprives Defendant of fair notice as to which marijuana transactions are prohibited and which are not, as well as the penalties he is facing. One agency of the federal government—the FDA — has declared marijuana NOT a restricted controlled substance; another—the SEC – continues to aid in financial transactions for what the CSA has declared a restricted controlled substance.

Both health and wellness CBD-infused product manufacturers and distributors, and THC-infused beer and liquor manufacturers and investors, are making a killing in the market by distributing the same prohibited substance as the Defendant. The difference? The Defendant faces massive deprivation of his liberties, whereas his corporate counterparts worry only about “Fortunes Made and Lost on Weed in Wildest Single Day of Trading.” (Exhibit 10)