Key arguments made by an Oregon cannabis business that the state unconstitutionally prohibits interstate commerce are no longer strong enough to prevail in court, according to the plaintiff’s legal counsel.
Andrew DeWeese, who represented Oregon cannabis wholesaler Jefferson Packing House in the lawsuit, dropped the case on June 17, providing the U.S. District Court for the District of Oregon with the plaintiff’s notice of voluntary dismissal without prejudice.
The complaint, filed in October 2025, had argued that Oregon’s adult-use cannabis law prohibiting the import or export of cannabis, including federally compliant hemp, violates antidiscrimination principles of the dormant Commerce Clause of the U.S. Constitution – a doctrine prohibiting state economic protectionism policies that favor in-state businesses and “unduly burden” interstate trade.
“Matthew Ochoa and I dropped the case yesterday because of the recent major developments in cannabis law since we filed the case – first the change in the federal definition of hemp in November 2025, then the Ninth Circuit’s decision in Peridot Tree that the dormant Commerce Clause does not apply to marijuana,” DeWeese said.
“These developments directly impacted the key arguments in our lawsuit and made it very unlikely that an Oregon federal court would grant the relief we were seeking, which was to invalidate an Oregon law prohibiting the import/export of marijuana,” he said.
In November 2025, Congress passed legislation to redefine hemp with a 0.3% total THC threshold, versus the delta-9 THC standard from the 2018 Farm Bill, which created a loophole for intoxicating hemp products to land on unlicensed retail shelves throughout the nation.
In January 2026, the U.S. Court of Appeals for the Ninth Circuit ruled in the Peridot Tree case that the dormant Commerce Clause does not apply to cannabis under federal prohibition, a decision that resulted from licensing schemes in Sacramento, Calif., and Washington state. The Ninth Circuit covers nine states, including Oregon.
The Ninth Circuit decision created a split with a First Circuit ruling from August 2022 that Maine’s state residency requirement for medical cannabis business owners was unconstitutional, and with a Second Circuit ruling in August 2025 that New York’s adult-use cannabis licensing structure, which favored applicants with past cannabis convictions under New York law, was unconstitutional.
The Ninth Circuit’s divergence set the stage for potential interpretation in the U.S. Supreme Court.
“Matt and I continue to firmly believe that the U.S. Constitution’s dormant Commerce Clause applies to all commerce, including commerce in marijuana, whether federally illegal or not, and we will continue the fight to legalize interstate commerce in marijuana,” DeWeese said. “The next key development in this area will likely be whether Peridot Tree’s case is taken up by the U.S. Supreme Court, because of the clear split between the circuit courts of appeal.”
Depending on that possibility, as well as the outcomes of the federal government’s forthcoming ban on intoxicating hemp products – set to take effect in November 2026 – and the Drug Enforcement Administration’s (DEA) administrative law judge hearing to reclassify cannabis as a Schedule III substance, the dormant Commerce Clause’s application to protectionist state cannabis laws will likely be revisited.
However, a potential Schedule III listing under the Controlled Substances Act alone would not automatically open the doors to national trade, because, under the federal Food, Drug and Cosmetics Act, it is unlawful to introduce a drug into interstate commerce that the U.S. Food and Drug Administration has not approved.
At the heart of the Jefferson Packing House complaint, if it’s cheaper or more efficient to process cannabis in an out-of-state market with similar legalization policies, then why should licensees be required to do so in Oregon?
On the other hand, if Southern Oregon represents the heart of a traditional cannabis farming bioregion that produces superior products in demand from out-of-state customers, then why should licensees be required to limit their distribution channels to in-state partners?
“Oregon law harms JPH by increasing its operating costs and preventing it from taking advantage of economies of scale,” Jefferson Packing House’s now-withdrawn lawsuit states, adding that Oregon law barring imports and exports of cannabis and hemp puts the company at “a competitive disadvantage” in the marketplace.
State law “discriminates against interstate commerce by nakedly prohibiting such commerce, without any legitimate, non-protectionist purpose, and is therefore prohibited by the dormant Commerce Clause of the U.S. Constitution,” the lawsuit states. “There is no constitutionally adequate reason for Oregon, or any other state, to bar the import or export of marijuana ... [or] of hemp.”
Federal drug trafficking laws that collide with the nation’s state-by-state cannabis legalization policies have played a big part in why state cannabis programs have reinvented the supply-chain wheel, requiring a seed-to-sale market within their borders.
But the U.S. Congress, not the states, has the power to regulate interstate commerce, the plaintiff argued in its now-withdrawn lawsuit.
The plaintiffs argued that “attempting to appease the perceived enforcement priorities of the federal government to induce the DOJ to continue its policy of nonenforcement of state-legal marijuana activities (which violate federal law equally as much as interstate commerce in marijuana) implicates fatal separation of powers concerns, as only Congress can authorize the states to regulate interstate commerce, not the DOJ, an agency of the executive branch.”
