Seyfarth Synopsis: The Tenth Circuit is set to decide whether workers in Colorado’s legalized marijuana industry are entitled to wage and hour protections under the FLSA. 

The Fair Labor Standards Act (FLSA) is the federal statute that provides wage and hour benefits to certain employees.  On the other hand, the Controlled Substances Act (CSA) is a federal statutes that categorizes marijuana as a Schedule I drug, meaning it is illegal under federal law.  Simple possession (let alone participating in its manufacture and distribution) is illegal, irrespective of state law to the contrary.  In the wake of widespread legalization of recreational marijuana in states across the country, a questions has arisen as to whether the FLSA was meant to provide wage and hour protections to employees of businesses engaged in the manufacture or distribution of Schedule I drugs under the CSA.

Background

This question has been put to the test in Kenney v. Helix TCS, Inc..  In Kenney, an employee of Helix, which provides armed security and transport services for businesses that grow and distribute marijuana, filed a putative collective action against Helix under the FLSA.  Kenney claims that Helix misclassified him, and similarly situated employees, as exempt and owes them overtime wages.  In response, Helix moved to dismiss the action, arguing that Kenney is not entitled to the protections of the FLSA because he is employed in the marijuana industry, which is entirely forbidden under the CSA.

The District Court denied Helix’s motion to dismiss.  The Court observed that Helix did not cite any cases in support of its theory, while Kenney relied on Greenwood v. Green Leave Lab LLC, which held that a plaintiff employed in a marijuana-testing laboratory under Oregon’s recreational marijuana law was entitled to protections under the FLSA, notwithstanding the CSA’s prohibition on marijuana.  Further, the Court held that businesses are not precluded from complying with federal laws because their business practices may violate other federal laws.  Nonetheless, the Court certified the ruling for immediate appeal to the Tenth Circuit with respect to the issue of whether Kenney is a covered employee under the FLSA. 
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A Colorado federal jury sided with the owner of a state-licensed cannabis cultivation business last Wednesday in a federal Racketeer Influenced and Corrupt Organizations Act (RICO) suit brought against him by his neighbors.

In 2015, Michael and Hope Reilly brought a federal RICO lawsuit in Colorado against Parker Walton and his cannabis cultivation operation that

Earlier this month a Colorado gardening supply house was fined by the United States Environmental Protection Agency for selling repackaged and unlabeled pesticides.  Is this a warning shot at the cannabis industry by the Trump administration, as some have suggested?  Probably not, just business as usual. 
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Welcome back to The Week in Weed, your Friday look at the world of legalized marijuana.

Nebraska and Oklahoma may not have had their day in (Supreme) Court, but they are

Welcome back to The Week in Weed, your Friday look at the world of legalized marijuana.

Microsoft is welcoming marijuana compliance company Kind Financial onto its Azure Government cloud platform, marking a legitimizing first for the legal cannabis business while positioning the technology

Welcome back to The Week in Weed, your Friday look at news in the world of legalized marijuana.

Various outlets have been reporting on the study done by the AAA Foundation for Traffic Safety on the increase in fatal car

Two years after Colorado amended its constitution to legalize and regulate the recreational use of marijuana, in December 2014, the states of Nebraska and Oklahoma filed a motion in  the U.S. Supreme Court for leave to file a complaint against the state of Colorado, ultimately seeking to invalidate portions of Colorado’s constitutional amendment concerning marijuana and to enjoin its implementation.

Upon request by the Supreme Court, the United States submitted an amicus brief in support of its views on the enforcement of the Controlled Substances Act (“CSA”) in states wherein the sale and distribution of marijuana has been de-criminalized.  After citing to memoranda from 2009 and 2013—in which the Department of Justice provided instructions in reviewing the prosecution of CSA violations related to marijuana use in these states—the DOJ expressed the view that the Plaintiff states’ motion should be denied.  The United States proposed denial of the motion because the case was not “appropriate… for the exercise of [the Supreme Court’s] original jurisdiction” and “[e]ntertaining the type of dispute at issue here—essentially that one State’s laws make it more likely that third parties will violate federal and state law in another State—would represent a substantial and unwarranted expansion of [the Supreme Court’s] original jurisdiction.”

The United States continued by citing Supreme Court precedent related to the Court’s original jurisdiction in disputes between or among states.  “The model case for invocation [of such] is a dispute between States of such seriousness that it would amount to casus belli if the States were fully sovereign” (emphasis added).  The United States rejected the idea that the case at bar fell into the above category, and provided examples where original jurisdiction was found (e.g., claims that an agent of the defendant state was engaging in environmental harms against plaintiff state).  Further, the United States argued that original jurisdiction is proper only where one state’s actions amounted to the direct cause of harm to another state.  Essentially, the United States argued that the Supreme Court should hear cases only where one state’s actions were the direct cause of another state’s harm.  The Plaintiff states’ contention that the de-criminalization of the sale and distribution of marijuana in Colorado would increase the amount of third-party crime in their states simply did not meet the referenced standards as Colorado did not direct or authorize such action, the United States argued.

Moreover, the United States appeared unpersuaded by the Plaintiff states’ assertion that the Supreme Court was the only venue in which they could sue Colorado.  However, the United States pointed out that the states could engage in suit at the district court level, and noted that two suits raising the issues at bar were pending in the District of Colorado courts. 
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Welcome back to The Week in Weed, your every Friday look at news from the world of legalized cannabis.  The biggest news is that the Supreme Court decided not to hear a case brought by the states of Nebraska and Oklahoma against the state of Colorado, concerning Colorado’s legalization of marijuana.  There are any number