A judge has ruled that Montana's medical marijuana law doesn't shield providers of the drug from federal prosecution, delivering a new blow to an industry reeling from a state and federal crackdown.
U.S. District Judge Donald Molloy on Friday dismissed a civil lawsuit filed by 14 individuals and businesses that were among more than two dozen medical marijuana providers raided by federal agents last year across Montana.
The providers claimed the raids violated their constitutional rights in part because state law passed by voter initiative in 2004 allows them to grow and produce the drug for medical consumption.
Molloy wrote in his order that the providers can be prosecuted under the federal Controlled Substances Act even if they are following state law. He cited a 2005 U.S. Supreme Court decision that said the U.S. Constitution's supremacy clause applies in medical marijuana cases.
The supremacy clause says that federal law prevails if there is any conflict between state and federal statutes.
"Whether the plaintiffs' conduct was legal under Montana law is of little significance here, since the alleged conduct clearly violates federal law," Molloy wrote. "We are all bound by federal law, like it or not."
The medical marijuana providers also argued that the Justice Department had said it would not prosecute them, citing a 2009 agency memo called the Ogden Memo after its author, Deputy Attorney General David Ogden.
In that memo, Ogden wrote that federal prosecutors would not pursue "individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana."
Molloy wrote that Ogden's memo was not a free pass to produce and consume marijuana, and the memo itself says complying with state law does not create a legal defense to violations of the Controlled Substances Act.
"A reasonable person, having read the entirety of the Ogden Memo, could not conclude that the federal government was somehow authorizing the production and consumption of marijuana for medicinal purposes," he wrote.
Carl Jensen, a Great Falls attorney representing the medical marijuana providers, said Molloy's ruling should serve as a warning to other providers still operating in the state.
"The supremacy clause has been used by the federal government to hammer anything they want to," Jensen said. "Absolutely, they should be concerned. If the federal government ever decides it wants to go after them, it can."
Timothy Baldwin, another plaintiffs' attorney, said he, Jensen and their clients were discussing whether to appeal the ruling to the 9th U.S. Circuit Court of Appeals.
"This is too important for us not to appeal to the 9th Circuit," Baldwin said. "It's disappointing to see how the states have essentially paved a path for citizens to engage in what they believe is lawful activity, only to set them up for federal intrusion like this."
U.S. Attorney spokeswoman Jessica Fehr said federal prosecutors had no comment on the ruling.
The federal raids in March 2011 placed a chill over Montana's booming medical marijuana industry, causing several providers to close down because their inventories had been seized or out from fear that their businesses would be next. Several raided providers have pleaded guilty to federal drug charges.
Lawmakers struggled last year to come up with a solution for what many people perceived to be an industry that at that time was growing too quickly and with too few rules. The final bill repealed the original voter-approved law in favor of one that aimed to dramatically curtail the for-profit medical marijuana industry.
That legislative action is currently under legal review, and will also appear on the November ballot for voters to endorse or reject.
Portions of the new law have been temporarily blocked by a state judge, but the result has been a dramatic decline in the number of medical marijuana patients and providers. There were 18,012 registered marijuana users at the end of December, compared to 31,522 at the end of May, according to the state Department of Public Health and Human Services.
There were 395 registered marijuana providers at the end of December, compared to 4,650 at the end of May.
A group of lawmakers meeting Monday in Helena received an update on the ongoing developments. Many believe it will again require some sort of legislative action when lawmakers convene in 2013.
Sen. Art Wittich, R-Bozeman, said the federal crackdown could mean the state has to revisit how it allows distribution of the drug under its medical marijuana law.
"Is there any value in looking at this question of how you get this medical marijuana to the patient who is legitimately sick?" Wittich said. "How do we ensure the product is available for people who are sick?"
Associated Press writer Matt Gouras contributed to this report.