Federal Stay-at-Home Order? What Cannabis Businesses Need to Know

April 8, 2020 Melissa Schiller

While many U.S. states have issued guidance to address the COVID-19 pandemic, Dr. Anthony Fauci, the nation’s top infectious disease expert, told CNN last week that the governors who have not issued statewide stay-at-home orders “really should” take action to slow the spread of the virus.

President Donald Trump, on the other hand, has largely advocated for each state to take its own approach, but Fauci’s message could indicate the inevitability of a federal stay-at-home order as the public health crisis evolves.

Should federal guidance come into play, what would this mean for cannabis businesses operating in a federally illegal industry?

First and foremost is the question of whether the federal government can legally issue a stay-at-home order in the first place.

“I think there’s still a question [of] if the federal government has the authority to issue a shutdown order,” Karen O’Keefe, director of state policies for The Marijuana Policy Project (MPP) and the MPP Foundation, tells Cannabis Business Times. “I saw that there are some general classifications of what constitutes an essential service and what does not for the federal government, and at least one state that was relying on that used those definitions to include medical cannabis as something that could stay open because pharmaceutical and medical facilities can stay open. … Certainly, my hope and expectation would be … a general mandate to keep open businesses that provide medications, and then that would include medical cannabis.”

If the federal government is indeed authorized to issue stay-at-home guidance, the consensus among industry stakeholders seems to be that any federal order should leave flexibility for states to continue deeming certain businesses essential, as they see fit. This would mean that the cannabis industry should be safe in jurisdictions that already carved out exceptions for their cannabis businesses in the name of patient access.

Chris Lindsey, MPP’s director of government relations, says that while it is unlikely that the federal government would significantly increase requirements for states that have stay-at-home measures already in place, it could instruct states that have not yet adopted orders to do so, and would most likely defer to those states’ priorities as much as possible.

Harris Bricken attorney Hilary Bricken agrees.

“I think the federal stay-at-home would only address the basics and would leave it open as to whether or not these are essential businesses, and they would probably leave it up to the states,” she tells Cannabis Business Times. “If a fed order came down that said, ‘You must shutter if you’re a federally illegal business,’ that would be a different story. But even then, I think states would be in the same position that they are in now in that this is a state’s rights issue. There are lots of constituents that rely on this as medicine, so we’re going to remain open and basically continue the cycle of the federal-state conflict that’s already in place.”

Lindsey echoes this sentiment.

“States have been ignoring federal guidance on marijuana policy for some time, so even if the fed tells states to shut cannabis businesses down, it's not clear it would make much difference,” he says.

In states that have failed to carve out exceptions for the cannabis industry in their stay-at-home orders, many cities and counties have deemed cannabis businesses essential within their jurisdictions, and Bricken says these designations would also likely stand in the event of a federal order.

“I think the federal government has to be very careful here because states have determined what is best … for their communities and their states,” Rachel Gillette, chair of Greenspoon Marder’s Cannabis Law Practice, tells Cannabis Business Times. “It’s not like every state is the same, so I think it would be unwise to have a federal order that goes into the minutia of detail to … determine what is essential versus not, where there might be certain states that have special needs, circumstances or situations, like legalized cannabis, for example.”