I’ve spent considerable time explaining the law regarding religious use of psychedelics on the Psychedelics Law Blog lately. A lot of that same law applies equally to cannabis. Naturally, I want to answer a similar question here: are cannabis churches legal? The answer is that they are basically “legal” in the same sense that cannabis businesses are legal: they violate federal law but can comply with state law if licensed. Let’s break it down.
Are cannabis churches federally legal?
As noted, I’ve written extensively on these issues on our sister blog and won’t re-hash them in detail here. At a 10,000-foot level, the First Amendment protects religious liberties. The U.S. Supreme Court held in 2006 that these protections can extend to legal use of psychedelics. Its reasoning applies equally to cannabis use.
Following said case, the DEA created a procedure for petitioning for religious exemptions to the Controlled Substances Act. While this was intended for psychedelics, there’s no reason why cannabis churches couldn’t petition either. But – and this is a big “but” – DEA will sit on petitions for YEARS. And if petitioners are “lucky” enough to get a response, it will be a denial.
In the million-to-one (maybe even higher?) chances DEA says yes, things don’t end there. DEA makes clear that the petitioner will still need to comply with state law. This brings me to the next point.
State legal cannabis churches?
I’m not aware of any state that prohibits religious groups from getting cannabis licenses. In my home state of California, non-profits can get licensed. This includes religious non-profits, though I’ve not seen that done before.
At the same time, I’m also not aware of any state that exempts religious groups from licensing. Why would they? States love tax revenue (many would argue they love it a little or a lot too much, but I digress). I’ve been asked on more than one occasion if a company that wants to sell cannabis in a California city that bans it can simply declare itself a religion and avoid getting licensed. It’s a pretty easy “no” – well, that is, if they want to follow state/local law.
Can cannabis churches legally operate as non-profits?
The answer to this question is very complicated. State law may allow cannabis churches to incorporate as non-profit corporations. But that does not mean they qualify as Internal Revenue Code section 501(c)(3) organizations. I recently wrote about 501(c)(3) denials for psychedelics companies, and the logic is the same for cannabis churches. Decades ago, IRS explained that organizations engaged in illegal conduct cannot gain tax exempt status. More recently, IRS recently denied 501(c)(3) status to a medical cannabis business. Categorically speaking, cannabis churches and 501(c)(3) status don’t mix, no matter how they’re set up.
To recap, the cannabis churches violate federal law. DEA won’t grant them exemptions. They may work under state law, but only with a license. And even if they get a license, they won’t get 501(c)(3) status.
The post Are Cannabis Churches Legal? appeared first on Harris Bricken Sliwoski LLP.
