Legalization Without Disruption: Why Congress Should Let States Restrict Interstate Commerce in Marijuana

Over the past twenty-five years, states have developed elaborate regulatory systems to govern lawful marijuana markets. In designing these systems, states have assumed that the Dormant Commerce Clause (DCC) does not apply; Congress, after all, has banned all commerce in marijuana. However, the states’ reprieve from the doctrine may soon come to an end. Congress seems poised to legalize marijuana federally, and once it does, it will unleash the DCC, with dire consequences for the states and the markets they now regulate. This Article serves as a wake-up call. It provides the most extensive analysis to date of the disruptions the DCC could cause for lawmakers and the marijuana industry. Among other things, the doctrine could spawn a race to the bottom among states as they compete for a newly mobile marijuana industry, undermine state efforts to boost participation by minorities in the legal marijuana industry, and abruptly make obsolete investments firms have made in existing state-based marijuana markets. But the Article also devises a novel * Associate Professor of Law, University of Maine School of Law. ** LaRoche Family Chair in Law, Vanderbilt University Law School. The authors thank Austin Bernstein, Brannon Denning, Andrew Kline, Phillip Neiman, Pat Oglesby, Shaleen Title, and participants at the International Cannabis Bar Association Annual Meeting and the National Association of Appellate Court Attorneys Annual Meeting for helpful feedback on earlier drafts of this Article. We also thank Thomas Boynton, Sarah Dunaway, Madeline Flynn, and Nathan Kanter for their valuable research assistance.

Congress is poised to do something that would have been unthinkable even a decade ago: legalize marijuana federally. For the past fifty years, the federal government has criminalized the possession, cultivation, and distribution of the drug. 1 Even as a growing number of states reformed their own marijuana laws, Congress has left the federal ban on the books. In the past two years, however, lawmakers from across the political spectrum have drafted a host of competing bills that would, at long last, repeal that prohibition. 2 Given the overwhelming public support for legalization, it now seems almost inevitable that one of these measures (or something like them) will pass. 3 The details of congressional reform proposals vary, but they all share one thing in common: each of them purports to preserve or even expand state regulatory authority over marijuana. 4 In announcing a major new legalization proposal in summer 2021, for example, Senate Democratic leaders emphasized that the bill would "empower[] states to implement their own cannabis laws." 5 Although some proposals envision a federal role in regulating marijuana, federal lawmakers seem content-even eager-to let states take the 1. 21 U.S.C. § § 841, 844. Marijuana is defined as "[c]annabis" plants and any products made therefrom that contain more than trace amounts of the psychoactive chemical delta-9 THC. See id. § 802(16). We recognize and sympathize with the movement to rechristen the drug cannabis. See Robert A. Mikos & Cindy D. Kam, Has the 'M' Word Been Framed? Marijuana, Cannabis, and Public Opinion, PLOS ONE, Oct. 2019, available at https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0224289 (discussing controversy and shift in the use of the terms). However, we continue to use the term marijuana because federal law and most state codes still use that term. Id. Furthermore, for our purposes, marijuana is more precise, since cannabis does not distinguish between varieties of the plant that contain psychoactive THC and those that do not, even though they are regulated differently. See infra notes 276-77 and accompanying text (discussing hemp regulations).
2. See infra Section II.B (discussing leading federal proposals). But lawmakers who believe that federal legalization would necessarily preserve state control over the marijuana market are in for a rude awakening. Legalization would impose a previously unnoticed but important constraint on state power not found in the text of any federal legislation: the Dormant Commerce Clause (DCC). 6 The DCC is an implied doctrine of constitutional law that circumscribes the states' power to regulate interstate commerce. 7 Even though it has largely escaped attention in debates over federal reforms, the doctrine could have enormous ramifications for the states' ability to regulate marijuana following federal legalization and to achieve the policy goals served by such regulation. 8 To date, states have operated on the assumption that the DCC does not apply to the marijuana market because Congress has banned all commerce in marijuana. 9 Pursuant to this assumption, they have imposed a variety of direct and indirect restraints on interstate commerce in marijuana, including, most notably, universal bans on all sales of marijuana across state lines. 10 Because of such restrictions, there is currently no (lawful) interstate commerce in marijuana. 11 Rather than a single national market, we thus have thirty-nine (and counting) distinct state marijuana markets, each with its own set of state-licensed producers and distributors to supply local demand. 12 Once Congress legalizes marijuana, however, the DCC will bring a swift and unexpected end to these insular state-based marijuana markets. 13 marijuana-policies (introducing STATES Act to "protect[] states, territories, and tribal nations as they implement their own marijuana laws without federal interference" as expressed by Senator Elizabeth Warren); id. (Statement of Senator Cory Gardner) ("The bipartisan, commonsense [STATES Act] ensures the federal government will . . . not interfere in any states' legal marijuana industry.").
6. See infra Part III (introducing the DCC and illuminating the ways in which the doctrine will impede state regulation of the marijuana market).
7. See infra Section III.A (discussing the DCC and its purposes). 8. See infra Section III.B. 9. See infra Section III.A. 10. See infra Section II.A (discussing state regulations and their effects on the marijuana market in detail).
11. See Robert A. Mikos, Interstate Commerce in Cannabis, 101 B.U. L. REV. 857, 862 (2021) ("States have directly restricted interstate commerce in cannabis in two main ways. First, every legalization state currently prohibits interstate sales of cannabis. . . . Second, most legalization states also limit the ability of nonresidents to own and operate local cannabis businesses.").
12. See id. at 859 (noting that by 2020 over thirty states had legalized marijuana and that each state has its own local market).
13. See infra Sections III.A, III.B (explaining how the DCC would threaten existing state marijuana regulations and the insular markets they maintain).
14. See infra Section III.B. 15. See infra Section III.B.1. 16. See infra Section III.B.2. 17. See infra Section III.B.3. 18. See infra Section III.B.3 (explaining why the DCC would invalidate state programs as presently designed, but also explaining why there may be no other way for states to pursue these programs).
19. See infra Section III.B.4. 20. A recent article that one of us authored is the lone exception. See Mikos, Interstate Commerce in Cannabis, supra note 11. Our work here builds on that article in several respects. For some earlier scholarship that has examined a related but distinct issue involving the DCC (whether states may regulate marijuana tourism by outsiders), see generally Brannon P. Denning 570 (1987) (observing that the DCC was once considered obscure and "arcane" but also noting a resurgence of interest in the doctrine). [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW It is difficult to overstate the ramifications this development would have for state regulators and extant marijuana markets. 14 By unleashing the DCC upon the states and thereby exposing key state laws to legal challenge, Congress would inadvertently create gaps in the regulation of marijuana-situations in which there is no state or federal law governing key activities of the marijuana industry. 15 By preventing states from restricting imports of marijuana, the DCC would also trigger a regulatory race to the bottom, as states begin to compete for a lucrative but suddenly mobile marijuana industry. 16 The DCC would also threaten nascent social equity licensing programs states have adopted to boost minority participation in their marijuana markets. 17 Such programs limit eligibility to residents of local communities disproportionately harmed by the war on drugs-a form of geographic discrimination the DCC plainly would not allow. 18 And almost overnight, the DCC would make obsolete investments that thousands of firms have made in existing state regulatory systems and insular state markets. 19 These are just some of the issues likely to arise if Congress legalizes marijuana and thereby suddenly unleashes the DCC upon unprepared state lawmakers and the insular marijuana markets they have heretofore maintained.

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Unfortunately, the DCC has gotten little attention in burgeoning debates over the future of marijuana policy. 20 Although the doctrine has recently surfaced in a flurry of lawsuits challenging state residency requirements for marijuana business licenses, 21 it has still not dawned on state or federal lawmakers that state laws will be jeopardized by this "arcane" 22 doctrine the moment Congress legalizes marijuana.
This Article serves as a much-needed wake-up call. Building on previous 23. See infra Section III.C (proposing statutory language for Congress's consideration that would preserve state regulatory authority against the DCC).
24 scholarship that has only just begun to consider interstate commerce in marijuana, it provides the most detailed and extensive account to date of the problems that will be caused by legalizing marijuana federally and thereby unleashing the DCC on unsuspecting lawmakers and insular state marijuana markets.
Just as importantly, this is the first Article to offer a solution to the problems posed by the DCC-a way for Congress to legalize marijuana federally, without disrupting the regulatory systems created by states. 23 It is well-settled that Congress may suspend the DCC by authorizing state regulations that would otherwise run afoul of the doctrine. 24 We propose that Congress suspend the DCC in the marijuana market, at least for a limited period of time. 25 Borrowing statutory language Congress adopted to forestall disruptions in another market traditionally regulated by the states (insurance), we show exactly how this could be done for marijuana.
Suspending the DCC would not only help states and the marijuana industry prepare for the eventual emergence of a national marijuana market, but it would also help federal policymakers manage that transition as well. 26 Our proposal would not foreclose federal regulation of marijuana. Instead, it simply directs that regulation come from Congress or federal agencies, rather than judges applying an arcane constitutional doctrine that is ill-suited for the task. It would give federal policymakers time to craft regulations specifically tailored to the needs of the burgeoning marijuana market, without worrying about the chaos the DCC will cause while they deliberate.
Finally, we also include a sunset provision in our proposal, limiting the term of the DCC's suspension to seven years unless Congress extends it. 27 We explain why making the suspension presumptively temporary would ameliorate the classic concerns raised by state protectionism, including fears that it will spark friction among the states and sacrifice productive efficiency in the marijuana industry. The Article proceeds as follows: Part II begins by detailing state regulations and the current insular state-based marketplace system for marijuana. It then reviews the leading congressional proposals to legalize marijuana federally, focusing on how those proposals purport to preserve state authority over marijuana. Part III introduces the DCC and explains how that doctrine will threaten a broad array of extant state regulations and the state markets they maintain. It unpacks, in turn, several problems that would arise if Congress legalizes marijuana without suspending the DCC, as every congressional reform proposal would now do. It also introduces our proposed statutory language, and how the language would clearly authorize states to regulate marijuana outside the shadow of the DCC. Additionally, Part III explains how Congress could minimize any tradeoffs involved in allowing states to continue to restrict interstate commerce in marijuana. Part IV briefly concludes with an appeal to Congress to incorporate our proposed statutory language into the legalization bills it is now considering, while highlighting some of the issues that still need to be addressed in future scholarship.

A. The Insular State-Based Marketplace System
It has now been over twenty-five years since California voters made their state the first in the nation to legalize marijuana for medical purposes. 28 That groundbreaking law, the Compassionate Use Act of 1996 (CUA), created a simple exception to the state's prohibitions on possessing and cultivating marijuana that applied to medical marijuana patients and their caregivers. 29 This narrow carve-out from criminal liability was the sole legal change brought on by the CUA. The Act did not authorize the state to license medical marijuana businesses, let alone establish regulations for such businesses. 30 Indeed, the CUA did not seem to anticipate that legalizing the personal use of medical marijuana would lead to a booming marijuana industry that would require careful regulation by the state.
Things have changed in the ensuing quarter-century.  34 To govern this ever-evolving marketplace, the MED has engaged in dozens of rounds of rulemaking, including a substantial revision in 2019 that combined the state's (previously separate) medical and adultuse rules into one comprehensive set of marijuana regulations. 35 These regulations are highly detailed and complex. The 438 pages of rules include provisions governing business ownership and licensing; 36 a range of health and 37. E.g., id. § 212-3-3-325 (identifying prohibited pesticides and other prohibited chemicals); id. § 212-3-3-230 (establishing procedures for disposing of marijuana waste); id. § § 212-3-3-220 to 3-225 (creating requirements for security alarm s ystems and video surveillance systems icy choices combine to dictate how concentrated the state's marijuana marketplace will be, what barriers to entry will exist for new market participants, and correspondingly, how valuable marijuana business licenses will be to their holders. The states have also made different policy choices regarding health, safety, and environmental rules, including how marijuana must be labeled, packaged, stored, tested, transported, marketed, and sold to the end user. 44 The policy decisions involved in establishing these rules are driven by each state's unique, local concerns, and the resulting policies correspondingly influence the character of the states' respective marijuana marketplaces. Consider, for example, the differing state policies regarding pesticide use in cultivating marijuana. Some states greatly restrict the use of pesticides in marijuana cultivation, even banning EPA-regulated pesticides entirely in order to minimize consumer exposure to harmful chemical residues in marijuana products. 45 Restrictive pesticide policies make outdoor cultivation operations-which cannot control for pests and other contaminants as easily as indoor environments-particularly challenging. 46 Such policies are thus more palatable for states where outdoor growing conditions are naturally less hospitable, as most cultivators already operate indoor grow facilities. 47 However, in states with favorable outdoor growing conditions, restrictive pesticide policies could disrupt the cultivation market by increasing the cost of outdoor production and causing some shift to indoor operations. 48  To make matters more complex, states must also grapple with other environmental considerations in formulating their pesticide rules. Indoor cultivation is incredibly energy intensive. 50 Should states adopt permissive pesticide policies to shift more production outdoors, thereby reducing energy consumption? 51 On the other hand, outdoor cultivation can lead to deforestation, and it requires a tremendous amount of water. 52 Should states therefore incentivize indoor cultivation, even if their local growing conditions would make outdoor cultivation more economical? It is no wonder that "no two states have come up with quite the same solution" regarding pesticide use on cannabis, let alone the host of other regulations governing their marijuana marketplaces. 53 Crucially, the thirty-nine states that have legalized marijuana not only have thirty-nine unique regulatory regimes, they also have thirty-nine insular marijuana marketplaces. That is to say, every state prohibits licensed marijuana businesses from importing or exporting marijuana. 54 Marijuana producers can only sell their crop to retailers licensed in their state, and retailers can only purchase their marijuana from producers licensed in their state. 55 This insular, state-based marketplace system makes marijuana a unique commodity in the United States. As we explain below, states ordinarily cannot restrict imports https://www.oregon.gov/oda/shared/Documents/Publications/PesticidesPARC/GuidelistPesti-cideCannabis.pdf (compiling a twenty-page list of approved pesticides for marijuana i n Oregon 55. See Mikos, Interstate Commerce in Cannabis, supra note 11, at 863 (noting that licensed cannabis businesses "must conduct their business activities within the state's borders" and that even when they hold licenses in multiple states, "they must operate separate production facilities in each of those states"). In addition to states' express import-export prohibitions, some states restrict non-residents from owning marijuana businesses. 57 These ownership restrictions can take the form of an absolute bar on non-resident ownership, or they can be structured as a preference whereby residents receive extra points in a competitive licensing process. 58 Resident ownership restrictions are also prevalent in states' social equity programs. Rectifying the inequities caused by the War on Drugs has been a major justification for state marijuana reforms. 59 To further that objective, many states give preference to marijuana business license applicants who belong to groups that were disproportionately harmed by their drug policies. 60 States base eligibility for this benefit on whether an applicant resides in a community within the state that was disproportionately impacted by the War on Drugs. Illinois, for example, gives "Social Equity Applicants" extra points in the state's competitive licensing process. 61 The state defines that term, in relevant part, as an applicant controlled by individuals who "resided for at least 5 of the preceding 10 years in a Disproportionately Impacted Area," with such areas being limited to certain communities in Illinois. 62 There are three overlapping explanations for why we have this unique insular system for marijuana. The first is that states chose to restrict interstate marijuana transactions as a means of warding off federal interference in their marketplaces. 63  Cole Memo, announced a hands-off enforcement policy regarding marijuana prohibition in states that "implement[ed] effective measures to prevent diversion of marijuana outside of the regulated system and to other states." 64 The second explanation is that horizontal federalism concerns animated states' restrictions on interstate commerce. States instituted these restrictions to reduce friction with states that had stricter marijuana rules or prohibited the substance entirely. 65 The third possibility sounds in pure protectionism: states restricted interstate commerce in marijuana to advantage their residents and to guard their fledgling marijuana industries from out-of-state competition. 66 In sum, whether motivated by federalism concerns or protectionism, each state in which marijuana is legal has established its own insular, intrastate marijuana marketplace. The states have achieved their insular marketplace structures by prohibiting marijuana imports and exports and, in some cases, by restricting non-resident ownership. Further, the states have each developed their own unique sets of regulations to govern their marketplaces. These unique regulatory regimes would have restrictive effects on interstate commerce even if the states lifted their import-export prohibitions and/or their restrictions on non-resident ownership. This system of insular state-based markets makes marijuana sui generis in the United States.

B. Federal Reforms on the Horizon
Notwithstanding the recent proliferation of state reforms, federal law has remained largely unchanged since the passage of the CSA in 1970. 67 That statute bans the production, possession, and distribution of marijuana in nearly all circumstances. 68 on their state-licensed cannabis industries" The success of state marijuana reform is all the more remarkable because it has happened in the shadow of this strict federal ban. Exploiting constraints on Congress's constitutional authority and practical limits on the federal government's ability to enforce its own ban, states have been able to find a way not just to legalize marijuana but to create a new, vibrant industry to supply the drug, along with robust regulatory systems to govern it. 69 But the federal ban has exacted a toll on these state-created systems. Because of the federal ban, the marijuana industry and the state lawmakers who regulate it have encountered a host of obstacles. Among other things, firms in the industry cannot easily obtain banking services, 70 they have to pay exorbitantly high federal tax rates, 71 and they cannot access federal statutory protections for bankruptcy and trademarks. 72 Likewise, state regulators have fretted about federal preemption of their regulations, they have eschewed some potentially advantageous policy proposals (like state-operated marijuana shops), and they have struggled to monitor the marijuana industry's cash-only transactions (which do not create paper trails for regulators to follow). 73 Prompted by large and growing public support for legalization, Congress is finally getting serious about removing these obstacles. Federal legalization now seems almost inevitable.
The details of federal reform still need to be worked out, but the leading Beyond repealing federal prohibition, all congressional reform proposals purport to leave the regulation of marijuana largely if not quite exclusively in the hands of the states. For example, the STATES Act envisions only two federal regulations that would apply if a state chose to legalize marijuana: it would ban the sale of recreational marijuana to anyone under twenty-one years old and it would ban the sale of marijuana at truck stops, both without regard to whether state law allowed such sales. 79 The CAOA would go a step further by authorizing some federal regulation of the marijuana industry. 80 Under this proposal, Congress would impose a new federal excise tax on all sales of marijuana, with the proceeds earmarked for individuals and communities "adversely impacted by the War on Drugs." 81 82. Id. § 502. 83. Id. § 511(301). 84. For example, the CAOA calls for various federal agencies to design a national tracking system and to promulgate "product standards that are appropriate for the protection of the public health." Id.
§ Like the STATES Act, the CAOA would establish a federal minimum age for marijuana purchases, but it would also impose some (rather generous) limits on the size of all retail transactions and would ban the sale of products containing both marijuana and alcohol or nicotine. 82 The proposal would also require some marijuana businesses to obtain a federal license, in addition to any license required by state or local government. 83 To be sure, the CAOA contemplates some additional federal regulations beyond these few measures. 84 But it leaves those regulations to be worked out another day.
Notwithstanding the federal regulation contemplated by the CAOA, the bill's sponsors-Senators Cory Booker, Ron Wyden, and Chuck Schumerhave pointedly emphasized that the bill would "empower[] states to implement their own cannabis laws." 85 Consistent with that theme, the CAOA contains express language reaffirming state power over marijuana. States could regulate marijuana transported into the state "in the same manner as though the cannabis had been produced in that State," 86 and could prohibit the transportation of marijuana into a state where it is "intended, by any person interested therein, to be received, possessed, sold, or in any manner used, . . . in violation of any law of that State." 87 It is unclear which (if any) of the proposals now on the table will be adopted by Congress and when. But the growing prospect of federal legalization has gotten an enthusiastic reception from almost everyone apart from hold-out prohibitionists. 88 For its part, the marijuana industry and other com-

Legalization Without Disruption
PEPPERDINE LAW REVIEW panies currently waiting in the wings look forward to being free of the obstacles now imposed by federal law. 89 Likewise, states look forward to having a freer hand to regulate the marijuana market, where they do not need to work around the federal ban. Under the conventional wisdom, then, federal legalization is a win-win scenario for the marijuana industry and for the states. Unfortunately, these actors may be in for a rude awakening. Despite all the platitudes about preserving state power, extant proposals would silently unleash an obscure but important constitutional doctrine upon unsuspecting states and an unsuspecting marijuana market: The DCC. The next Part of this Article discusses the dramatic consequences the DCC could have for state regulations and the marijuana industry.

III. THE THREAT POSED BY THE DCC
Key portions of the comprehensive marijuana regulations that states have developed, tested, and refined will soon be threatened by the DCC. Once Congress legalizes marijuana, the DCC will invalidate states' import-export prohibitions and restrictions on non-resident ownership, along with an untold number of other state laws that burden interstate commerce in marijuana. In effect, the DCC will serve to replace the insular state markets we have today with a new national marijuana market. This abrupt shift will cause substantial disruptions for the marijuana industry and those who regulate it.
This Part discusses the DCC and explains why this constitutional doctrine poses an existential threat to state regulatory systems and the purposes served by them. But it also reveals a way that Congress can legalize marijuana without causing these disruptions. Specifically, we propose statutory language that would suspend the DCC's application to state marijuana laws, at least for long enough to ensure a smooth transition to a national marketplace. As we Association, and the Marijuana Policy Project all generally support the CAOA, while President Biden, Senator Grassley, and the anti-legalization group Smart Approaches to Marijuana do not support it); see also, e.g., Insa Announces Support for Federal Legislation To Legalize Cannabis, BUS. WIRE (July 16, 2021, 9:13 AM), https://www.businesswire.com/news/home/20210716005047/en/Insa-Announces-Support-for-Federal-Legislation-to-Legalize-Cannabis (reporting that a multi-state operator, Insa, supports the CAOA); Global Alliance for Cannabis Commerce, Statement on the Booker-Wyden-Schumer Cannabis Administration and Opportunity Act, PR NEWSWIRE (July 14, 2021, 8:10 AM), https://www.prnewswire.com/news-releases/statement-on-the-booker-wyden-schumer-cannabis-administration-and-opportunity-act-301333129.html (announcing CAOA endorsement).

90.
See, e.g., Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 139 S. Ct. 2449, 2459 (2019) (observing that the DCC "prevents the States from adopting protectionist measures and thus preserves a national market for goods and services"); H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 539 (1949) ("Our system, fostered by the Commerce Clause, is that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation, that no home embargoes will withhold his exports, and no foreign state will by customs duties or regulations e xclude t hem."

A. The DCC & Federal Legalization
The DCC is a free trade principle implied by the Constitution's express grant of authority to Congress to regulate commerce among the several states. The doctrine is intended to foster a national common market unhindered by the trade rivalries that beset the states under the Articles of Confederation. 90 In a nutshell, the DCC prohibits state regulation that "discriminates against or unduly burdens interstate commerce." 91 The DCC is especially hostile toward state laws that discriminate against outsiders, including laws that bar non-local firms from competing in local markets. Such laws will be upheld only if a state can demonstrate that its discriminatory policy is absolutely necessary to serve some legitimate, nonprotectionist purpose. 92 Not surprisingly, states have rarely been able to satisfy this test. Indeed, the Supreme Court has suggested that discriminatory state regulations face a "virtually per se rule of invalidity" under the DCC. 93 However, it is important to recognize that even non-discriminatory laws are threatened by the DCC. Under the governing test articulated by the Supreme Court in Pike v. Bruce Church, Inc., neutral regulations violate the DCC if they impose a burden on interstate commerce that clearly exceeds the legitimate, non-protectionist purpose(s) they are designed to serve. 94 Although the Pike balancing test is more forgiving than the strict scrutiny test that applies to discriminatory state laws, it still has teeth. States have heretofore operated on the assumption that the DCC does not apply to their commercial marijuana regulations because (ironically) Congress has banned commerce in the drug. 96 Freed from the constraints imposed by the doctrine, the states have exerted remarkable influence over every stage of marijuana commerce, from the planting of seeds to the sale of finished products. As discussed above in Section II.A, states have used this influence to shape the demographics, structure, and operation of their local marijuana industries, seeking to boost ownership by racial minorities, limit industry consolidation, minimize carbon emissions, and inform and protect consumers, among other goals.
In previous work, we reached different conclusions about whether the federal marijuana ban currently suspends the DCC's application to state marijuana regulations. 97 The same issue is now before a handful of federal courts adjudicating recent challenges to state residency requirements for marijuana licensing. 98  ban, as now seems inevitable, state marijuana regulations will surely be subject to the DCC. In other words, once Congress legalizes marijuana at the federal level, states will have to satisfy the DCC tests outlined above if they want to continue to ban or burden interstate commerce in marijuana.
It is difficult to overstate the ramifications this development would have for state regulators and marijuana markets. Existing state regulations that insulate local firms from outside competition, including ubiquitous import-export bans and residency preferences for marijuana licenses, plainly would not survive a DCC challenge. 99 The Supreme Court has previously invalidated nearly identical restrictions states have imposed on interstate commerce in other markets. 100 Left unchecked, the DCC "is likely to spell the demise of the strange, state-based cannabis markets we have today and the rise of a national cannabis market in which local firms must compete with out-of-state firms," 101 eroding the control states now wield over the marijuana industrya troublesome development, for reasons discussed below. 102 Apart from dooming discriminatory state regulations, the DCC will also cast doubt upon a host of neutral state marijuana laws. As discussed earlier, states have adopted different rules regarding a variety of matters, including the use of pesticides; the testing, labeling, and packaging of marijuana products; and vertical integration in the marijuana industry. 103 Once states are forced to open their doors to imports and exports, these differences will begin to impede interstate commerce in marijuana.
To illustrate, consider state testing requirements. If one state requires marijuana to be tested for a contaminant (say, a chemical) that no other state bothers to screen, the state would raise the cost of selling marijuana in its market. 104 After all, producers would need to have their products specially tested, and possibly even re-tested, just for that state's market. Unless the state can prove that the added testing actually improves the safety of marijuana products-for example, that the chemical of concern is actually hazardous 105. Indeed, states have already been deluged by a flood of DCC lawsuits challenging state residency preferences for marijuana licenses. See supra note 98.
106. Justice Scalia famously quipped that the balancing demanded by Pike was "like judging whether a particular line is longer than a particular rock is heavy." Bendix Autolite Corp. v. Midwesco Enters., Inc., 486 U.S. 888, 897 (1988) (Scalia, J., concurring). See also, e.g., Brannon P. Denning, Reconstructing the Dormant Commerce Clause Doctrine, 50 WM. & MARY L. REV. 417, 422 (2008) (footnote omitted) (observing that the DCC's "rules are easy to recite, but their application is notoriously difficult, resulting in cases with similar facts being decided differently, and the different outcomes justified on the basis of tendentious distinctions").
107. See Mikos, Interstate Commerce in Cannabis, supra note 11, at 876 ("None of the leading reform proposals Congress is now considering contemplates giving states the power to discriminate against interstate commerce in cannabis."). The lone exception is the CAOA, which does explicitly address state power over imported marijuana. However, as discussed more below, the limited authority conferred on the states by the CAOA would leave many state marijuana regulations vulnerable to DCC challenge. See infra Section III.C.
108. See infra Section III.C.1. In short, by legalizing marijuana, Congress will instantly-and perhaps unwittingly-transform our current system of insular, state-based marijuana marketplaces into a national, interstate market that is no longer subject to the comprehensive state controls we have today. Notably, we suspect that few proponents recognize the degree to which federal legalization threatens the regulatory systems states have developed. While emphasizing the good that federal legalization will do the states, leading congressional reform proposals are conspicuously silent on the DCC and its implications for state regulations. 107

B. The Benefits of Suspending the DCC
Fortunately, there is a way that Congress can legalize marijuana without instantly destroying the insular state-based marketplace system. The Supreme Court has long held that Congress has the power to suspend the DCC and authorize states to restrict interstate commerce. 108 In this Section, we unpack 109. See supra Section II.B. 110. To be sure, there are federal statutes that preempt state laws without also imposing a federal rule to take their place, but such statutes are "historically rare." Jonathan Remy Nash, Null Preemption, 85 NOTRE DAME L. REV

Avoiding Regulatory Gaps
Congress should authorize states to restrict interstate commerce in marijuana to avoid inadvertently creating gaps in the regulation of the marijuana industry-namely, scenarios where there is effectively no state or federal law governing the industry. The sudden imposition of the DCC could create such regulatory gaps in two discrete ways.
First, courts might enjoin state regulations for which there is no federal counterpart. As discussed earlier, many state marijuana regulations will become vulnerable to DCC challenge once Congress legalizes marijuana at the federal level. These regulations include not only state laws that directly restrict interstate sales and investment in the marijuana industry but also state laws that indirectly burden such commerce, such as the idiosyncratic requirements states have adopted for testing, labeling, and packaging marijuana products. 109 If a court were to hold that any of these state regulations unduly burdens interstate commerce in marijuana, the law would instantly become unenforceable. In this regard, the DCC resembles congressional preemption of state law. Unlike preemption, however, the DCC can block state law even when there is no federal statute to take its place, i.e., even when there is no federal law regulating the same activity. 110 Anytime the DCC blocks the enforcement of a state regulation for which there is no federal analog, it will create a new gap in the regulation of the marijuana industry. 111 Unfortunately, as yet, there are very few federal regulations on the books that could fill the resultant regulatory gaps. Since 1970, Congress has relied almost exclusively on the CSA to "regulate" marijuana. Even after states be- gan to authorize the commercial production and distribution of the drug, Congress did not repeal, modify, or supplement the CSA; it left that prohibitory statute in place, but largely unenforced against the emergent marijuana industry. 112 Once Congress formally repeals the CSA as applied to marijuana, there will be little federal regulation left on the books to specifically govern many of the marijuana industry's activities. 113 Until state or federal lawmakers are able to replace regulations blocked by the DCC, the interests served by those regulations would go unprotected. Consider, for example, what would happen if a court were to enjoin the type of state testing regime described above. In the wake of such a ruling, vendors could sell untested and potentially unsafe marijuana products while lawmakers scrambled to find a way to plug the gap created by the DCC.
The DCC could create regulatory gaps in a second way as well. Even when it does not invalidate state regulations, it will make enforcing those regulations far more difficult. For example, by requiring states to open their markets to new suppliers and imported marijuana, the DCC will doom the ingenious closed-loop systems states have heretofore relied upon to police their local marijuana industries. In these closed-loop systems, states require all participants-cultivators, processors, testers, wholesalers, and retailers-to obtain a license from the state, and they assiduously track every gram of marijuana as it moves through the supply chain. 114 By providing states with detailed information about regulated activities, these closed-loop systems have greatly enhanced the states' ability to enforce their regulations on the marijuana market. 115 For example, because every gram is accounted for, licensees cannot easily evade taxes levied on the sale of marijuana produced in this system. 116 But the states will not be able to maintain these closed-loop systems as presently constructed because the systems exclude non-local firms and nonlocal marijuana. Once the DCC kicks in, of course, such exclusions will no longer be permissible. Because states will have to allow firms to introduce marijuana produced outside of these loops and the tracking systems states have developed, the DCC will greatly complicate enforcement of state regulations.

See Cannabis Tax Revenue in States that
Just consider how the DCC could undermine the collection of state marijuana taxes. As of December 2021, the states had collected over $10 billion in tax revenue from the adult-use market alone. 117 The DCC will not (necessarily) bar states from taxing marijuana imported from other states. In theory, at least, states can lawfully tax all marijuana that is to be used in the state, regardless of where it was produced or sold. For example, states commonly impose use taxes on automobiles and other big-ticket items that are purchased elsewhere but brought into the state. 118 But enforcing state taxes will become much more complicated once marijuana can be shipped across state lines and across state tracking systems. Among other reasons, a producer could claim that it sold products out-of-state in order to evade paying local sales taxes on that inventory. Unless the states quickly figure out how to coordinate their disparate tracking systems to monitor marijuana shipped across state linesa monumental task-they will have a difficult time detecting such evasion. 119 The challenges posed by the emergence of a national market are hardly unique to marijuana, but for other products, Congress has developed elaborate systems to assist states in enforcing their taxes and other regulations. For 123. The CAOA would require proof that state taxes had been paid on bulk (more than ten pounds) quantities of marijuana, see GAI21675 4LN, 117th Cong. § 112 (2021). But it does not require vendors to register with and report all of their interstate sales to the relevant state taxation authorities, and it does not authorize state enforcement of its provisions.
124. For example, the CAOA envisions the creation of a national marijuana tracking system. See supra note 84. But it would take time for regulators to work through several difficult issues involved in developing such a system, such as whether and how to integrate the system with existing state systems, and there is no guarantee one would ever be adopted in the first instance. [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW example, Congress has passed several statutes to assist states in collecting cigarette excise taxes. To that end, the Jenkins Act requires all vendors who sell cigarettes in interstate commerce to register with and report all of their sales to the taxation authority in every state where they ship cigarettes, 120 and the Contraband Cigarette Trafficking Act requires those who possess bulk quantities of cigarettes to carry evidence that all applicable state taxes have been paid on them. 121 These statutes provide federal criminal penalties for violations and also authorize state officials to seek injunctive and other civil relief against violators. 122 While no panacea, such federal assistance eases the burden states face in enforcing their taxes and other regulations on goods that are shipped across state lines. The states will have no such luck with enforcing their taxes or other regulations on the suddenly national marijuana industry. There is no federal regulatory regime in place that will help them collect taxes once interstate sales of marijuana are allowed. Although one proposal (the CAOA) would lend some assistance to the states, it is a far cry from the support Congress has lent in other markets. 123 Moreover, regulations authorized by the CAOA (or any other federal legalization proposal) could take years to develop. 124 Turning off the DCC would give federal policymakers time to carefully craft those regulations while stable state rules governing the same subject matter remain in effect.

864
In short, the moment Congress legalizes marijuana federally, the DCC will disrupt the states' ability to enforce taxes and other regulations on the marijuana industry. To avoid this disruption, Congress should suspend the application of the doctrine, at least until lawmakers can plug the regulatory gaps that the DCC would create. Congress should also authorize states to limit interstate commerce in marijuana to forestall a race to the bottom in the regulation of the marijuana industry. As we describe above, the states have devised elaborate and comprehensive codes to regulate the structure and operation of their respective marijuana industries. 125 Through such regulations, states have been able to address a variety of concerns stemming from the legalization of marijuana, including fears of creating a powerful new industry (i.e., Big Marijuana), the diversion of marijuana to illicit markets, the equitable distribution of the economic benefits of marijuana legalization, and the environmental harms associated with marijuana cultivation.
But the extraordinary control that states now wield over the marijuana industry is fragile. More than anything else, it depends on states being able to protect their local marijuana industries from outside competition. 126 By mandating that all marijuana sold in local shops must be produced locally, states have been able to dictate how that marijuana is produced (e.g., without the use of pesticides) and by whom (e.g., businesses owned by residents of disproportionately impacted areas). At present, the only real constraint on the state's influence over the industry is a practical one: competition from the black market. States recognize that imposing overly burdensome regulations on the state-licensed industry could drive consumers into the arms of black-market suppliers. 127 If Congress legalizes marijuana and the states lose their ability to restrict imports of the drug, the states will lose much of the influence they now wield over the marijuana industry. Absent the congressional authorization we envision, a state will not be able to stop out-of-state producers from selling their wares in the local market, even if those producers play by a very different set of rules than the ones the state has imposed on local firms. 128 Under the Constitution, a state may not project its regulations beyond its own borders. 129

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Although states do have some leeway to regulate the products that firms sell locally, they cannot necessarily regulate how out-of-state firms make those products or how out-of-state firms are structured. 130 For example, while Massachusetts could likely regulate the potency of all marijuana flower sold in the Bay State, it could not necessarily tell cultivators located in another state (say, Oregon) that they may not employ eighteen-year-olds to harvest their marijuana crops or that they may grow no more than 10,000 plants in a given year. Most issues involving the production of marijuana will fall under the jurisdiction of the state where the producer is located and the federal government. Thus, many of the regulations states have devised to govern marijuana production-regulations concerning firm size, ownership, vertical integration, pesticide use, energy consumption, employment practices, inventory tracking, and so on-can only be applied to firms physically located within the borders of the state. 131 Once it becomes clear that the DCC applies, the states will face new pressure to relax many of the regulations they now impose on the marijuana industry. 132 The reason is simple: the states will have to compete for marijuana businesses. Quite suddenly, and for the first time since the marijuana reform movement began, marijuana firms will have the right to relocate across state borders without sacrificing their access to the markets they leave behind. Firms will be able to use this right as leverage to push back against state regulations. Put more bluntly, firms could threaten to move their operations elsewhere if their current home state adopts (or maintains) regulations that are more onerous than the regulations adopted by another state. 133 Such threats 130. See, e.g., Mikos, Interstate Commerce in Cannabis, supra note 11, 893-94 ("Under the Constitution, states have limited power to regulate how goods are produced outside their borders, even when those goods are sold in the state.").
131. See id. at 894 n.184 ("To be clear, the states can still regulate the goods themselves-e.g., by dictating how cannabis is packaged or labeled when sold in state. But they likely cannot regulate the type of energy that was used to grow the cannabis or the age of the employees who trimmed the buds. Those matters are probably the exclusive dominion of the state where those production activities take place.").
132. See id. at 893 ("[W]ith the advent of interstate commerce, producers will be able to move to the state that imposes the least onerous regulations on cannabis production. Ultimately, this dynamic could create a race to the bottom, with states competing to relax their controls and thereby attract (or keep) more cannabis jobs.").
133. At least one major marijuana marketplace-Colorado-is already considering how it will need To attract or keep production jobs local, states may be forced to sacrifice other policy goals they have been pursuing. For example, a state might be tempted to relax its minimum age requirement for workers employed in the marijuana industry. All legalization states have adopted such requirements, which are designed to limit youth exposure and access to marijuana. 136 However, relaxing this requirement would expand the size of the local labor pool and thereby give a state a competitive advantage in recruiting marijuana producers who are currently struggling with rising labor costs and worker shortages. 137 Because other states could not block the sale of marijuana produced elsewhere by, say, eighteen-year-olds, states will feel pressure to follow suit and drop their own age requirements, thereby setting in motion the proverbial race to the bottom. 138 For similar reasons, states will be tempted to relax the other regulations they now feel free to impose on marijuana producers, from size caps to pesticide restrictions to renewable energy mandates.
It is difficult to overstate the pressure that states will face to keep or attract marijuana firms. The marijuana industry is booming. Industry sales have to modify its marijuana production regulations to remain competitive in a federal legalization environment. See COLO. REV. STAT. § 44-10-202(1)(h)(I) (2021) (creating a working group to "explore options on how the [state's] existing [marijuana cultivation] rules and tax laws could be amended to better position businesses in the state to be competitive if marijuana is legalized under federal law"). Firms will, of course, also consider other factors when deciding whether to relocate. See Mikos, Interstate Commerce in Cannabis, supra note 11, at 891-92 (discussing the climate and reputational advantages some states will enjoy when competing for marijuana businesses).
134. See Mikos, Interstate Commerce in Cannabis, supra note 11, at 893 (explaining that states currently "have wide latitude to impose [a bevy of regulations on cannabis cultivators and processors] because producers cannot leave the state").  In less than a decade, the industry has created more than 300,000 new full-time jobs across the country. 140 And while the industry is now highly fragmented-in large part because of state-imposed restrictions on cross-border sales and the size of individual producers-it is likely to become significantly more concentrated once firms are able to consolidate their operations and take advantage of economies of scale in the cultivation, harvesting, and processing of marijuana. 141 This newly concentrated industry will be able to flex its muscle against state regulators much more effectively than it does today. 142 In the past, states did not have to worry about losing their slice of this growing economic pie to other states; rightly or wrongly, they believed they could hold the local marijuana industry captive. But once Congress legalizes marijuana and unleashes the DCC, states will no longer be able to prevent local firms from leaving their borders-or outside firms from taking business away from them.
To be sure, the competitive pressures exerted by the DCC are not wholly undesirable. The DCC could prompt the development of a more efficient marijuana industry, and it might force states to think twice before imposing burdensome regulations on the industry. 143 However, we believe that the policy tradeoffs spawned by the DCC need to be considered carefully and collectively. The stakes are high, and the choices made by individual states will reverberate throughout the nation. Unless Congress suspends the doctrine, the DCC will force states to make sudden uncoordinated changes to their policies, resulting in a body of regulations that will likely prove suboptimal from a  Given more time, we think Congress could defuse a race to the bottom by adopting some federal regulations to govern the marijuana industry. 144 Congress is the lone lawmaking body that represents all of the geographically dispersed stakeholders now vying for control over marijuana policy. It has the incentive to strike the optimal balance among the competing concerns over efficiency, equity, environmental harms, public health, and the like. 145 For example, if it finds that it is in the nation's collective interest, Congress could impose a federal minimum age requirement for employment in the marijuana industry. However, it will take federal lawmakers time to figure out how best to regulate marijuana production at the national level. In the meantime, we think Congress should do the next best thing and forestall a race to the bottom by authorizing states to maintain their limitations on interstate commerce in marijuana and the control such limitations now give the states over the industry.

Preserving States' Social Equity Programs
Authorizing states to continue restricting interstate commerce in marijuana is also critical for them to be able to continue their much-needed social equity programs. It is widely understood that the nation's War on Drugs created (and exacerbated) significant racial inequities in criminal justice systems. 146   While the War on Drugs was (and is) supported by federal resources, 150 state and local law enforcement agencies account for the vast majority of the nation's drug arrests in general and marijuana arrests in particular. 151 Given the central role they played in the War on Drugs, many states have concluded that legalization alone is insufficient to rectify the inequities they caused. These states have thus established comprehensive social equity programs, one of the main objectives of which is to increase the rate of minority ownership of marijuana businesses-literally building equity in the state's marijuana marketplace. 152 Pursuant to these programs, many states give social equity applicants preference in marijuana business licensing-sometimes by awarding them extra points in a competitive licensing process and sometimes by making licensing opportunities exclusive to such applicants. 153 States give social equity applicants a range of other benefits as well, from exclusive funding programs, to fee waivers, to specialized training and educational opportunities. 154

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At the core of these social equity programs lies a law that facially discriminates against non-residents. States determine who qualifies as a social equity applicant based in part on whether they reside in an area that has been disproportionately impacted by the state's drug policies. 155 Since those disproportionate impact areas (DIAs) are invariably defined as communities within the state, it follows that social equity applicants necessarily must be residents of the state.
Limiting participation in social equity programs to state residents almost certainly violates the DCC, for the reasons we detailed above. 156 At the least, the programs will operate under a cloud of uncertainty if Congress legalizes marijuana without suspending the DCC. That would be a costly mistake on Congress's part, for three main reasons.
First, states do not have a good alternative to using DIAs within the state as the basis for determining who qualifies as a social equity applicant. The most obvious alternative would be to use race as a metric for determining social equity status, giving Black and other minority applicants preferential access to social equity benefits. But the use of explicit racial preferences would likely violate another constitutional provision: the Equal Protection Clause. 157 The Supreme Court has long held that all racial classifications are subject to strict scrutiny, even when the classification is designed to remedy the present effects of past discrimination. 158 In such cases, the Court has declared that the racial preference must be narrowly tailored to remediate a specific harm caused by the governmental unit enacting the policy, rather than ameliorating the effects of general social discrimination. 159 Strict scrutiny is almost always fatal, and the Court's test regarding reme- dial racial classifications would almost certainly doom the use of racial preferences in marijuana licensing. In fact, one court has already invalidated an Ohio program that reserved 15% of the state's medical marijuana business licenses for certain minority groups. 160 The court reasoned that the state would have to show that it had a history of discriminating against the same minority groups in the licensed marijuana market in order to justify giving those groups preference in awarding licenses. 161 Since the marijuana industry was brand new to the state, this was of course an impossible standard for it to meet. And, given the Supreme Court's standard for remedial racial classifications, the state could not rely on marijuana business licensing data from other states, racial disparities in marijuana arrest rates, or even the state's own history of discrimination in government procurement contracting. 162 The other alternative (aside from racial classifications) that states have is using nationwide DIAs instead of in-state DIAs for determining eligibility for social equity benefits. Because it is race and residency neutral, this approach would avoid Equal Protection and DCC problems. 163 However, the use of nationwide DIAs would be undesirable and impractical in several other respects. Most significantly, a state has little-to-no interest in rectifying the harms created by other states' discriminatory drug policies. We think it is exceedingly unlikely that the people of, say, Illinois, would make special grants, fee waivers, training opportunities, and other licensing benefits available to residents of, say, Florida, just because Florida enforced discriminatory drug policies.
Even if a state wanted to forge ahead with a social equity program to remediate the wrongs committed by other states, there is a thorny issue of how it would determine what constitutes a DIA in every other state. Within a given state, regulatory agencies identify DIAs based on a variety of metrics-the 161. See id. (citations omitted) ("The law requires that evidence considered by the legislature must be directly related to discrimination in that particular industry. Although the Defendants try to explain away the fact that the medical marijuana industry is new, such newness necessarily demonstrates that there is no history of discrimination in this particular industry . . . .").
162. Id. at *4-*6 (rejecting the state's reliance on these factors  168 The emergence of the national market would likely make it difficult for many smaller scale producers, including social equity applicants, to compete. If Congress suspends the DCC, social equity applicants would have a chance to grow and gain experience in an insular state-based market, and they would have more time to recoup investments already made under the current marketplace system. Importantly, federal legalization would also remove one of the biggest obstacles standing in the way of minority ownership of marijuana businesses: lack of access to traditional sources of capital. 169 If Congress suspends the DCC when it removes this obstacle, it will give social equity entrepreneurs the opportunity to utilize their newfound capital while facing limited competition in insular state markets. Otherwise, Congress will immediately throw such entrepreneurs into a fiercely competitive national market, just as they are first beginning to gain access to the resources they need to compete. The third reason Congress should not disrupt states' social equity programs is that the states' work in this area is still just beginning; they have not come close to achieving their goals of building social equity in their marijuana marketplaces. Simply put, marijuana businesses are still overwhelmingly owned by white people. 170 A January 2021 report reveals the depth of this problem. 171 It estimates that Black Americans "represent only 1.2% to 1.7% of all cannabis company owners." 172 Part of the problem is that many social equity programs have only just begun in earnest. 173 Were Congress to effectively end these programs at this early juncture-or, for current prohibition 174. Of course, the passage of even such limited measures is far from guaranteed. Some congressional Republicans have voiced opposition to federal reform bills that use tax funds to support social equity programs. See, e.g., Kyle Jaeger, Federal Marijuana Legalization Bill Clears House Committee, FILTER (Oct. 1, 2021), https://filtermag.org/federal-marijuana-legalization-bill/ (explaining that Republican Thomas Massie tried to remove the MORE Act's social equity provisions and quoting Massie as indicating that the provisions render t he bill "politically paralyzed"). If s uch programs are not included in federal reforms, it will be all the more important to preserve existing state social equity programs.
§ 3054(b)(2) (making funds available through Section 7(m) of the Small Business Act, 15 U.S.C. § 636(m)); 15 U.S.C. § 636(m)(1)(A)(iii) (describing the program as providing loans "in amounts averaging not more than $10,000"). For the reasons we explained above, the type of small, start-up businesses that would be eligible for these loans would have a greater chance of success in an insular state marketplace than in a national marketplace. 178. For example, if states decided to award licenses based on the CAOA's definition of "individuals adversely impacted by the War on Drugs," rather than on the DIA-based criteria they now use, they would exclude many people who are now eligible for state social equity licenses, including residents of DIAs who were arrested for marijuana offenses but never convicted, convicted of drug offenses not involving marijuana, or related to (or otherwise dependent upon) such a resident. Compare sources cited supra note 155 (describing state eligibility criteria for social equity programs), with 875 [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW states, before those programs can even begin-it would derail the states' nascent efforts to alleviate the ongoing inequities created by their decades-long prohibition policies. We recognize that some federal legalization bills would address some social equity issues. 174 The CAOA, for example, would provide some federal funding for states and localities that award marijuana business licenses to a narrow class of "individuals adversely impacted by the War on Drugs." 175 The bill defines that term to mean individuals: (a) with incomes below 250% of the federal poverty level for 5 of the past 10 years; who (b) have either been convicted of a marijuana crime or who have an immediate family member that has been convicted of such a crime. 176 While we applaud the attention federal lawmakers are beginning to give to this issue, we believe these proposed measures would be more effective if they supplemented, rather than supplanted, the social equity licensing programs the states are now pursuing. 177 Unfortunately, unless Congress suspends the operation of the DCC when it legalizes marijuana, it will (perhaps inadvertently) put an end to these state programs. This would force state lawmakers to scramble to find new-and probably less ambitious-ways to rectify past injustices. 178

Providing Transition Relief to Marijuana Producers
Congress should also suspend the DCC to provide "transition relief" to firms that have invested heavily in state-based marijuana markets. Broadly speaking, transition relief entails compensating or accommodating actors who are harmed by a change to a legal regime. 179 We believe that transition relief is warranted for the numerous businesses that invested in production licenses and facilities that will become uneconomical in a national marijuana marketplace. And, while there are many ways Congress could theoretically provide such relief-including delaying the effective date of federal legalization or making direct payments to producers hurt by the legal change-suspending the DCC constitutes a reasonable solution and perhaps the simplest one to pursue. 180 As we have explained, each state's marijuana laws require producers to obtain a license from the state and construct an in-state facility in order to access the state's marketplace. 181 These requirements come at a significant cost. Just the process of obtaining a license can cost hundreds of thousands of dollars (or more). Depending on the state, companies may need to: (i) pay substantial up-front license application fees; (ii) retain expert assistance to draft a competitive license application, including lawyers, architects, and security experts; (iii) secure real estate for their facility; (iv) hire a lobbyist to help obtain local approval for their facility; and (v) maintain a minimum level of required capital reserves. 182 Then there is the cost of building-out the physical production facility, which can easily run eight figures. 183  often well worth it in our current marketplace system, as states insulate producers from lower cost, out-of-state competition and may also restrict competition within the state by granting a limited number of production licenses.
If Congress replaces the current state-based system with a national marketplace, producers will no longer need to make these investments in every state in which they want to market their marijuana. Instead, they will be able to take advantage of economies of scale and will concentrate marijuana production in a small number of very large facilities. 184 These few facilities will likewise be concentrated in a small number of states: namely, those where environmental and regulatory conditions are most favorable. 185 And, from these large-scale facilities, producers will be allowed to distribute marijuana into other states across the country. This shift in production will render many marijuana businesses' existing investments in production licenses and facilities inefficient and uneconomical, virtually overnight. 186 Once firms are able to operate very large scale and/or outdoor facilities, firms stuck with existing, smaller scale (indoor) facilities may find themselves unable to compete in the national market.
Importantly, existing facilities that will become uneconomical in a national marketplace cannot just be chalked up to bad investment decisions. As a consequence of federal prohibition, state regulatory regimes have required businesses to make these investments in order to access their marketplaces. Businesses now must either make the requisite investments to construct (or 184. See Mikos, Interstate Commerce in Cannabis, supra note 11, at 889 ("[The] national market will likely favor larger producers that can take full advantage of economies of scale in the cultivation and processing of cannabis.").
185. Id. at 891 (noting that "the climate in a small number of states is ideally suited for outdoor cultivation of cannabis," allowing "producers in these states to avoid some of the costs peculiar to indoor cultivation"); id. at 893 ("[W]ith the advent of interstate commerce, producers will be able to move to the state that imposes the least onerous regulations on cannabis production.").
186. See, e.g., Alan Brochstein, Interstate Cannabis Commerce Is an Overblown Concern for Now, NEW CANNABIS VENTURES (July 11, 2021, 10:56 AM), https://www.newcannabisventures.com/interstate-cannabis-commerce-is-an-overblown-concern-for-now/ (opining that "[a] lot of cultivation assets would become unnecessary overnight should true interstate commerce open up"). acquire) an in-state production facility or else forgo the opportunity to participate in the local marketplace. This regulatory requirement makes transition relief appropriate. Indeed, transition relief may be particularly warranted where an actor makes "durable investments"-that is, fixed, long-term investments-pursuant to an extant regulatory requirement. 187 Existing marijuana producers have made such investments in the current insular state-based marketplace system. Further, without these investments, the marijuana legalization movement likely would have stalled; at the very least, we would likely not be having discussions about federal legalization today. The firms that made these durable investments in state reforms should not see those investments undermined because of federal legalization they helped to make possible.
Instead of abolishing the insular state-based marketplace system overnight, Congress can provide transition relief by suspending the DCC and, effectively, phasing in a national marketplace. Doing so will give producers who constructed otherwise uneconomical facilities more time to recover their investments and to prepare for the emergence of a national market. For social equity applicants and other smaller scale producers, suspending the DCC will provide a particularly valuable form of transition relief. As noted in Section III.B.3, it will give them an opportunity to access capital from traditional sources before they are subject to interstate competition, which will improve their odds of surviving once a national marketplace eventually arises.
As a final reason to provide transition relief, suspending the DCC may increase the likelihood of federal legalization by reducing opposition from actors who would be adversely affected by abrupt nationalization. 188 Indeed, there is some evidence that providing transition relief has already spurred reform in marijuana law: every state that has transitioned from medical-marijuana-only to medical-marijuana-plus-adult-use has provided some form of relief to existing medical marijuana businesses that could be hurt by that transition. 189 In the case of federal legalization, transition relief may be particularly important to passing legislation. The actors who would be adversely 190. See, e.g., Logue, supra note 180, at 224 (describing the anticipation argument). 191. See, e.g., Revesz & Kong, supra note 179, at 1583 ("What is now referred to as the 'new view' argues against transition relief on the ground that it can discourage actors from anticipating socially desirable legal changes.").
192. For instance, a layman or even a lawyer may reasonably take at face value the CAOA Discussion Draft's promises to "preserve[] the integrity of state cannabis laws" and to "recognize state law as controlling the possession, production, or distribution of cannabis" and incorrectly conclude that the insular state-marketplace system would continue under the CAOA. CAOA DISCUSSION DRAFT, supra note 5, at 1, 6. [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW affected by abrupt nationalization include not only the aforementioned marijuana producers but also the many states that would see their production industries (and the jobs generated thereby) decline in a national marketplace. One possible counterargument to providing marijuana producers with transition relief is that producers should be acting in anticipation of a nationalized market. That is, producers should know that federal legalization is coming and that it will necessarily result in interstate commerce, and they should act accordingly. 190 Indeed, the argument that private actors should be responsible for anticipating legal changes (rather than blindly relying on the status quo or assuming that future legal changes will be accompanied by transition relief) is common in legal transitions literature. 191 We do not believe that argument has great force here. It seems unrealistic to expect that most producers in the market today, many of whom likely do not have access to sophisticated counsel, can anticipate the timing and nature of federal legalization, let alone appreciate how the DCC's interaction with the various federal legalization proposals might affect their businesses. 192

Avoiding Federalism-Related Concerns
Legalizing marijuana without suspending the DCC would also raise two types of federalism-related concerns. First, abruptly nationalizing the marijuana market would be inequitable both to states that have already legalized marijuana and to states that have not yet done so. Second, transitioning immediately from state-based markets to a national market would prematurely [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW terminate state experimentation with different approaches to regulating marijuana. For states that have legalized marijuana, our fairness concern derives from the fact that federal legalization could cause marijuana production to migrate en masse to a handful of producer-friendly states. As we explained above, the introduction of interstate commerce is likely to spur migration of the industry as firms consolidate and relocate their operations to states with the most hospitable environmental or regulatory conditions. 193 This migration will be an economic boon for those select states that land the industry, but it will also cause immense disruption and economic losses for the rest of the legalization states. 194 We recognize that the transformation of the industry would generate some efficiency benefits as well, 195 but we do not think that it would be particularly fair to the states to transition to a national market just yet. Each state that has already legalized marijuana has invested considerable time and resources into developing a well-regulated marijuana marketplace. They have established regulatory agencies; staffed those agencies with commissioners, lawyers, investigators, researchers, finance experts, and public health experts; and those personnel have then invested countless hours in developing, implementing, and enforcing complex regulatory schemes. Importantly, states undertook these monumental efforts at the DOJ's insistence that they establish "strong and effective regulatory and enforcement systems" as a condition for not enforcing the federal marijuana ban. 196 In developing these systems, the DOJ also (arguably) required the states to adopt measures that restrict interstate commerce in marijuana. 197 The industries that arose under these state restrictions now produce billions in tax revenues and create thousands of jobs for states, with marijuana production playing a central role in driving these figures. 198 Indeed, generating new jobs and revenues were major reasons why 199. See, e.g., Mikos, Interstate Commerce in Cannabis, supra note 11, at 866 (stating that "[l]egalization is commonly touted as a means of creating new jobs and economic opportunities within a state").
200. This is particularly true for states that have recently legalized marijuana. These states will have made the same investments as other states in creating and regulating their marijuana production industries only to see those industries dissolve before the benefits can be fully realized.
201. We recognize, of course, that states have no constitutional obligation to ban marijuana, just because Congress does so. See, e.g., Printz v. United States, 521 U.S. 898, 935 (1997) ("Congress cannot compel the States to enact or enforce a federal regulatory program."). Rather, we simply point out that some states have chosen to cooperate with the federal government in pursuing a common marijuana policy (even a disagreeable one), while other states have chosen to forge a new path.
202. See Mikos, Interstate Commerce in Cannabis, supra note 11, at 893 (suggesting that states would have "missed the boat on creating a viable, local cannabis industry and the jobs associated therewith" if they did not legalize marijuana before the DCC created a national market The economic losses some states would suffer as a result of federal legalization-losses that Congress might not anticipate-could be staggering. Given these consequences, it seems unfair that Congress would suddenly change the terms of the DOJ's bargain, pulling the rug out from under the states by forcing them to accept interstate commerce in marijuana. At the very least, it seems inconsistent with claims that congressional legalization proposals will preserve state primacy in this field. Thus, while competition among states in marijuana production may eventually prove desirable, for now, states deserve more time to realize the benefits of the industry that their pioneering and persistent efforts made possible. 200 Instantly nationalizing the marijuana marketplace may also be inequitable to states that have yet to legalize marijuana. Arguably, these states have shown fidelity to federal policy by maintaining their prohibitionist marijuana laws. 201 Once Congress legalizes marijuana at the federal level, these states may want to follow suit. However, if Congress does not turn off the DCC, these late-moving states will likely reap few of the economic benefits of legalization. 202 They will instead be thrown into a competitive national marketplace full of states with existing marijuana industries. Established firms in those states will have a first-mover advantage; that is, by setting up their operations before the repeal of the federal ban, they will have gained an advantage against firms located in late-moving states once they are all forced to compete for a share of the national market. 203 The resulting market dynamics would arguably be perverse: states that flouted federal policy would gain a first-mover advantage at the expense of states that remained faithful to federal 204. A similar argument applies to states that have legalized marijuana only for medical use so far. If they choose to legalize adult-use marijuana after the federal ban is lifted, they will find themselves at a competitive disadvantage vis-a-vis current adult-use states in the new national marketplace.  204 At the least, current prohibition states may feel that this outcome would be unjust. Our second federalism-related concern pertains to the value states provide to our federalist system as laboratories of democracy. The idea is that states can test different public policies and thereby inform federal policymakers about the merits and demerits of different regulatory options. 205 This, in theory, allows federal policymakers (and policymakers in other states, for that matter) to learn from state experimentation, resulting in better national policy than if those policymakers were to write on a blank slate. Indeed, there are few areas of law where this model of federalism has proven more successful than in marijuana law. In the shadow of federal prohibition, our country's state-level experiments in legalizing marijuana have, over time, proved to be incredibly popular. Electorates in our most conservative states have voted to legalize the substance, and federal legalization seems inevitable. 206 State experimentation has allowed the proponents of reforms the opportunity to make their case to the nation.
While state experimentation in whether to legalize marijuana appears to have produced a consensus winner, experimentation in how to regulate marijuana once it is legalized remains unfinished. We described some of the extant variations in state regulation above, including differences in pesticide policies, testing, packaging, and labeling requirements, and licensing structures. 207 There are ongoing efforts to harmonize these (and other) areas of regulation across states, but those efforts remain nascent. 208 The federal government (and the states) could benefit from allowing these regulatory experiments to play out. The lessons learned could help inform lawmakers about how best to regulate a national marketplace.

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The federal government could further benefit from seeing how states regulate their marketplaces once marijuana is federally legal. As a result of federal prohibition, the states' marijuana experiments have heretofore been conducted under less-than-ideal conditions. 209 Originally, state experimentation was drastically limited by aggressive enforcement of the federal marijuana ban. Under this environment, early medical marijuana legalization states were reluctant to authorize marijuana businesses at all and instead expected patients to grow their own marijuana or obtain it (free of charge) from a caregiver. 210 As federal enforcement policy liberalized, states began to experiment with licensing and regulating marijuana businesses. 211 However, even this less hostile environment has cabined state experimentation. For instance, states have been unable to experiment in an environment where entrepreneurs have adequate access to traditional sources of capital, where they can utilize traditional electronic payment systems, and of course, where interstate commerce is permitted (though not necessarily required).
Before the federal government attempts to regulate a national marijuana marketplace, it would benefit from seeing how states regulate their marketplaces in a federal-legalization environment. For instance, as explained below in Section III.C, our proposal would leave states the option to engage in interstate commerce, should they so choose. We believe some states would almost certainly pursue this option by forming interstate compacts with other likeminded states. 212 In the course of negotiating and implementing these compacts, states will have to establish new rules to govern interstate commerce in marijuana and to coordinate their disparate track-and-trace programs, testing requirements, packaging and labeling standards, tax regimes, and so on. It would certainly be advantageous for the federal government to observe how even a small number of states attempt to solve such regulatory challenges before trying to condense thirty-nine-plus disparate state regulatory regimes into a coherent federal regulatory policy. Indeed, the CAOA discussion draft seeks input on how to " state-based seed-to-sale tracking systems." 213 We think the best answers to these difficult questions, and others like them, would be found by observing state experimentation in a federal-legalization environment. Suspending the DCC so that states may conduct such experiments would give the federal government this opportunity to learn.

C. How Congress Could Legalize Without Disruption
In the prior Section, we laid out several reasons why Congress should authorize states to regulate their marijuana markets free of the constraints normally imposed by the DCC. In this Section, we explain how Congress could confer such authorization on the states, while also minimizing the possible costs associated with state protectionism.

The Proposal
It is well-settled that Congress may override the default rules of the DCC and authorize states to restrict interstate commerce. 214 To do so, however, Congress's authorization "must be unmistakably clear." 215 It can leave no doubts about its intention to suspend the DCC's default rules limiting state power over interstate commerce.
Even though existing congressional reform proposals claim to preserve state authority over the marijuana industry, they would not satisfy this demanding test. All of them are preoccupied with preserving state authority against congressional regulation (e.g., the CSA). Most of them would do nothing to preserve state regulations against DCC challenge. 216 The STATES Act, for example, utterly fails to address the states' power to regulate interstate commerce in marijuana following federal legalization. 217 The CAOA would impose only a minor limitation on the DCC's application to state marijuana regulations. In relevant part, the CAOA would authorize each state to regulate marijuana transported into the state "in the same manner as though the cannabis had been produced in that State," and it would also prohibit the transportation of marijuana into a state where it is "intended, This legislation would allow states to decide whether and to what extent (i.e., medical or adult-use) marijuana is legal within the state, but it would not insulate key state marijuana regulations from DCC challenge. The quoted language is copied almost verbatim from the Wilson Act of 1890 and the Webb-Kenyon Act of 1913, 219 two Prohibition-era congressional statutes that give states only limited leeway to regulate interstate commerce in alcohol. Most notably, the Supreme Court has previously held that these statutes do not authorize states to discriminate against out-of-state economic interests. 220 Thus, even if Congress enacted the CAOA, the DCC would still prevent legalization states from banning imported marijuana or giving local residents preference in awarding marijuana licenses (say, as part of a social equity program). In fact, the Wilson and Webb-Kenyon Acts do not even shield neutral state regulations from DCC scrutiny. 221 In applying the two statutes, the Court has held that states are still required to prove to a judge that such regulations actually achieve some legitimate, non-protectionist purpose-"mere speculation" and "unsupported assertions" about the effects of a regulation will not suffice to sustain it. 222 In short, while the CAOA would "give[] the States regulatory authority that they would not otherwise enjoy," 223 the power bestowed on them may prove vanishingly small. 224 It would fail to forestall many of the problems To suspend the application of the DCC and to avoid leaving any doubts about Congress's intentions, we propose statutory language that would clearly preserve state regulatory authority against the DCC. We have modeled the language of our proposal on the McCarran-Ferguson Act of 1945 (MFA), 225 one of the few statutes the Court has found to completely suspend the DCC. 226 Congress passed the MFA in response to the Supreme Court's 1944 decision in United States v. South-Eastern Underwriters Ass'n, which, for the first time in the nation's history, held that "insurance" is "commerce" and thus subject to the protections afforded by the DCC. 227 The sudden change in the Court's Commerce Clause jurisprudence threatened to undermine the elaborate insurance codes states had developed and refined over the prior seventyfive years. 228 Indeed, South-Eastern Underwriters immediately spawned a host of DCC lawsuits challenging those state regulations; it was feared that if those lawsuits were allowed to proceed, the DCC would disrupt the insurance market, just as we believe the DCC would disrupt the marijuana market if Congress does not suspend the doctrine following federal legalization. 229 To avert this threatened disruption, Congress enacted the MFA. The short statute preserved state regulatory authority against the DCC. 230  While not necessarily an exemplar of statutory drafting, the MFA has successfully preserved state regulatory authority over the business of insurance for more than seventy-five years. Parroting the language used in the MFA would leave no doubt about Congress's intention to completely suspend application of the DCC and preserve state regulatory authority over the business of marijuana. 233 For reasons we explain below, we also include a sunset clause in the proposal, which would force Congress to reconsider the grant of authority after seven years.
In fu ll, here is the la nguage o f our proposal: Congress could easily insert this provision into any of the legalization bills now under consideration without necessitating further changes to those measures. Our proposal could also be adopted as a stand-alone measure before Congress legalizes marijuana, to address claims that the DCC might already a pply to m arijuana c ommerce. 234 regulations from preemption under congressional statutes that had suddenly become applicable to the business of insurance because of the Court's decision. Id.  § 1012(b) Our proposal would forestall the disruption threatened by the sudden and unanticipated application of the DCC to marijuana commerce, just like the MFA helped forestall the disruption threatened by the doctrine's sudden application to insurance markets. By authorizing states to limit interstate commerce in marijuana, Section A of the proposal would address the issues we identify above. It would (1) preserve state regulations that burden interstate commerce and thereby prevent federal legalization from creating dangerous gaps in the regulation of marijuana markets; (2) preempt a race to the bottom among states competing for a suddenly mobile marijuana industry; (3) preserve existing state social equity programs; (4) provide "transition relief" to marijuana producers-including, perhaps most significantly, businesses owned by social equity applicants; and (5) avoid the federalism-related concerns raised by nationalizing the marijuana marketplace and stunting the ongoing state experiments in regulating marijuana.

Declaration of Policy (A) Congress hereby declares that the continued regulation and taxation by the several States of the business of marijuana is in the pub
Of course, there are other ways that Congress could defuse the problems we have identified. To avert a race to the bottom and plug regulatory gaps, for example, Congress could pass a body of new regulations to govern the marijuana industry, establishing a federal floor for labor and employment practices, energy and water consumption, the tracking of marijuana products, and sundry other matters. To promote the equitable distribution of economic gains from the freshly legalized marijuana market, Congress could try to devise a new federal social equity licensing program. 235 And to compensate them for investments already made in soon-to-be defunct state regulatory regimes, Congress could issue payments to existing marijuana businesses.
Realistically, however, federal policymakers need time to study, devise, promulgate, and implement the regulations that would be needed to address these (and other) issues. 236 The few regulations contemplated by the CAOA are a start, but as presently written, the bill only begins to address the concerns that would be triggered by the DCC and the sudden emergence of a national not start running on the time period specified by the sunset clause in Section B of our proposal until Congress did legalize marijuana.
235. Although Congress could always try to create a federal social equity license, we are skeptical that any such program would constitute a satisfactory replacement for state-run social equity licenses invalidated by the DCC. See supra Section III.B.3.
236. Moreover, lawmakers would benefit from studying how marijuana markets function in a federal legalization environment before they attempt to establish national policies. See supra Section III.B.5 (noting that state lawmakers have not yet had the opportunity to develop and test regulations without having to consider the constraints imposed by the federal marijuana ban).

Accommodating Federal Regulation of the Marijuana Market
Importantly, Section A of the proposal leaves the door open for Congress to regulate the marijuana market. It preserves state power only against the generic judge-made default rules of the DCC-namely, only in the face of congressional "silence" and not against congressional regulation designed to govern the marijuana market. By suspending the application of the DCC, our proposal would simply give Congress and federal agencies time to promulgate any necessary federal regulations, without having to worry that the DCC would wreak havoc on marijuana markets before they could do so.
Section A would also leave the door open for states to allow interstate commerce in marijuana if they so desire. For example, a state could choose to permit non-residents to invest in its local marijuana industry, or it could permit firms to import and export marijuana. Notwithstanding the challenges raised by interstate commerce in marijuana, we believe that some states would welcome it, at least to a limited degree. Some producer states, for example, might seek to open new export markets for their local producers, and some consumer states might welcome imports to boost access to marijuana for their local consumers. In fact, a handful of states have already toyed with the idea of permitting interstate commerce in marijuana. 237 Nothing in our proposal would prevent like-minded states from pursuing interstate sales and/or investments, say, through an interstate compact, or from standardizing the rules they impose on marijuana products. As we explained in Section III.B, this state experiment with interstate commerce would benefit federal lawmakers as they contemplate rules for a national marketplace.
In Prior to the 1950s, federal and state law restricted banks from engaging in interstate branch banking. 239 However, inventive bankers began to circumvent this prohibition by utilizing entities known as bank holding companies. 240 The holding companies would purchase subsidiary banks across multiple states and would operate those banks "in a unitary fashion similar to branches." 241 Proponents of decentralized banking in Congress sought to ban this practice, believing that the interstate companies undermined the control states had traditionally exercised over branch banking within their borders and that interstate banking would lead to problematic levels of market concentration along with other economic harms. 242 However, rather than banning interstate bank holding companies entirely, Congress decided to give the states the power to approve or reject interstate bank acquisitions. 243 The Douglas Amendment thus prohibits any acquisition unless "specifically authorized by the statute laws of the State in which [the acquired] bank is located." 244 The Supreme Court subsequently interpreted the Amendment as removing any DCC objection to state restrictions on such acquisitions. 245 Notably, although [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW many states initially eschewed interstate banking, they slowly came to welcome it as economic conditions evolved. 246 The example of branch banking demonstrates that some states might welcome interstate commerce in marijuana, even if Congress gave them the power to ban it.

Limiting the Risk of Entrenchment
Although we recommend suspending application of the DCC, we also think it wise for Congress to limit the duration of the authority conferred by Section A. Thus, we have included a sunset clause in our proposal. Section B specifies that the authority conferred by Section A would expire after seven years. Congress could always renew Section A if it so desired, but doing so would require the passage of new legislation-i.e., the provision would not extend automatically. If Section A lapsed without being renewed, the default rules of the DCC would then apply to the business of marijuana, in the same way the DCC applies to (most) other businesses.
Including this sunset clause would help to limit the potential costs of suspending the DCC without necessarily sacrificing the benefits we foresee. 247 Most, if not all, of those benefits could be obtained in a modest amount of time. For present purposes, we believe a period of seven years would be long enough for federal and state lawmakers and existing marijuana businesses to defuse the harms that the immediate application of the DCC would otherwise inflict. This period could be lengthened (or shortened), but we are not yet convinced that the states or marijuana businesses need a permanent reprieve from the DCC. Lawmakers just need enough time to complete their novel experiments in marijuana governance; to replace state laws that will be threatened by the DCC; to establish some ground rules (e.g., a federal regulatory floor) for when states compete for marijuana jobs and investments; and to consider launching new marijuana markets in states that have previously eschewed them. Likewise, existing marijuana businesses just need enough time to recoup the investments they have made in state markets and to prepare for the onset of national competition. To be sure, no single time period will be ideal for all of these purposes. But even a sunset clause with a relatively short fuse should help lawmakers and businesses prepare for the challenges posed By contrast, the potential costs associated with state restrictions on interstate commerce will not necessarily diminish over time. 248 For example, state restrictions on interstate commerce will sacrifice some productive efficiency in the marijuana market. As we explained in Section III.B, in a national market, firms could achieve greater economies of scale by consolidating their production, and they could lower the cost of growing marijuana by relocating to states with climates more conducive to outdoor cultivation (e.g., California rather than New Jersey). To be sure, we do not believe that these efficiencies justify opening a national market right now, given the heavy tradeoffs involved-the race to the bottom, regulatory gaps, demise of social equity programs, loss of heavy investment in state-based systems, and so on. But once lawmakers and businesses are able to reduce some of these tradeoffs, the balance may tip in favor of a national market protected by the DCC rather than state markets protected from the DCC.
The sunset clause lessens the chance that the authority conferred by Section A will linger on after the burdens of that authority have begun to exceed its benefits. 249 Of course, even without a sunset clause, Congress could always repeal Section A if it came to believe the provision had outlived its usefulness. 250 But as experience with the CSA has demonstrated, it can be difficult to repeal a federal statutory provision-even a wildly unpopular one-once it is on the books. The very hurdles that make passage of federal legislation difficult in the first instance also (ironically) make it difficult to repeal federal laws that have outlived their utility. 251 The sunset clause simply requires the proponents of state authority to convince a later Congress that the benefits of suspending the DCC continue to outweigh the costs. And it puts the onus on those proponents-rather than the opponents of state authority-because, as Neither objection to protectionism, if levied against our proposal, would carry much weight. As a threshold matter, the inclusion of a sunset clause in our proposed statutory language dissipates whatever merit these objections would otherwise have. If our proposal does, in fact, spark new hostilities among the states, or if it needlessly saddles the market with inefficiencies, Congress need do nothing to eliminate these problems; the DCC would automatically put a stop to state protectionism at the expiration of the sunset clause. Before time runs out on the clause, proponents of continued protectionism would have to catalyze legislative action-to convince Congress that the benefits of preserving state authority continued to outweigh the costs, always a tall task, to be sure. We thus anticipate that our proposal would most likely serve as a temporary-but crucial-tool to smooth the transition to a national marketplace. Any resentment between states and any market inefficiencies that result from suspending the DCC would likely be short-lived. 257 This threshold matter aside, we do not believe that suspending the DCC would necessarily lead to more resentment and retaliation between the states. First, experience with the adoption of the MFA demonstrates that authorizing state protectionism does not always trigger hostilities that threaten the very fabric of the union. Since the MFA was passed more than seventy-five years ago, states have pursued sundry policies that would violate the DCC absent the MFA without causing rampant discord. 258 Rancor and retaliation, in short, do not inevitably flow from the authorization we propose, especially when there are good countervailing reasons for conferring such authorization on the states (as we have shown).
Second, states have already been engaging in rampant protectionism in the marijuana market without sparking hostilities. Working under the assumption that Congress has already authorized them to ignore the DCC, they have imposed outright bans on imports and exports of marijuana and the licensing of non-resident firms and investors. 259  have not led to the resentment and retaliation hypothesized by some champions of the DCC, let alone a threat to the states' political union. 260 There is no reason to think that sentiments would suddenly change if Congress were to expressly authorize the states to do what they have already been doing for more than a decade. In any event, our proposal would not forestall interstate cooperation. As noted above, given time, states might form interstate compacts, through which they could unwind some of the restrictions they now impose on interstate commerce in marijuana and thereby foster interstate harmony, rather than resentment and retaliation. 261 To be sure, state marijuana reforms have generated some friction among the states. A handful of prohibition states have complained loudly that legalization states are causing rampant spillover effects. In one notable lawsuit challenging Colorado's pioneering adult-use legalization measure, the states of Nebraska and Oklahoma claimed that they were being deluged with marijuana purchased (legally) in Colorado's new market and smuggled across state lines into their jurisdictions. 262 Even legalization states arguably have an axe to grind against other legalization states. For example, differences in marijuana taxation have driven some consumers to smuggle marijuana from low-tax states to high-tax states. 263 However, these frictions have arisen because of differences in state marijuana policies and not because of state protectionism (the core concern of the DCC). With or without the addition of our statutory language, existing federal proposals would do little to resolve these frictions. There would still be spillovers between prohibition states and legalization states and between states that adopt different approaches to legalization. 264 Suspending the DCC is unlikely to exacerbate these horizontal federalism tensions; in fact, it might help reduce these tensions because it would enable legalization states to combat [Vol. 49: 839, 2022] Legalization Without Disruption PEPPERDINE LAW REVIEW spillovers in ways the DCC would not otherwise permit. 265 One possibility, for example, is that a legalization state could restrict the amount of marijuana that non-residents can purchase. 266 This gesture, which would plainly violate the DCC once the federal government legalizes marijuana, 267 would help reduce the spillover effects that some legalization states have on prohibition states and other legalization states that impose higher taxes and other regulatory burdens. A market efficiency objection to our proposal would fare no better than the resentment and retaliation objection. 268 True enough, a national marketplace would allow marijuana producers to take advantage of economies of scale and more cost-efficient methods of cultivating marijuana (e.g., growing it outdoors rather than indoors). Simply put, the costs of producing marijuana, and thus, the price that consumers pay for the drug, would be lower in a consolidated national market compared to the insulated state markets we have today.
But the efficiency gains are only part of the story. For one thing, the sudden shift to a more efficient national marijuana market also comes with significant costs: the erosion of regulatory controls on the industry, the premature termination of state regulatory experiments, the demise of social equity programs, and so on. 269 In the near term, at least, we believe these societal costs far eclipse any gains that might follow from increasing productive efficiency. 270 [Vol. 49: 839, 2022]

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But perhaps less obviously, we also question whether drastically reducing the cost of marijuana is a goal lawmakers should be pursuing in the short run. 271 For decades, prohibition has artificially inflated the retail price of marijuana. Once marijuana is legalized at both the federal and state levels, the price of the drug is likely to plummet, making it "far and away the cheapest intoxicant on a per-hour basis." 272 As several prominent marijuana policy experts have surmised, it is "hard to imagine that such a dramatic price drop wouldn't affect patterns of use." 273 Put more bluntly, a precipitous decline in the price of marijuana is likely to dramatically boost consumption of the drug, and even many proponents of legalization would acknowledge that is not necessarily a good thing.
We recognize that there may be better ways to prevent a collapse in the price of marijuana in the long run. Most obviously, excise taxes raise the effective price consumers pay, but they do so without sacrificing productive efficiency, and they also generate revenues that can be put to good use. In the near term, however, the DCC would hamper state efforts to prevent a collapse in the price of marijuana. For instance, if a state attempted to impose a heavy excise tax to curb consumption, it may soon find consumers flocking to other states to purchase their marijuana. 274 Thus, until state or federal lawmakers can pass effective regulatory measures that will withstand scrutiny under the DCC, the best course of action may be to tolerate the inefficiencies of the insular state-based marketplace system and authorize states to continue to restrict interstate commerce in marijuana. 275 disparate harms that marijuana prohibition inflicted upon certain communities (especially communities of color). Policy choices that disrupt efforts to achieve restorative justice should be disfavored. 271. Cf. Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 139 S. Ct. 2449, 2481 (2019) (Gorsuch, J., dissenting) (describing how during and after alcohol prohibition, "robust competition in the liquor industry was far from universally considered an unalloyed good; lower prices enabled higher consumption and invited social problems along the way"). 275. Some skeptics of our proposal posit that suspending the DCC would benefit large multi-state operators (MSO) at the expense of social equity businesses. They reason that MSOs benefit from some states' restrictive licensing systems, which limit competition and create barriers to entry. They suggest that allowing states to restrict interstate commerce in marijuana-even temporarily-will perpetuate this unfair market structure in the states that have adopted restrictive licensing systems.
We agree that restrictive licensing can create problematic market structures, but we reject the

IV. CONCLUSION
As momentum for legalizing marijuana continues to build, the era of federal prohibition appears set to meet its long-overdue demise. While this would be a welcome development for the marijuana industry, the details of how Congress legalizes marijuana will have enormous consequences for that industry and the states that currently regulate it. In this Article, we shed light on a critical detail that Congress and other stakeholders have overlooked: The leading legalization bills would unleash the DCC on state marijuana laws, disrupting extant state-based markets and quickly replacing them with a national marijuana market. This abrupt transformation would create numerous problems. As we explain, it would produce troublesome regulatory gaps, spur a race to the bottom among states, undermine state social equity programs, create inequities for marijuana producers, and raise important federalism concerns.
This Article provides Congress with a much-needed solution to avoid these disruptions and smooth the transition to a national marijuana market. We propose specific statutory language that would suspend application of the DCC to states' marijuana laws, giving businesses and state regulators time to prepare for a national market and giving federal policymakers time to craft rules that will be needed once that market emerges. Our proposal also recognizes that the benefits of suspending the DCC are likely to fade over time. Accordingly, we include a sunset clause to ensure that a transition measure idea that unleashing the DCC is the best way to address the problem. For the reasons we have discussed throughout this paper, we doubt that social equity businesses and other small businesses would benefit from an abrupt transition to a national market. In general, we suspect that larger businesses would be far better positioned to exploit the economic opportunities created by the DCC. In this vein, we note that after we made an earlier draft of this Article publicly available, a variety of industry groups and reform groups-including social-equity-oriented groups-expressed support for suspending the DCC in letters to lawmakers. See, e.g., MARIJUANA POL'Y PROJECT, CANNABIS OPPORTUNITY AND ADMINISTRATION ACT-DISCUSSION DRAFT MARIJUANA POLICY PROJECT FEEDBACK 6 (2021), https://www.mpp.org/assets/pdf/policy/federal/MPP-CAO-Act-Comments.pdf; PARABOLA CTR., CAOA COMMENT 6 (2021), https://www.parabolacenter.com/pdf/Parabola%20Cen-ter%20CAOA%20Comments%208-31-21.pdf; MINORITY CANNABIS BUS. ASS'N, COMMENTS ON BEHALF OF THE MINORITY CANNABIS BUSINESS ASSOCIATION REGARDING THE CANNABIS ADMINISTRATION OPPORTUNITY ACT DISCUSSION DRAFT 9-11 (2021), https://minoritycannabis.org/wp-content/uploads/2021/09/Minority-Cannabis-Business-Assoc-CAO-Act-Comments-Final.pdf. Support from groups like the Marijuana Policy Project, the Parabola Center, and the Minority Cannabis Business Association casts significant doubt on the proposition that our proposal would somehow hurt social equity businesses. In any event, unleashing the DCC is a very blunt way to address problematic licensing programs. A more straightforward solution would be to change those licensing programs directly-for example, by lifting the artificial caps some states have imposed on the number of marijuana licenses they will issue. Such a change could be made without inflicting the DCC (and the collateral damage it would cause) on the states. does not become entrenched-unless, of course, Congress decides that continued suspension of the DCC is in the nation's best interest. While the Article makes a valuable contribution, the work on managing the transition from federal prohibition to legalization has only just begun. Here we briefly highlight just a sampling of questions that warrant further study.
First, we believe policymakers should consider whether to broaden our proposal to include state laws regulating the "business of hemp." Hemp and marijuana are both cannabis; the only material difference is that hemp contains no more than trace amounts of the psychoactive cannabinoid delta-9 THC. 276 Notwithstanding this difference, there is some overlap between the current marijuana and hemp markets. For example, the non-psychoactive cannabinoid CBD can be extracted from both hemp and marijuana, making hemp a suitable substitute for marijuana for some purposes. 277 Given the market overlap, there may be reasons to authorize states to restrict interstate commerce in the business of both forms of cannabis.
Second, while this Article focuses on commerce among the states, policymakers also need to consider international trade in marijuana. At least one leading legalization proposal already contemplates such trade, 278 but we think policymakers need to carefully weigh the consequences of opening international trade in marijuana too quickly. Most obviously, the sudden introduction of large quantities of inexpensive, imported marijuana could decimate U.S. marijuana producers, especially smaller scale producers like social equity applicants.
Finally, we believe lawmakers should carefully consider the scope of federal preemption in any legalization bill. The CSA contains a provision, § 903, that disclaims Congress's intent to preempt states' drug laws except in narrow circumstances. 279 If Congress de-schedules marijuana from the CSA, § 903 will no longer apply to marijuana. Going forward, Congress will need to specify the extent to which new federal marijuana regulations (if any) will preempt