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South Dakota can keep taxing and regulating marijuana sales, but not to medical or industrial use

South Dakota can keep taxing and regulating marijuana sales, but not to medical or industrial use

Will South Dakota OK pot again after 1st measure reversed?

In a unanimous decision on an obscure but still controversial issue, the court of appeals upheld a lower court ruling allowing South Dakota to set its own rules on taxing and regulating pot sales, even though a law has been in effect since 1989.

But now the case returns to the Supreme Court, which could resolve the question of whether the state could keep taxing and regulating marijuana sales that would be beyond the power of a federal criminal statute.

By a 2-1 margin, the court agreed that “a state may impose its own regulations on the use, distribution and possession of marijuana within its borders,” said Justice Sandra Day O’Connor, joined by the court’s four liberals, Justices Byron R. White, Ruth Bader Ginsburg, Stephen G. Breyer and Elena Kagan.

The ruling said South Dakota can tax sales of marijuana “as it does with other intoxicating substances” but must impose regulations that give up enough authority to the U.S. Congress to ensure federal law enforcement authorities cannot get a head start on enforcing existing federal law.

The ruling, issued Wednesday, left intact a lower court’s ruling in favor of the state’s marijuana tax law. But on appeal the state is arguing that the law should apply only to recreational pot, not to medical or industrial use, which are taxable.

“Allowing the State to regulate medical marijuana use and distribution would undermine federal objectives by interfering with the Federal government’s exclusive authority to regulate interstate commerce,” Roberts wrote for the court’s majority. “Federal law, however, has not addressed the State’s power to tax.”

The case has attracted wide publicity in South Dakota and the United States since Gov. Kristi Noem, a Democrat, proposed the tax and regulation law in 2010. The law was a major issue in the presidential election, with President Barack Obama’s campaign highlighting the ruling as a sign that the nation’s highest court had ignored federal law and favored a federal crackdown on medical marijuana use.

The case came after a federal statute had been declared unconstitutional by the 9th U.S. Circuit Court of Appeals. In its opinion, the 9th Circuit said that because the federal Controlled Substances Act has not explicitly authorized federal officials to arrest and seize marijuana,

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