Court Rules Import-Export Of Cannabis Equipment Into Legal States Is Exempt From Federal Ban

The U.S. Court of International Trade (CIT) determined that the import or export of drug paraphernalia to or from states where cannabis is legal represents an exception to the federal ban imposed by the Controlled Substances Act (CSA).

Eteros Technologies USA, a global leader in hemp and marijuana agriculture processing equipment filed suit after the U.S. Customs and Border Protection (CBP) blocked the import of equipment from Canada in 2021. CBP had deemed the parts prohibited "drug paraphernalia," citing the CSA.

The Authorization Exemption

The suit challenged CBP's determination by arguing that Washington State's legalization of cannabis and related paraphernalia triggers the authorization exemption. The federal authorization exemption states that Section 863 shall not apply to "any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items[.]"

Eteros announced the success of its case on October 5, via a press release. “CIT Judge Gary S. Katzmann ruled in favor of Eteros, confirming that state law authorizing the manufacture, possession, and distribution of cannabis harvesting equipment (and other cannabis-related paraphernalia) exempts Eteros from the prohibition against importing such merchandise into the United States,” as long as the goods are imported into a State like Washington which allows cannabis-related paraphernalia"

Eteros' legal counsel Richard O'Neill of Neville Peterson LLP called the ruling a win for the entire cannabis industry. 

"The Court's decision today is a huge win for the cannabis industry. States' authorization of persons to manufacture, possess, and/or distribute marijuana-related drug paraphernalia serves to trigger the federal authorization exemption, therefore exempting cannabis-related paraphernalia from the import prohibitions which prevent the importation of all other forms of drug paraphernalia."

Pivotal Ruling

The decision instructs the CBP to permit the importation of cannabis paraphernalia into states that have legalized the manufacture, distribution and possession of such items. The ruling comes at a pivotal time in the agricultural evolution of the cannabis industry, in which cannabis cultivators are increasingly automating their post-harvest workflow.

The National Cannabis Industry Association (NCIA) commended Eteros for challenging the CBP.

“Hopefully, this decision will ensure that these law-abiding businesses will no longer face unfair impediments to importation or exportation of legal products across our borders," said Aaron Smith, co-founder and CEO of NCIA.

Photo by Andy Li on Unsplash.