MPP Warns Interstate Commerce Will Reshape Power Dynamics as Some South Dakota Industry Voices Mislead Patients

A Message From MPP Executive Director Adam J. Smith

From Rescheduling to Medical Interstate Commerce: What it means for patients, and what MPP is doing about it

The DOJ’s recent “Final Order” on rescheduling, assuming it stands, makes cannabis federally legal in the hands of state medical licensees (though perhaps only those who register with the DEA). Interstate commerce between licensed businesses would thus also be presumably federally legal, leaving only state laws — which might be ruled unconstitutional under the Dormant Commerce Clause (DCC) in states with existing markets — standing in the way. 

There will be three important things to watch for with respect to interstate commerce in medical cannabis:

1. New and expanding state medical programs might specifically permit interstate commerce. The nine states without medical programs will be under some pressure to adopt one under rescheduling. South Carolina, in fact, is statutorily required to do so. But there’s little political appetite in those states for legalizing commercial cannabis production. A medical program that specifically envisions legal product from out of state would lessen the state’s regulatory burden (they could regulate retail alone if they chose, or even limit sales to pharmacies), sidestep political resistance to commercial production, and get legal, tested, high-quality cannabis into patients’ hands sooner and less expensively than a state-gated program.

1a. It is possible that we’ll see a push to open commerce in some “established” medical states with inadequate patient access.

Note: MPP will work over the coming year to identify and help lead efforts in currently non-medical or quasi-medical states to adopt and approve patient-centered programs specifically anticipating commerce, allowing patients to access the best and most affordable medical cannabis available as soon as possible.

2. Expect one or more states with mature production industries to pass legislation allowing their medical licensees who meet federal criteria to ship products to licensees out of state. California, Oregon, and Washington all previously passed laws to allow their businesses to participate in commerce when Congress legalizes cannabis or the DOJ indicates tolerance. And while the language of those laws may need some clean-up to fit neatly with this version of rescheduling, we are likely to see that happen.

Note: MPP stands ready to work with allies in those and other states seeking to pass legislation allowing their medical licensees — operating in compliance with federal requirements — to ship products to states whose medical programs allow it.   

No. 16 — The Dormant Commerce Clause After Cannabis Rescheduling: Interstate Market Protectionism and Constitutional Pressure

3. Expect to see a successful federal lawsuit. Rescheduling changes the judicial calculus under the Constitution’s Dormant Commerce Clause. Federal circuits have split on whether state-legal cannabis industries are protected under the DCC. DCC protection would bar states with legal markets from discriminating against legal products from other states. The federal decisions finding no DCC protection have leaned on cannabis’ federal illegality. The Final Order almost certainly changes that for licensed medical operators. 

We expect stakeholders to sue states in multiple federal circuits (hoping to consolidate those into one suit), seeking to force open state markets on constitutional grounds. Interstate commerce in Schedule III drugs between DEA-approved entities is clearly covered by the DCC. A federal case will take time, but assuming rescheduling stands, we expect federal litigation to be ultimately successful.

Note: MPP has no plans to be involved in federal lawsuits seeking to open existing medical markets to commerce.

Weedpress take:

1. What MPP Is Actually Saying

The Marijuana Policy Project (one of the largest and most established national cannabis reform organizations) has publicly warned that interstate commerce will fundamentally reshape the cannabis industry. Their core points are:

• Once federal barriers to interstate commerce fall (through rescheduling + eventual legislation), large, well-capitalized companies will dominate.

• This will dramatically shift power dynamics away from the current model of many small-to-medium state-licensed operators.

• Smaller operators and some state-level activists who have benefited from closed or semi-protected state markets will lose influence and market share.

MPP is essentially saying: Federal reform + interstate commerce = industry consolidation. The companies best positioned to win are those with capital, compliance infrastructure, and scale — not necessarily the early local players who built influence under prohibition-era rules.

2. Why This Matters Right Now

The April 28, 2026 partial Schedule III order is the first major federal crack in the door. While it doesn’t immediately legalize interstate commerce, it:

• Creates a legal pathway for certain medical cannabis products to move between states.

• Signals that broader interstate commerce is coming (likely through future legislation or court rulings).

• Forces every state program to confront the reality that their current protections against out-of-state competition are temporary.

MPP is highlighting this transition because many state-level players are still pretending (or hoping) that the old model can continue.

3. Impact on South Dakota Specifically

In South Dakota, some industry voices and patient activists have a strong incentive to downplay or mislead about interstate commerce because:

• It threatens their current market position.

• It reduces their ability to control the narrative and policy locally.

• Many small operators are not prepared (capital, compliance, scale) for open competition.

This is why MPP’s warning is politically explosive in states like South Dakota.

4. Strategic Implications

For Local Industry & Some Activists:

• They have a strong incentive to either:

• Oppose or slow-walk full interstate commerce, or

• Mislead patients about how big the changes will actually be.

For Patients:

• Many patients are being told (directly or indirectly) that the current South Dakota program is stable and protective. Interstate commerce will likely disrupt that narrative.

5. Bottom Line Assessment

MPP’s warning on interstate commerce is strategically important for your work right now because:

• It validates the core thesis of my recent articles: Federal changes are real and will disrupt existing power structures.

• It gives WeedPress credible national backing when we criticize local players for misleading patients or prioritizing industry protection over transparency.

• It explains why some local industry voices and activists may be incentivized to downplay or resist full federal alignment.