Court Opinion

ID: 3048048
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:23:11.982729+00
Date Added: 2024-06-11T11:49:16.368915
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 07-3837
                                     ___________

David Monson; Wayne Hauge,           *
                                     *
           Appellants,               *
                                     * Appeal from the United States
     v.                              * District Court for the
                                     * District of North Dakota.
Drug Enforcement Administration;     *
Department of Justice,               *
                                     *
           Appellees.                *
                                ___________

                               Submitted: November 12, 2008
                                  Filed: December 22, 2009
                                   ___________

Before MELLOY, BOWMAN, and SMITH, Circuit Judges.
                         ___________

BOWMAN, Circuit Judge.

       David Monson and Wayne Hauge appeal from an order of the District Court1
dismissing their action for a declaration that the Controlled Substances Act (CSA or
Act), 21 U.S.C. §§ 801–971, does not apply to their planned cultivation of Cannabis
sativa L. (cannabis) pursuant to licenses they obtained from the State of North Dakota.
Monson and Hauge argue that the District Court erred by failing to accept as true the
factual allegations in their complaint, by finding that cannabis cultivated for industrial

      1
        The Honorable Daniel L. Hovland, Chief Judge, United States District Court
for the District of North Dakota.
use under state law is subject to regulation under the CSA, and by determining that
Congress has authority under the Commerce Clause to regulate their cultivation of
cannabis. The Drug Enforcement Administration (DEA) and the Department of
Justice (DOJ) argue that although the District Court properly dismissed the complaint,
the court should have dismissed on jurisdictional grounds. We affirm the judgment
of the District Court in all respects.

         Monson and Hauge are North Dakota farmers who wish to grow cannabis
pursuant to state law legalizing and regulating the cultivation of "industrial hemp."
N.D. Cent. Code § 4-41-01. They intend to sell parts of the harvested cannabis for
industrial use. Both industrial hemp and the drug commonly known as marijuana
derive from the plant designated Cannabis sativa L. In general, drug-use cannabis is
produced from the flowers and leaves of certain strains of the plant, while industrial-
use cannabis is typically produced from the stalks and seeds of other strains of the
plant. All cannabis plants contain tetrahydrocannabinol (THC), the substance that
gives marijuana its psychoactive properties, but strains of the plant grown for drug use
contain a higher THC concentration than those typically grown for industrial use.
Monson and Hauge acknowledge that the plants they seek to grow are of the species
Cannabis sativa L. They contend, however, that cannabis grown for industrial
purposes, i.e., industrial hemp as defined by the North Dakota statute, is not marijuana
within the meaning of the CSA and thus is not subject to federal regulation. Monson
and Hauge filed this lawsuit in the District Court seeking a declaration that their
"cultivation of industrial hemp pursuant to and in accordance with the licenses issued
. . . by the North Dakota Agriculture Commissioner does not and will not violate the"
CSA. Compl. at 21. They assert that the CSA could not be applied to their cultivation
of industrial hemp under state law without violating the Commerce Clause. The DEA
and the DOJ filed a motion to dismiss for lack of jurisdiction or, in the alternative, for
failure to state a claim upon which relief could be granted.

                                           -2-
       The District Court granted the DEA and DOJ's motion to dismiss. The court
declined to dismiss on jurisdictional grounds and, proceeding to the merits, held that
the cannabis plants Monson and Hauge proposed to cultivate fell within the CSA's
definition of marijuana and thus that their planned cultivation of industrial hemp under
state law was subject to regulation under the CSA. The court also concluded that
Congress has authority under the Commerce Clause to regulate the manufacture of all
cannabis plants, regardless of the THC concentration or ultimate use of those plants.
Monson and Hauge appeal the dismissal of their complaint, and the DEA and the DOJ
appeal the District Court's jurisdictional rulings. We first discuss the federal and state
statutes before turning to the specific issues raised on appeal.

       The CSA establishes a comprehensive federal system to regulate the
manufacture and distribution of controlled substances, making it unlawful to
"manufacture, distribute, or dispense" any controlled substance "[e]xcept as authorized
by" the Act. 21 U.S.C. § 841(a)(1). The CSA defines "manufacture" to include
"production," id. § 802(15), and it in turn defines "production" to include the
"planting, cultivation, growing, or harvesting of a controlled substance," id. § 802(22).

       The CSA categorizes controlled substances into five separate schedules,
depending on the characteristics of a particular substance. Id. §§ 811, 812.
Marijuana2 is listed in Schedule I, the most restrictive schedule, because, like the other
substances listed, it "has a high potential for abuse," "no currently accepted medical
use in treatment in the United States," and "a lack of accepted safety for use . . . under
medical supervision." Id. § 812(b)(1)(A)–(C). Marijuana3 is defined in the CSA to

      2
       Although the CSA uses the spelling "marihuana," we use the more common
spelling "marijuana."
      3
        The CSA defines marijuana to include "all parts of the plant Cannabis sativa
L., whether growing or not; the seeds thereof; the resin extracted from any part of such
plant; and every compound, manufacture, salt, derivative, mixture, or preparation of
such plant, its seeds or resin. Such term does not include the mature stalks of such

                                           -3-
include "all parts of the plant Cannabis sativa L." and anything made therefrom
except, in general, mature stalks, fiber produced from those stalks, sterilized seeds,
and oil from the seeds. Id. § 802(16). Under the CSA, any person seeking to
manufacture a Schedule I controlled substance must obtain a registration from the
DEA. Id. §§ 822, 823. Before issuing a registration, the DEA considers several
factors, including the applicant's "maintenance of effective controls against diversion,"
"compliance with applicable State and local law," "prior conviction record," and "past
experience in the manufacture of controlled substances." Id. § 823(a).

       In 1999, the North Dakota Legislative Assembly legalized the growth,
possession, and sale of "industrial hemp." N.D. Cent. Code § 4-41-01. The state
statute defines industrial hemp as "(cannabis sativa l.), having no more than
three-tenths of one percent" THC. Id. Unlike the CSA, the North Dakota statute
distinguishes among cannabis plants based on THC concentration. The state requires
licensing for persons wishing to cultivate industrial hemp, imposes strict THC limits
in an effort to prevent the cultivation of cannabis plants for drug use, and attempts to
ensure that only those parts of the industrial hemp plant that are excluded from the
CSA's definition of marijuana will leave a farmer’s property and enter interstate
commerce. Id. § 4-41-02. Recognizing that industrial hemp as defined by the state
is regulated under the CSA as marijuana, the state statute originally provided that any
person seeking to grow industrial hemp in North Dakota was required to comply not
only with the state's licensing requirements but also with the CSA's registration
requirements.

      Shortly after the state statute was enacted, the North Dakota Commissioner of
Agriculture (Commissioner) requested that the DEA waive the CSA's registration

plant, fiber produced from such stalks, oil or cake made from the seeds of such plant,
any other compound, manufacture, salt, derivative, mixture, or preparation of such
mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized
seed of such plant which is incapable of germination." 21 U.S.C. § 802(16).

                                            -4-
requirement for all North Dakota farmers seeking to grow industrial hemp as defined
and regulated by state law. In February 2007, the DEA denied the Commissioner’s
request, noting that "Congress expressly commanded the [DOJ] to take the lead in
controlling licit and illicit drug activity through enforcement of the CSA. . . . [F]or
[the] DEA to simply turn over to any state the agency's authority and responsibility
to enforce the CSA . . . would be directly at odds with the Act." Letter from DEA to
Comm'r at 2–3 (Feb. 1, 2007). The DEA also cautioned that registration pursuant to
the CSA was necessary for the cultivation of industrial hemp because, unlike the
North Dakota statute, the CSA includes all Cannabis sativa L. plants in its definition
of marijuana, regardless of THC concentration.

       Thereafter, the Commissioner submitted to the DEA applications for
registration on behalf of Monson and Hauge for their proposed industrial hemp
cultivation. In March 2007, less than one month after submitting those applications,
the Commissioner sent the DEA a letter demanding action on the applications by April
1, 2007. The DEA responded that the Commissioner's proposed deadline was
unrealistic given the agency's obligations to comply with notice and comment
requirements, conduct background investigations, and complete onsite inspections of
Monson and Hauge's manufacturing facilities. The North Dakota Legislative
Assembly then amended the state statute by eliminating the DEA-registration
requirement. In light of the DEA's pronouncements, however, Monson and Hauge did
not immediately begin cultivating industrial hemp under their state licenses. Instead,
they filed a lawsuit in the District Court seeking a declaration that the CSA does not
apply to persons seeking to cultivate industrial hemp pursuant to North Dakota law.

        Before we address the claims raised on appeal by Monson and Hauge, we first
address the DEA's various complaints of jurisdictional error. The agency argues that
the District Court erred in exercising jurisdiction over the complaint because Monson
and Hauge lacked standing to pursue their claims; their claims were unripe; and even
if their claims were justiciable, the CSA confers exclusive jurisdiction over the matter

                                          -5-
to the federal courts of appeals. We review the District Court's determination
regarding subject matter jurisdiction de novo. See Keene Corp. v. Cass, 908 F.2d 293,
296 (8th Cir. 1990).

          "Article III standing requires a party to show actual injury, a causal relation
between that injury and the challenged conduct, and the likelihood that a favorable
decision by the court will redress the alleged injury." Minn. Citizens Concerned for
Life v. Fed. Election Comm'n, 113 F.3d 129, 131 (8th Cir. 1997). The DEA argues
that Monson and Hauge have not suffered an actual injury because they have not been
subjected to or threatened with federal criminal prosecution for a violation of the
CSA. But a party need not expose himself "to arrest or prosecution under a criminal
statute in order to challenge [that] statute in federal court." Ark. Right to Life State
Political Action Comm. v. Butler, 146 F.3d 558, 560 (8th Cir. 1998). Instead, "[w]hen
government action . . . is challenged by a party who is a target or object of that action,
. . . 'there is ordinarily little question that the action . . . has caused him injury, and that
a judgment preventing . . . the action will redress it.'" Minn. Citizens Concerned for
Life, 113 F.3d at 131 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561–62
(1992) (alterations by this Court)).

       We agree with the District Court that Monson and Hauge have adequately
established that they are targets of DEA action and thus have shown actual injury
sufficient to confer standing. Monson and Hauge, experienced farmers with the skills
necessary to cultivate industrial hemp, applied for and obtained state licenses to
engage in that activity. They have unequivocally declared their intent to cultivate
industrial hemp and have clearly described the specifics of their proposed farming
operations, including the location and number of plants to be grown and the harvesting
and processing procedures to be utilized. The DEA's letter to the Commissioner
plainly states that the agency considers Monson and Hauge's proposed cultivation of
industrial hemp pursuant to their state licenses to be the manufacture of a Schedule I
controlled substance that, under the CSA, is unlawful without a registration from the

                                              -6-
agency. As noted by the District Court, Monson and Hauge "arguably stand ready,
willing, and able to cultivate industrial hemp under their state licenses and they face
an imminent threat of federal criminal prosecution if they do so." Order of Nov. 28,
2007, at 11. When a plaintiff "alleges a threat of prosecution that 'is not imaginary or
wholly speculative,'" he has standing to challenge a statute. St. Paul Area Chamber
of Commerce v. Gaertner, 439 F.3d 481, 485 (8th Cir. 2006) (quoting Babbitt v.
United Farm Workers Nat’l Union, 442 U.S. 289, 302 (1979)). In these
circumstances, Monson and Hauge do not allege merely a conjectural or hypothetical
injury. See N.H. Hemp Council, Inc. v. Marshall, 203 F.3d 1, 5 (1st Cir.) (concluding
that the threat of federal prosecution was realistic enough to establish actual
injury—and standing—where the DEA "made clear . . . by its conduct" that it
considered industrial hemp cultivation unlawful under the CSA), cert. denied, 531
U.S. 828 (2000). Because Monson and Hauge have adequately established actual
injury, they have standing to pursue their claims.

       The DEA also contends that Monson and Hauge's claims are not ripe for review
because they have not exhausted the agency's administrative process. According to
the DEA, Monson and Hauge should be required to wait for the agency's decision on
their CSA registration applications before seeking judicial review. If the DEA denies
registration, Monson and Hauge may then seek judicial review. The DEA's argument
was squarely addressed and rejected by the First Circuit in New Hampshire Hemp
Council. In that case, a farmer sought a declaration from the district court that
industrial hemp was not marijuana under the CSA. The DEA argued that before
pursuing declaratory relief, the farmer was required to comply with the CSA's
registration requirements. The First Circuit rejected the DEA's argument, noting that

      whether viewed as a ripeness objection or one based on a failure to
      exhaust remedies, the objection is unsound here, even if there were some
      realistic prospect of a license for [the farmer]. [The farmer]’s position
      is that his proposed production of industrial products is not marijuana
      production under the [CSA] and therefore not subject to the [CSA] at all,

                                          -7-
      whether as a prohibition or licensing scheme. If he were correct, it is
      hard to see why he should be forced to apply for a license.

Id. at 5–6. The same holds true in this case. Monson and Hauge applied for
registration under the CSA only because state law initially required such
registration—in addition to a state license—for the cultivation of industrial hemp.
After the Commissioner received written notice from the DEA that those registration
applications would be treated under the CSA as applications to manufacture a
Schedule I controlled substance, the North Dakota legislature amended state law to
eliminate the provision requiring DEA registration for the cultivation of industrial
hemp. Like the farmer in New Hampshire Hemp Council, Monson and Hauge
contend that their proposed activities are not governed by the CSA and are outside the
reach of the DEA's statutory authority. We agree with the First Circuit, and we
conclude that in the circumstances of this case, Monson and Hauge should not be
required to apply for registration pursuant to a regulatory scheme that they contend
does not apply to their activities in the first place.

       We also note that "[a] party may be excused from exhausting administrative
remedies . . . if further administrative procedures would be futile." Ace Prop. & Cas.
Ins. Co. v. Fed. Crop Ins. Corp., 440 F.3d 992, 1000 (8th Cir. 2006). As described
above, the DEA has previously indicated in writing that applications for registration
to grow industrial hemp in North Dakota will be treated under the CSA as applications
to manufacture a Schedule I controlled substance. The DEA has not advised this
Court that it will change its position on the treatment of industrial hemp under the
CSA, and Monson and Hauge should not be required to further pursue a futile course
of action.

      The DEA cites our decision in Great Plains Coop v. Commodities Futures
Trading Commission, 205 F.3d 353 (8th Cir. 2000), in support of its contention that
Monson and Hauge cannot be allowed to circumvent agency procedures by filing a

                                         -8-
lawsuit before the agency rules on their registration applications. We find Great
Plains to be distinguishable. The statute at issue in that case, the Commodity
Exchange Act, provides that a person aggrieved by a Commodities Futures Trading
Commission (CFTC) decision or targeted by a CFTC administrative action is entitled
to a full hearing on the record before the agency or an administrative law judge (ALJ).
See 7 U.S.C. §§ 8, 9. We held in Great Plains that the complaint filed in the district
court was "an impermissible attempt to make an 'end run' around the statutory
scheme." 205 F.3d at 355. The DEA cites no authority in the CSA entitling an
aggrieved person to a similarly exhaustive administrative appeal process. Moreover,
the plaintiff in Great Plains had not received any indication from the ALJ that the
CFTC's interpretation of the Commodity Exchange Act would be upheld—the
administrative process was ongoing and the outcome was not foreseeable. Here, by
contrast, the DEA has already indicated in no uncertain terms its intent to treat
industrial hemp as a Schedule I controlled substance under the CSA and to require
registration pursuant to the Act before industrial hemp can be grown under North
Dakota law. In these circumstances, we cannot say that the District Court erred by
concluding that further attempts to exhaust the administrative process would be futile.

       The DEA argues that even if Monson and Hauge have standing and their claims
are ripe for review, the CSA strips subject matter jurisdiction from the District Court
and vests it exclusively in the federal courts of appeals. Under the CSA, "any person
aggrieved by a final decision" of the DEA under the Act "may obtain review of the
decision" in the appropriate court of appeals. 21 U.S.C. § 877. Explicit in this grant
of jurisdiction to the courts of appeals is the requirement that the DEA issue a "final
decision" under the Act. Here, Monson and Hauge did not file an action in the District
Court to challenge a final decision of the DEA under the Act. They did not challenge,
for example, the denial of a license application, the revocation of an existing license,
or the promulgation of a rule. Rather, Monson and Hauge filed their complaint in the
District Court to obtain a declaration that the CSA does not apply to their planned
cultivation of industrial hemp under North Dakota state law and that, as a result, they

                                          -9-
cannot be prosecuted under the Act. In exercising jurisdiction over the action, the
District Court reasoned that because there was no final decision of the DEA under the
CSA at issue, § 877 did not bar Monson and Hauge from seeking declaratory relief in
that court. We agree.

        The district court in PDK Labs Inc. v. Reno, 134 F. Supp. 2d 24, 29 (D.D.C.
2001), exercised jurisdiction over a challenge to a DEA interpretive letter after
concluding that the letter was not "a final determination, finding, or conclusion within
the meaning of § 877." In Neogen Corp. v. U.S. Department of Justice, No. 05-506-
JBC, 2006 WL 3422691, at *9 (E.D. Ky. Nov. 28, 2006), the district court, citing
PDK, asserted jurisdiction over an action because the DEA's denial of authorization
to import a Schedule I substance was not a final decision under the CSA; "the denial
was merely the initial step toward the attainment of a final agency position." And in
Novelty, Inc. v. Tandy, No. 1:04-CV-1502-DFH-TAB, 2006 WL 2375485, at *7 (S.D.
Ind. Aug. 15, 2006), the district court determined that it had jurisdiction over an action
challenging the DEA's practice of using interpretive letters to revise substantive
compliance requirements, a practice which the plaintiff claimed violated notice and
comment provisions. The court in Novelty, Inc., held that "the most persuasive view
is that § 877 does not apply where there has been no formal finding, conclusion, or
determination based on a record that provides a meaningful basis for judicial review."
Id. at *3.

       The DEA cites the decision of the District of Columbia Circuit in John Doe,
Inc. v. Drug Enforcement Agency, 484 F.3d 561 (D.C. Cir. 2007), in support of its
argument that § 877 strips the District Court of subject matter jurisdiction to consider
Monson and Hauge's complaint. In John Doe, Inc., the DEA denied an application for
registration to import a generic version of a Schedule I controlled substance, and the
applicant sought redress in the district court. The district court dismissed the case for
lack of subject matter jurisdiction, citing § 877. The District of Columbia Circuit
affirmed, holding that the DEA's denial of the registration application was "final" for

                                          -10-
purposes of § 877 and that the sole avenue for judicial review was through the courts
of appeals. 484 F.3d at 570. Unlike the applicant in John Doe, Inc., however,
Monson and Hauge did not file their complaint in the District Court seeking review
of a final action by the DEA under the CSA. Instead, Monson and Hauge seek a
declaration that they cannot be criminally prosecuted for cultivating industrial hemp
pursuant to their state-issued licenses.

       We are not convinced that § 877 precluded the District Court from assuming
jurisdiction over the action. There was no final decision of the DEA to be reviewed
and the crux of Monson and Hauge's action is a challenge to the applicability of the
CSA to their proposed activities and the authority of the DEA under the CSA to
regulate those activities in the first instance. In these circumstances and on this
record, we conclude that the District Court had jurisdiction to consider the claims for
declaratory relief raised by Monson and Hauge.

       We now turn to Monson and Hauge's contention that the District Court erred
in dismissing their complaint on the merits. "We review the grant of a motion to
dismiss de novo, taking all well pleaded factual allegations as true and drawing all
reasonable inferences in favor of the plaintiff." Katun Corp. v. Clarke, 484 F.3d 972,
975 (8th Cir. 2007). But we, like the District Court, are free to "ignore legal
conclusions, unsupported conclusions, unwarranted inferences and sweeping legal
conclusions cast in the form of factual allegations." Wiles v. Capitol Indem. Corp.,
280 F.3d 868, 870 (8th Cir. 2002). Dismissal is proper "'if it appears beyond doubt
that the plaintiff can prove no set of facts to warrant a grant of relief.'" Knieriem v.
Group Health Plan, Inc., 434 F.3d 1058, 1060 (8th Cir.), cert. denied, 548 U.S. 905
(2006).

       Monson and Hauge first argue that in granting the DEA's motion to dismiss, the
District Court erred by failing to "accept as true the allegations that the industrial
hemp plant itself is useless as drug marijuana and that there is no way industrial hemp

                                         -11-
could be diverted to use" as drug marijuana. Br. of Appellants at 20. This argument
is without merit. The "facts" that Monson and Hauge claim were improperly rejected
by the District Court amount to nothing more than "sweeping legal conclusions" and
"unwarranted inferences" that the court was not required to consider in ruling on the
motion to dismiss. Wiles, 280 F.3d at 870.

       Under the CSA, marijuana is defined to include all Cannabis sativa L. plants,
regardless of THC concentration. See 21 U.S.C. § 802(16). The CSA likewise makes
no distinction between cannabis grown for drug use and that grown for industrial use.4
See id. In United States v. White Plume, 447 F.3d 1067, 1069 (8th Cir. 2006)
(quoting ordinance) (alterations in White Plume), we held that "industrial hemp,"
defined by tribal ordinance as "[a]ll parts and varieties of the plant Cannabis sativa"
that "contain a [THC] concentration of one percent or less by weight," was subject to
regulation as a Schedule I controlled substance under the CSA because as a species
of Cannabis sativa L., it fell squarely within the definition of marijuana set forth in the
CSA. We also noted that "[t]he language of the CSA unambiguously bans the
growing of marijuana, regardless of its use," id. at 1072, and we concluded that
"[b]ecause the CSA does not distinguish between marijuana and hemp in its
regulation, and because farming hemp requires growing the entire marijuana plant
which at some point contains psychoactive levels of THC, the CSA regulates the
farming of hemp," id. at 1073. Considering the legislative history of the CSA, we
found "no evidence that Congress intended otherwise" than to ban the growth of all
varieties of the Cannabis sativa L. plant absent compliance with the registration
requirements of the CSA. Id. at 1072; see also N.H. Hemp Council, 203 F.3d at 6–8
(concluding that cannabis cultivated for industrial use and possessing a low THC
concentration is nevertheless marijuana under the CSA and is subject to regulation by
the DEA); cf. United States v. Curtis, 965 F.2d 610, 616 (8th Cir. 1992) (observing

      4
        As previously noted, the statutory definition of marijuana excludes certain
parts of the Cannabis sativa L. plant not relevant to this discussion.

                                           -12-
that male marijuana plants, which may have lower THC concentrations than female
plants, are still marijuana plants for sentencing purposes).

       In ruling on the DEA's motion to dismiss, the District Court was not required
to accept as true Monson and Hauge's alleged facts that were nothing more than
"unsupported conclusions, unwarranted inferences and sweeping legal conclusions"
directly at odds with the CSA and Circuit precedent. Wiles, 280 F.3d at 870. In sum,
the District Court properly construed and dismissed the complaint; the court did not
err in rejecting Monson and Hauge's alleged facts, and it properly concluded that
industrial hemp as defined by the North Dakota statute is marijuana for purposes of
the CSA.

       Monson and Hauge next argue that the District Court erred by concluding "that
the CSA can constitutionally be extended to reach the proposed intrastate cultivation
of industrial hemp under North Dakota law." Br. of Appellants at 27. According to
Monson and Hauge, because the only portion of the industrial hemp plant that would
leave their North Dakota farms and enter interstate commerce is the unregulated
portions of the plant—the mature stalk, fiber, non-viable seed and oil—Congress has
no authority to regulate their state-sanctioned cultivation of cannabis. It is well
established, and Monson and Hauge do not dispute, that enactment of the CSA was
within Congress's authority under the Commerce Clause. See, e.g., United States v.
Davis, 288 F.3d 359, 362 (8th Cir.) (upholding the CSA as a valid exercise of
congressional authority under the Commerce Clause), cert. denied, 537 U.S. 822
(2002). What Monson and Hauge do dispute, however, is Congress's authority under
the Commerce Clause to regulate what they describe as purely intrastate activity. Like
the District Court, we find this argument unavailing.

       Congress possesses the authority both "[t]o regulate Commerce with foreign
Nations, and among the several States," U.S. Const. art. I, § 8, cl. 3, and to pass
legislation that constitutes a reasonable means to effectuate such regulation, id. art. I,

                                          -13-
§ 8, cl. 18. Pursuant to this authority, Congress "may regulate the use of the channels
of interstate commerce"; "the instrumentalities of interstate commerce, or persons or
things in interstate commerce"; and "those activities that substantially affect interstate
commerce." United States v. Lopez, 514 U.S. 549, 558, 559 (1995).

         In connection with its enactment of the CSA, Congress issued findings and
declarations regarding the effects of drug use on the public health and welfare and the
effects of intrastate drug activity on interstate commerce. Congress acknowledged
that "[m]any of the drugs included within [the CSA] have a useful and legitimate
medical purpose and are necessary to maintain the health and general welfare of the
American people," 21 U.S.C. § 801(1), but it found that "[t]he illegal importation,
manufacture, distribution, and possession and improper use of controlled substances
have a substantial and detrimental effect on the health and general welfare of the
American people," id. § 801(2). Although Congress found that traffic in controlled
substances could be largely attributed to interstate and foreign commerce, it
nevertheless declared that manufacture, local distribution, and possession have a
"substantial and direct effect upon interstate commerce," id. § 801(3), contributing "to
swelling the interstate traffic in such substances," id. § 801(4). Thus, according to
Congress, because "[c]ontrolled substances manufactured and distributed intrastate
cannot be differentiated from [those] manufactured and distributed interstate,
. . . [f]ederal control of the intrastate . . . traffic in controlled substances is essential to
the effective control of the interstate . . . traffic" in those substances. Id. § 801(5)–(6).

        The Supreme Court's decision in Gonzales v. Raich, 545 U.S. 1 (2005),
disposes of Monson and Hauge's argument that the CSA cannot be interpreted to reach
their intrastate cultivation and processing of cannabis without violating the Commerce
Clause. In Raich, users and growers of medical marijuana under a California statute
sought a declaration that the CSA was unconstitutional as applied to their intrastate
activities. The Supreme Court held that Congress has authority under the Commerce
Clause to regulate marijuana that is grown and consumed intrastate for

                                             -14-
non-commercial, personal medical reasons. The Court explained that "Congress has
the power to regulate activities that substantially affect interstate commerce," and that
as part of this well-established power, Congress is permitted to "regulate purely local
activities that are part of an economic 'class of activities' that have a substantial effect
on interstate commerce." Id. at 17. The Court held that it was not necessary to
determine whether the activities in question, "taken in the aggregate, substantially
affect interstate commerce in fact, but only whether a 'rational basis' exists for so
concluding. Id. at 22. Because of "the enforcement difficulties that attend
distinguishing between marijuana cultivated locally and marijuana grown elsewhere
and concerns about diversion into illicit channels," the Court had "no difficulty
concluding that Congress had a rational basis for believing that failure to regulate the
intrastate manufacture and possession of marijuana would leave a gaping hole in the
CSA." Id. (citation omitted). The fact that the CSA was likely to impact some purely
intrastate activities was of no concern to the Court. Id.

       Here, Monson and Hauge's proposed cultivation of cannabis falls more squarely
within the scope of Congress's Commerce Clause authority than did the Raich
plaintiffs' proposed cultivation of marijuana. Unlike the Raich plaintiffs, who sought
to grow marijuana plants on a small scale for their personal medical use, Monson and
Hauge seek to grow cannabis on a large scale for the undeniably commercial purpose
of generating products for sale in interstate commerce.5

      Monson and Hauge's attempts to distinguish Raich are unpersuasive. They
contend that because Congress chose to exclude certain components of the Cannabis
sativa L. plant from the CSA's definition of marijuana, Congress "cannot

       5
       According to the Complaint, Hauge acquired a state license to cultivate up to
100 acres of industrial hemp from which he planned to supply other North Dakota
farmers with seeds, and Monson obtained a state license to plant up to ten acres with
300 pounds of industrial hemp seeds in order to produce over 2.4 million industrial
hemp plants. See Compl. at 12, 13.

                                           -15-
constitutionally regulate intrastate state-regulated and licensed activity that results
only in putting" those unregulated components into interstate commerce. Br. of
Appellants at 29. This argument misses the mark. The question is not whether
Congress could have decided to regulate a narrower class of economic activity than
it chose to regulate. Rather, the question is whether Congress had any rational basis
to conclude that the economic activity it chose to regulate—the manufacture of all
marijuana plants, regardless of THC content and intended use—substantially affects
interstate commerce. See Raich, 545 U.S. at 22 ("We need not determine whether
respondents' activities, taken in the aggregate, substantially affect interstate commerce
in fact, but only whether a 'rational basis' exists for so concluding.").

      Congress's decision to regulate the manufacture of all marijuana
plants—whatever their ultimate use—was a rational means of achieving one of
Congress's primary objectives: "to control the supply and demand of controlled
substances in both lawful and unlawful drug markets." Id. at 19; see also United
States v. Moore, 423 U.S. 122, 135 (1975) (noting that in enacting the CSA,
"Congress was particularly concerned with the diversion of drugs from legitimate
channels to illegitimate channels," and "[i]t was aware that registrants, who have the
greatest access to controlled substances and therefore the greatest opportunity for
diversion, were responsible for a large part of the illegal drug traffic"). As we
observed in White Plume, "'problems of detection and enforcement easily justify a ban
[on Cannabis sativa L.] broader than the psychoactive variety of the plant.'" 447 F.3d
at 1073 (quoting N.H. Hemp Council, 203 F.3d at 6) (alterations by this Court). It is
likewise no answer to Congress's concern about enforcement problems to assert that
"North Dakota law requires that no plant and no part of the plant regulated by the CSA
may ever leave the farmer's property." Br. of Appellants at 33–34. The Supreme
Court rejected a similar argument in Raich, observing that state restrictions on
marijuana possession and cultivation "cannot serve to place [the challenged] activities
beyond congressional reach." 545 U.S. at 29; see also id. at 41 ("Congress need not
accept on faith that state law will be effective in maintaining a strict division between

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a lawful market for 'medical' marijuana and the more general marijuana market.")
(Scalia, J., concurring).

       The CSA defines marijuana to include all Cannabis sativa L. plants, regardless
of THC concentration or intended use. See 21 U.S.C. § 802(16). Congress had a
rational basis for concluding that it was necessary to regulate the cultivation of all
Cannabis sativa L. plants in order to maintain the CSA's highly regulated system of
drug distribution and its controls against unlawful diversion of controlled substances.
By regulating all Cannabis sativa L. plants, Congress, through the CSA, vested the
DEA with the authority to determine whether a particular proposal for its growth is
sufficiently controlled so as not to undermine the objectives of the Act. And any
attempt by Monson and Hauge to draw distinctions between Cannabis sativa L.
varieties for purposes of Commerce Clause analysis ignores the indisputable fact that
they seek to engage in a commercial enterprise that will result in the introduction of
goods into interstate commerce. Regardless of Congress's purpose, because
cultivation of Cannabis sativa L. substantially affects the interstate market for
commodities such as the fiber, seed, and oil of the plant, Congress may regulate that
cultivation. The District Court properly rejected Monson and Hauge's Commerce
Clause challenge.

      We affirm the judgment of the District Court in all respects.
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