That was exactly the question addressed in Gonzales v. Raich.
From Scalia's concurring opinion:
Unlike the power to regulate activities that have a substantial effect on interstate commerce, the power to enact laws enabling effective regulation of interstate commerce can only be exercised in conjunction with congressional regulation of an interstate market, and it extends only to those measures necessary to make the interstate regulation effective. As Lopez itself states, and the Court affirms today, Congress may regulate noneconomic intrastate activities only where the failure to do so "could… undercut" its regulation of interstate commerce.... This is not a power that threatens to obliterate the line between "what is truly national and what is truly local."
Does the precedent in Gonzales not generalize to marijuana businesses, as opposed to just home growers? Is there truly a legal distinction between the ability to "undercut regulation" of (a) a home grower whose product may end up traveling across state lines, and (b) a business that sells recreational marijuana to customers who may plan to resell across state lines?
The key term in the decision is "the likelihood that the high demand in the interstate market will draw such marijuana into that market" - this is as true of business-produced marijuana as it is of home-produced marijuana, no?
I assume I'm misreading the scope here, because investors in marijuana businesses have to have taken this into account when doing due diligence, not just relied on the Obama administration's lack of enforcement, right? Or is the entire industry built on shaky legal ground?
No distinction. The entire industry is built on shaky legal ground. The only defense available to growers, distributors, and their investors is estoppel.
Estoppel is a category of legal principles that basically allow a court to refuse to hear a claim or defense if the claimant or respondent (in this case, the government), through affirmative action or gross inaction, did something such that the law would deem it especially unfair (often the test is "unconscionable") to permit the claimant or respondent the benefit of a claim or defense.
The classic example is promissory estoppel.
The biggest problem is that most forms of estoppel are generally not permitted in criminal matters, or much more difficult to convince a court to accept.
In this case, the basis for estoppel would be that various regulators and the DoJ have made statements that they would refrain from prosecuting certain offenses related to marijuana commerce if the acts were permitted legally under state law.
However, as far as I know, these statements
1) never pronounced the behavior legal under federal law, but merely provided an outline for how regulators and prosecutors would use their prosecutorial discretion;
2) were generally limited to medical marijuana;
3) were otherwise heavily hedged.
For these and other reasons I don't think any major financial institutions have invested in the marijuana industry. Usually it's local, individual investors providing financing, if any.
As the law is understood today few lawyers would expect to successfully defend a federal prosecution. At the margins, given all the context maybe many judges would be more likely to favor a defendant, such as imposing unusually light sentences or being unusually deferential to other defenses. But nobody should harbor the illusion that any aspect of the state-sanctioned marijuana industry, medical or recreational, is legal under federal law.
Well, that's the argument that Wickard was wrongly decided. The case in question involved a farmer growing crops for personal use in violation of production quotas. The Supreme Court held that this purely intrastate non-commercial activity was in fact interstate commerce (and thus within the power of the federal government to regulate) because there was an interstate market for this crop and that market was being affected, however slightly, by this farmer not engaging in it.
The inclusion of the word "interstate" was clearly intended to place a limitation on jurisdiction. With interpretations like this one, is there currently a form of commerce for which the interstate commerce clause has not been construed to apply?
