The U.S. Department of Homeland Security and U.S. Customs and Border Protection are urging a New Mexico federal court to toss claims by eight cannabis companies alleging that federal agents wrongfully seized cannabis, money, and property at checkpoints.

DHS said in a motion filed Tuesday that the complaint must be dismissed because there is no federally recognized property right for cannabis, which remains federally illegal under the Controlled Substances Act (CSA) and does not fall under constitutional protections.

While cannabis might be legal in New Mexico, that does not create a property interest entitled to due process protection, the agency argued, and therefore the companies were not entitled to additional process when their cannabis and cash were seized.

The agency added that the companies were on clear notice that the products were still illegal under the CSA and that CBP would continue to enforce federal CSA violations, which also weakens the companies’ procedural due process claims.

Due to the federally illegal nature of cannabis, the DHS argued, the companies are not entitled to the return of their cannabis. Nor must the government return the money associated with the business through the lawsuit. Instead, the companies would need to file a motion to set aside forfeiture through the Civil Asset Forfeiture Reform Act (CAFRA).

DHS noted that such a motion could only be granted based on a lack of notice, and the agency emphasized that the companies had proper notice that the money would be seized.

The eight businesses filed a complaint in October, claiming that DHS and CBP violated due process by unlawfully seizing inventory and cash at checkpoints in New Mexico, contravening a long-standing U.S. policy of not interfering with state-regulated marijuana entities.

The plaintiffs include Royal Cannabis LLC (doing business as Baked Chicken Farm), Mesilla Valley Extracts LLC, Super Farm LLC (doing business as Smokey Road Farms), Impact Farms LLC, Chadcor Holdings NM LLC (doing business as Top Crop Cannabis LLC), Mylars LLC, Rollin Love LLC, and Desert Peaks Farms Inc.

The complaint cites the Rohrabacher-Farr Amendment, an annual rider in federal appropriations bills since 2015, which prohibits the U.S. Department of Justice from using its resources to target compliant, state-sanctioned medical marijuana businesses.

The companies also reference the Cole Memorandum, which advised federal prosecutors not to pursue cases against state-compliant recreational marijuana businesses, arguing that although the memorandum was officially withdrawn in 2018, the Biden administration has "tacitly reverted to its guidance."

In Tuesday's motion, DHS stated that neither policy creates a substantial or procedural right and, furthermore, that the Rohrabacher-Farr Amendment applies to the Department of Justice, while the Cole Memorandum pertains to the U.S. Department of the Treasury—neither applies to DHS.

The DHS also argued that the companies lack standing to challenge the seizure of vehicles because the vehicles were returned before the complaint was filed.

Finally, the agency urged the court to deny the companies’ request for a jury trial, asserting that CAFRA does not allow for jury trials and that the right to a jury trial only applies to legal claims, not the equitable claims made here.

A spokesperson for DHS declined to comment Wednesday.

Representatives for the other parties could not immediately be reached for comment.

The cannabis companies are represented by Irina Dashevsky, Ryan Holz, and Marnie A. Holz of Greenspoon Marder LLP and Melanie Stambaugh and Jeffrey R. Taylor of Rodey Dickason Sloan Akin & Robb PA.

The federal defendants are represented by Brian M. Boynton, Joshua Gardner, and Elisabeth J. Neylan of the U.S. Department of Justice.

The case is Mesilla Valley Extracts LLC et al. v. U.S. Department of Homeland Security et al., case no. 1:24-cv-01072, in the U.S. District Court for the District of New Mexico.