Federal Power Utility Threatens To Shut Off The Lights On Marijuana Businesses After Mississippi Legalizes Medical Cannabis

By Kyle Jaeger February 8, 2022

A major federally owned electrical utility is threatening that it may cut off its services to areas where companies are cultivating or selling marijuana, regardless of state law.

The Tennessee Valley Authority (TVA) released a statement about its federal obligations while cannabis remains illegal under the Controlled Substances Act, days after the governor of Mississippi signed a bill to legalize medical marijuana in the state. TVA is a main supplier of electricity to the state’s northern region.

“This is a complex and evolving issue—and one we’ve been following closely,” TVA said in the statement, which was first reported by The Daily Journal. “We respect the role of state government in making these decisions, but as a federal agency, TVA is required to comply with federal statutes.”

The federal utility company argued that while it is under contract to provide wholesale services to local power companies, which are regulated at the state level, federal law means that its “resources and funds may not be purposely used to facilitate activity that potentially violates federal law.”

“Given this important point, TVA will not direct any federal resources or funds to the cultivation and/or distribution of marijuana,” it said.

The utility said its employees will report to management if they find that a local power company is using TVA services to provide electricity to state-legal cannabis businesses, and management “will make a determination regarding our reporting obligations to agencies that may have proper jurisdiction to enforce the federal Controlled Substances Act.”

The Tennessee Valley Authority is uncertain if it’s able to supply power and other resources to medical cannabis facilities. The federally owned utility company is asking the federal government to weigh in and provide clarity. https://t.co/WWoIMRw7HL

— Taylor Vance (@TaylorVanceDJ) February 7, 2022

In other words, TVA said it intends to essentially serve as a federal narc as state markets come online within its contractual jurisdiction.

U.S. Rep. Steve Cohen (D-TN), an ally to the cannabis reform movement in Congress, pushed back against the federal energy company’s stance, telling Marijuana Moment on Tuesday that medical marijuana “has been legalized in the majority of our states generally by the people’s votes.”

“TVA should not discriminate against legal businesses that need utilities,” the congressman said. “TVA needs all the business they could get as their rates are way too high already and many want to leave TVA.”

In the TVA statement, the utility further said that its decision “is based on our assessment of our obligations on this complex issue,” and it has “reached out to and are working with other federal agencies, including the Department of Justice, to ensure that our actions are consistent with applicable federal requirements.”

“Based on that outreach, if TVA must take additional action, we will communicate any changes to our policy to our customers as soon as possible,” it said. “In the meantime, we will also closely monitor actions and further guidance from Congress that could further inform TVA’s position.”

A federal rider continually approved by Congress since 2014 prevents the Department of Justice from spending money to interfere with the implementation of state medical cannabis laws, but it doesn’t affect TVA or any federal agencies outside of the department.

In addition to TVA, there are four other electric utilities. It’s unclear if any of those other federal utilities have made similar statements or taken reporting actions against cannabis businesses that operate in accordance with state laws.