Federal Gun Ban for Marijuana Users. The Government Is Still Overpriced at 21%
· By Tyler James Webber
The Supreme Court hears United States v. Hemani. Five justices showed cross-ideological skepticism at oral arguments. Fair value for YES is 14% — the market at 21% is overpriced by 7 points.
Case: United States v. Hemani, No. 24-1234 (5th Cir.) | Volume: $49,840 | Open interest: 17,555 contracts
Position: BUY NO at 84 cents.
Fair Value: YES ~14% base case (range 12-17%). NO ~86%. Edge: ~7 percentage points on NO.
The market prices the government winning at 21%, down from a pre-argument high near 57%. This analysis finds 21% is still overpriced. Arguments on March 2, 2026, produced a rare cross-ideological signal. Barrett and Gorsuch on the conservative side and Jackson, Sotomayor, and Kagan on the liberal side all challenged the government's core dangerousness analogy directly, and the government's counsel had no satisfying answer to the question that is the load-bearing element of the case under United States v. Rahimi, 144 S. Ct. 1889 (2024). Fair value is approximately 14%. The primary risk is mootness from the pending Schedule III marijuana reclassification, not a reversal of the oral argument signal.
Source: Kalshi — "Will SCOTUS uphold the federal gun ban for marijuana users?" $49,841 volume. The contract dropped 36 points following oral arguments on March 2, 2026.
United States v. Hemani asks whether 18 U.S.C. Section 922(g)(3), the 1968 statute making it a felony for any unlawful drug user to possess a firearm, survives Second Amendment scrutiny under Bruen's historical tradition test as applied to Ali Danial Hemani, a Texas resident who used marijuana roughly every other day and was found in possession of a Glock 19. The Fifth Circuit found Section 922(g)(3) to be unconstitutional as applied to Hemani. The government appealed. A decision is expected by late June 2026. The outcome directly affects hundreds of pending lower court challenges to Section 922(g)(3) and, because the statute covers all unlawful drug users, could reshape prosecutions involving harder substances as well.
The market opened above 55% in late 2025 and collapsed by 36 points during and after oral arguments in early March. Pre-argument coverage framed the case as a significant structural hurdle for the government under the Bruen precedent. Post-argument reporting from NPR, the Associated Press, PBS NewsHour, Reason, and the Trace, all publishing on or within days of oral arguments, characterized multiple justices as skeptical. The market appears to be pricing a broad loss for the government, but may be underweighting the mootness pathway and the possibility of a narrow ruling that resolves YES under the contract's outcome criteria.
Position: BUY NO at 84 cents. Fair Value: YES ~14% base case, 12-17% range. Edge: ~7 percentage points on NO.
Whether Section 922(g)(3) survives the Second Amendment's historical tradition test as applied to a person who uses marijuana several times per week and possesses a firearm at home.
New York State Rifle and Pistol Association v. Bruen, 597 U.S. 1 (2022), requires the government to identify a well-established historical analogue for any firearm regulation. United States v. Rahimi, 144 S. Ct. 1889 (2024), clarified that the analogue must reflect a comparable justification, not just a comparable practice. The government must show both that historically similar persons were disarmed and that the reason for disarming them is comparably grounded.
The government's primary analogue is the founding-era statutes restricting habitual drunkards. Principal Deputy Solicitor General Sarah Harris argued at oral argument that marijuana users present a comparable danger. Hemani's counsel contested the analogy on both scope and principle. The ACLU filed a separate amicus brief supporting Hemani but did not serve as counsel of record.
The government's case rests on the habitual drunkard analogy, but that analogy fails on principle and on historical fit. The drunkard statutes targeted persons whose substance abuse had reached incapacity or dangerous loss of self-control, not persons who intermittently consumed a disfavored substance. Barrett asked directly what evidence the government had that occasional marijuana use makes someone dangerous, and the government's counsel had no answer. The statute compounds this problem by applying without any individual dangerousness determination of the kind that the historical analogs built in. Gorsuch noted the incoherence of a regime where marijuana's Schedule I status is the constitutional basis for disarmament while the same administration is simultaneously pursuing Schedule III reclassification, such that users the government deems too dangerous to own firearms on Monday become eligible on Tuesday without any change in their behavior. A further difficulty is the vagueness of the statute. Section 922(g)(3) specifies no temporal or frequency threshold for what qualifies as unlawful use, and ATF data cited in NORML's amicus brief, filed in February 2026, reports that in 2025, nearly half of denials under the statute were based on a single past incident of use.
Jackson stated at arguments that the government's case falls apart under Bruen. Sotomayor and Kagan challenged whether the drunkard statutes satisfied the Rahimi principle requirement. Roberts was the most sympathetic to the government but also expressed concern about abandoning Bruen's rigor. Kavanaugh's engagement was the least conclusive of the nine.
Post-argument legal commentary surfaced a point that bears on the probability decomposition. University of Michigan law professor Leah Litman, from a commentary recorded shortly after the argument, noted that the conservative bloc's apparent openness to striking the statute as applied to occasional marijuana users may reflect confidence that Section 922(g)(3)'s addiction prong would survive a narrow ruling. The statute covers two distinct categories, unlawful users and persons addicted to a controlled substance, and a narrow as-applied ruling for Hemani could leave the addiction prong intact, preserving the government's ability to prosecute persons with documented dependency. If that reading is correct, the Court may view a narrow strike as carrying lower public safety costs than the government argued, which would shift probability away from Pathway 3 and toward Pathways 1 and 2.
Justice Jackson also pressed the government on a specific inconsistency between its positions in the two Second Amendment cases argued earlier in the term. In Wolford v. Lopez, argued in January, the government contended that historical laws prohibiting poaching and hunting on private property were too dissimilar to Hawaii's challenged concealed-carry restriction to qualify as historical analogs under Bruen. In Hemani, the same government contended that founding-era vagrancy statutes, which have no apparent connection to firearm possession, do qualify as historical analogs to Section 922(g)(3). The government demanded a historical twin in one case and settled for a loose functional analog in the other.
The amicus filing record reinforces the doctrinal picture. On Hemani's side were the NRA, Cato Institute, NORML, ACLU, Firearms Policy Coalition, Gun Owners of America, New York State Rifle and Pistol Association, Second Amendment Foundation, Drug Policy Alliance, National Association of Criminal Defense Lawyers, and several others, per the docket filed March 2026. On the government's side were Everytown, Brady Center, 19 states, and Smart Approaches to Marijuana. The pro-Hemani coalition is substantially larger in number and crosses ideological lines in a way that rarely occurs when the government's position is doctrinally strong.
JUSTICE-BY-JUSTICE ASSESSMENT
| Justice | Lean | Key Signal | |---------|------|-----------| | Thomas | LEAN YES | Deferential to legislative public safety classifications. | | Alito | LEAN YES | Engaged favorably with the government's dangerousness framing. | | Kavanaugh | TOSS-UP | The least conclusive engagement of the nine. Critical swing vote. | | Roberts | LEAN NO / TOSS-UP | Sympathetic, but concerned about abandoning Bruen's rigor. Likely author of any narrowing opinion. | | Barrett | LEAN NO | Challenged the dangerousness predicate directly. The government had no satisfying answer. | | Gorsuch | LEAN NO | Pressed the rescheduling incoherence. Co-authored Bruen. | | Jackson | LEAN NO | Stated directly that the government's argument falls apart under Bruen. | | Sotomayor | LEAN NO | Challenged the adequacy of historical analogy on Rahimi principle grounds. | | Kagan | LEAN NO | Questioned whether drunkard statutes satisfy Rahimi's comparable-justification requirement. |
The path to YES requires Thomas, Alito, Kavanaugh, Roberts, and one of Barrett or Gorsuch — a five-vote coalition that includes two justices who showed direct skepticism during oral arguments.
The path to NO requires only Barrett, Gorsuch, Jackson, Sotomayor, and Kagan — five votes that do not depend on either swing justice. Even if both Roberts and Kavanaugh sided with the government, the government still loses 5-4.
C. PROBABILITY DECOMPOSITION
Pre-argument baseline: 28%, anchored in the Fifth Circuit ruling on appeal, the Tenth Circuit's August 2025 affirmance of United States v. Harrison, 654 F. Supp. 3d 1191 (W.D. Okla. 2023), federal trial court rulings in Rhode Island and Florida finding the statute unconstitutional, and the ATF's own proposed rule pulling back from the broadest interpretation of the statute.
Pathway 1: Narrow strike as applied to occasional users — 51% — resolves NO. Pathway 2: Broader strike on vagueness grounds — 23% — resolves NO. Pathway 3: Narrow government win, law upheld only for persons with documented habitual dependency (the Roberts narrowing scenario) — 8% — resolves YES. Pathway 4: Categorical uphold — 4% — resolves YES. Pathway 5: Mootness or remand from Schedule III rescheduling — 14%.
A mootness scenario would not leave the contract cleanly unresolved. Based on Kalshi's published practice and the mechanism available under Rule 6.3(c) of the Rulebook, an unresolvable or ambiguous outcome is settled at the last traded price rather than declared YES or NO. In the Cardi B Super Bowl halftime market, Kalshi invoked that rule and distributed the last traded YES price to YES holders and the remainder to NO holders.
The pathways sum to 51 + 23 + 8 + 4 + 14 = 100%.
Excluding Pathway 5 from the binary YES/NO calculation: YES = 12 ÷ 86 = 14.0%. NO = 74 ÷ 86 = 86.0%. The market at YES 21% is approximately 7 percentage points above fair value.
Epstein, Landes, and Posner, in "Inferring the Winning Party in the Supreme Court from the Pattern of Questioning at Oral Argument," Journal of Legal Studies 39:433-467 (2010), find that the party receiving more questions from the bench loses approximately 67 to 70% of the time. The government's counsel at the oral arguments bore the brunt of the questioning, with Barrett, Gorsuch, Jackson, Sotomayor, and Kagan all pressing the dangerousness criterion. Applied to this argument, that places the government's win probability at 30 to 33%, consistent with the 28% pre-argument baseline but above the 14.0% fair-value estimate. The gap reflects factors that aggregate oral argument research cannot capture, including the lower-court consensus, the ATF's regulatory retreat, and the specific structural weakness of the habitual drunkard analogy as applied to non-intoxicated recreational users. The two figures are consistent in direction and order of magnitude.
NO-MODEL TEST (NMT) SENSITIVITY ANALYSIS
Key variable: Pathway 3 probability (Roberts narrowing scenario). Pathway 4 held at 4%, Pathway 5 at 14%. Market price 21%.
| P3 (Narrow Uphold) | YES FV | Market | Edge (NO) | Position | |---------------------|--------|--------|-----------|----------| | 4% | 9.3% | 21% | +11.7pp | BUY NO | | 6% | 11.6% | 21% | +9.4pp | BUY NO | | 8% (base) | 14.0% | 21% | +7.0pp | BUY NO | | 12% | 18.6% | 21% | +2.4pp | BUY NO | | 16% | 23.3% | 21% | -2.3pp | BUY YES |
The position holds as a clear mispricing unless Pathway 3 reaches approximately 14%, at which point the market price and the fair value estimate converge, and the edge disappears. Even at that level, NO remains the most likely outcome at approximately 79%, but the contract would no longer offer excess return relative to the risk taken.
RISK FACTORS AND CATALYSTS
Mootness from rescheduling is the primary risk. Any published final rule completing Schedule III reclassification before the opinion issues is the signal to exit. The DoJ website's current active placeholder is the monitoring trigger. Under Rule 6.3(c) of the Kalshi Rulebook, an outcome Kalshi determines to be unresolvable is settled at the last traded price rather than at the full $1 payout of a clean resolution.
A Roberts-authored opinion is the secondary risk. A narrowing opinion could create ambiguity in the YES resolution depending on the Kalshi contract's outcome criteria, and a ruling that preserves the addiction prong while striking the unlawful user prong as applied to recreational consumers could fall close to the line in contract resolution.
The greatest vote-count uncertainty is Kavanaugh. Any post-argument reporting from SCOTUSblog or the National Constitution Center that characterizes him as sympathetic to a limiting construction should be given heavy weight and may warrant exiting.
BUY NO at 84 cents. Fair value for YES at approximately 14%. Edge approximately 7 percentage points on NO.
Oral arguments produced cross-ideological skepticism from five justices, all focused on the dangerousness criterion that is the Rahimi principle requirement. The government's counsel had no adequate response. The pre-argument doctrinal baseline was already unfavorable, anchored by two circuit-court strikes and the government's own regulatory retreat. The coalition against the government is the largest and most ideologically diverse in any recent Second Amendment case.
The path to YES runs through Roberts attracting Thomas, Alito, Kavanaugh, and one member of the skeptical bloc — a five-vote coalition that requires at least one justice to vote against a position expressed at argument. The NMT confirms the base-case edge survives unless that scenario reaches approximately 14% probability. Position sizing should be modest. The mootness pathway is the exit trigger.
Key date: Late June 2026.