Alcohol is legal, too, but you wouldn't let anyone drive your kids after drinking. He's just mad that you said no, and he's trying to get back at you through your dad. Unless your dad takes what your brother said to heart, I would just let it go. Your brother is just doing what any addict would when someone says no to them.
Keep doing right by yourself and your kids. Hopefully, your parents will see that they are not really helping your brother, and could possibly get into trouble if he is caught selling pot without a license.