WASHINGTON—The Supreme Court Monday ruled felons may sell or give away guns they own to others, reversing a lower court that said the government can confiscate weapons under a law barring many convicts from possessing firearms.

A federal court had blocked Tony Henderson, a former Border Patrol agent who pleaded guilty to distributing marijuana, from selling his weapon collection, which included more than a dozen firearms. The 11th U.S. Circuit Court of Appeals, in Atlanta, had said Mr. Henderson had “unclean hands” and couldn’t...