What does it mean for the cannabis industry now that Maine has eliminated residency requirements for medical cannabis businesses?

Maine court removes residency requirement for medical cannabis businesses

According to Maine Public Radio, the Maine First Circuit Court of Appeals overturned the constitutional requirement that medical cannabis dispensaries in the state be owned by state residents. The court’s decision upholds the decision of a lower court that found the residency requirement violates the United States Constitution by impeding interstate commerce.

Under the law governing Maine’s medical cannabis program, any officer or director of a licensed medical marijuana dispensary must be a resident of the state. Wellness Connection, Maine’s largest medical cannabis company, filed a lawsuit in 2020 to challenge the residency requirement for violating the “constitution’s sleep trade clause,” which prohibits states from passing laws restricting interstate commerce hinder .

Other states that have legalized cannabis have also eliminated the residency requirement, and in 2020 Maine officials announced the law requiring you to be a resident of the state before owning a recreational marijuana business only for this law to be implemented medicinal cannabis program restrictions will remain in place.

The US District Court for the District of Maine ruled in the Wellness Connection case that the residency requirement violated the Dormant Commerce Clause and was therefore unenforceable. The state and a coalition of medical cannabis companies appealed the ruling, arguing that the Dormant Commerce Clause does not apply because cannabis is illegal under federal law. The first circle upheld the lower court’s ruling in a 2-1 decision made last week.

The court found that despite the federal ban on cannabis, Congress recognized the existence of a medical marijuana market through the Rohrabacher-Farr Amendment, a clause in the grants legislation that prevents federal law enforcement agencies from allocating resources to the prosecution of state-licensed medicinal cannabis to be used by firms in criminal cases. By approving the legislation in 2014 and every other year thereafter, Congress also recognized that this market could remain free of federal prosecution under certain conditions.

This is not a case in which Congress illegalized a national market without expecting that an interstate market would continue to function, the majority opinion of the judges wrote, regardless of the conditions relating to other goods that Congress judges to be contraband Has. “But on the contrary,”

JUDGMENT COULD AFFECT CANNABIS TRADE BETWEEN STATES

Legal experts believe the ruling’s reasoning could be applied to state laws prohibiting interstate trade in marijuana between states where cannabis is legal. Such bans could also violate the Dormant Commerce Clause and be considered unconstitutional.

Robert Mikos, a Vanderbilt University law school professor who specializes in federalism and drug policy, told Marijuana Moment that he thinks this will be the next shoe to drop. He added that he didn’t see how licensing preferences could be distinguished from these import and export restrictions. They are equally vulnerable, in his opinion.

An attorney for cannabis law firm Vicente Sederberg, Shane Pennington, agrees that the ruling has ramifications for the state ban on interstate marijuana trade and could severely disrupt the state’s medical marijuana markets.

According to Pennington, the ruling puts many state laws restricting interstate marijuana trade in the spotlight for potential future litigation, Pennington said in an email. A majority of state jurisdictions are based on laws that prohibit, for example, out-of-state trade or non-state residents from owning local marijuana businesses, or retain state permits under social justice programs for state residents. The First Circuit’s decision calls into question the constitutionality of all of these states.

WHAT DOES THIS MEAN FOR FOREIGN MARIJUANA IMPORTS AND EXPORTS

Aside from how the ruling affects interstate marijuana trade, Pennington explains that the ruling could also affect federal bans on the import and export of marijuana to and from foreign countries.

Pennington explains that the First Circuit’s decision will make it more difficult for the United States to defend itself against complaints from the International Narcotics Control Board (the independent enforcement agency of international drug regulatory treaties to which the United States is party to the Single Convention on Narcotic Drugs of 1961), that the United States is violating its international treaty obligations by allowing states to legalize adult and medical marijuana. In response to these complaints, the United States federal government has maintained that the use of cannabis is still illegal under federal law and it has not breached any contractual obligations. The Supreme Court ruling will make it difficult even for the State Department to continue presenting this argument with a serious face, even though US critics have never accepted it.

Pennington points out that the Rohrabacher-Farr amendment, which shields regulated medical marijuana companies from federal law enforcement interference, is just legislation that shows how Congress approved the state’s legalization of medical cannabis. Additionally, he notes that Congress tends to overlook the global implications of American cannabis policy, “but that’s a huge mistake.”

Pennington insists that if the United States wants to continue to be taken seriously in international drug control politics, it must maintain its credibility with its contractual partners. “And the organizations and contractors that are so closely monitoring U.S. marijuana policy are the same ones that the U.S. needs to influence in other drug control contexts,” the author writes. “For example, the US must persuade the international community to take a tough stance on China and Mexico for bombarding the US with the highly deadly fentanyl-related substances that are killing countless Americans every day.”

FINAL EFFECT

The elimination of the residency requirement for owning a cannabis dispensary in Maine means that outsiders/foreigners could come and share in the revenue of Maine’s cannabis industry. However, the decision is still being challenged by the state and a group of local cannabis entrepreneurs.

MORE ABOUT THE DORMANT COMMERCIAL CLAUSE, READ MORE…

PROFESSOR MIKOS TALKS ABOUT THE SCHOOLING TRADE CLAUSE!