Federal court upholds Washington state cannabis residency permit

Bucking a national trend, a Washington state judge upheld the state’s residency requirement for owning cannabis businesses and ruled that the US Constitution’s dormant commerce clause does not apply, as marijuana is still illegal at the federal level.

Last Tuesday, US District Judge Benjamin Settle sided with the Washington Liquor and Cannabis Board, dismissing a 2020 lawsuit filed by marijuana investor Todd Brinkmeyer asking the court to rule that Washington’s residency requirement was unconstitutional, reported Law360.

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Settle wrote that states do not have the legal authority to overrule the federal Controlled Substances Act or Congress, both of which have upheld federal illegality of cannabis, and therefore the Fair Interstate Trade Clause guarantee does not apply.

This means, Settle concluded, that Brinkmeyer had no standing to challenge the residency requirement.

“Neither party in this case proposes that citizens have a statutory or constitutional federal right of ownership of cannabis while it remains federally illegal, and indeed they do not,” the judge wrote in his ruling. “It is not clear to this court how the dormant commerce clause can be construed to protect illegal interstate commerce. The priority clause, the right of first refusal, the general principles of federalism and common sense suggest that this is not the case.”

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Attorney Daniel Oates, who represented Brinkmeyer in the case, called the verdict “disappointing”.

“This is unfortunate, especially because the court acknowledged that the ruling stands in stark contrast to most other federal court rulings on the same issue. We are carefully reviewing the judgment with our client and evaluating our next steps,” Oates told Law360.

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The ruling is a break with other federal cases, notably one in Maine that resulted in the state’s residency permit being thrown out, and an injunction issued by a federal judge in New York that prevented the state from granting at least 18 retail licenses grant date.

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There are also similar lawsuits in several California cities that have residency requirements for cannabis social equity programs.

The Washington ruling is also a setback for those who had hoped that such lawsuits would actually result in legal interstate cannabis shipping ahead of federal legalization, which is a speculative legal theory based on the Constitution’s dormant Commerce Clause. If federal jurisdiction disagrees on whether or not residency requirements are legal, that uncertainty could be enough to delay interstate trade movement for years.