Maine Appeals Ruling to Allow Out-of-State Cannabis Business Ownership

The state of Maine and the Maine Cannabis Coalition (MCC), a top cannabis trade group, are appealing a judge’s ruling that opens the door for out-of-state ownership in Maine’s medical cannabis market, the Portland Press Herald reports. Seen as having nationwide significance — there are a number of U.S. cannabis markets that only allow in-city or in-state ownership — the case began with a lawsuit challenging Maine’s residency requirement for cannabis licenses.

The state agreed to drop the residency law for their adult-use system last year but have continued to fight the change within their medical cannabis market, the report says.

The plaintiffs, the Wellness Connection which is owned by three Mainers, and their parent company, High Street Capital Partners of Delaware, filed the lawsuit last year against Commissioner of the Maine Department of Administrative and Financial Services Kirsten Figueroa on the grounds the in-state ownership requirement violates the interstate commerce clause of the U.S. Constitution by restricting the flow of investment and interfering with their ability to function. Maine argued that due to federal prohibition, there is no medical cannabis interstate commerce market, therefore, the so-called “dormant commerce clause” does not apply in this case.

The appeal will be heard by the First U.S. Circuit Court of Appeals, although oral arguments have not yet been scheduled, the report says.

U.S. District Judge Nancy Torresen sided with the plaintiffs in August but said Maine’s argument was “not without logic.” However, the judge noted that the state does not prohibit non-Mainers from purchasing medical cannabis or taking it home with them.

“The notion that the medical marijuana industry in Maine is wholly intrastate does not square with reality,” Torresen wrote.

“I recognize that none of the courts that have confronted this specific constitutional issue have rendered final judgments, and it also seems that no circuit court has addressed it,” the judge wrote in August. “But given the Supreme Court’s and First Circuit’s unmistakable antagonism towards state laws that explicitly discriminate against nonresident economic actors, I conclude that the Dispensary Residency Requirement violates the dormant Commerce Clause.”