Maine Court Strikes Down Residency Requirement for Medical Cannabis Businesses

A Maine court has struck down a state law that required the state’s medical cannabis dispensaries to be owned by Maine residents, Maine Public Radio reports. The First Circuit Court of Appeals decision upholds a lower court ruling that found the residency requirement violates the U.S. Constitution by restricting interstate commerce. 

Under Maine’s Medical Marijuana Act, a dispensary cannot be licensed to sell medical cannabis unless all the officers or directors are residents of Maine. That provision was challenged two years ago by Wellness Connection, the state’s largest cannabis company, and its parent company which argued it violated the constitution’s “dormant commerce clause,” which prohibits states from passing laws that discriminate against or excessively burden interstate commerce.

When the lawsuit was first filed, Wellness Connection board member Ron MacDonald told the Bangor Daily News that the residency requirement hampered the company’s ability to raise money.

Writing for the majority, Chief Judge David Barron said that the “market is so robust that absent the Medical Marijuana Act’s residency requirement, it would be likely to attract entrants far and wide,” the report says.

The court did note, however, that although the medical cannabis market is an interstate market – by allowing nonresidents to make medical cannabis purchases – it is a market that contradicts the federal Controlled Substances Act, according to a Law Street Media report. The First Circuit was not convinced that it is impossible to be an interstate market for a good that is contraband under federal law and affirmed the permanent injunction against the Maine Medical Marijuana Act’s residency requirement.