Maine Removes Cannabis Industry Residency Requirement

The state of Maine and the Wellness Connection of Maine have reached a legal agreement that will prevent the Office of Marijuana Policy from enforcing the four-year residency requirement for cannabis industry license holders, the Portland Press Herald reports.

The Wellness Connection and Wellness and Pain Management Connection of Delaware, subsidiaries of High Street Capital Partners of Delaware, filed the lawsuit against the state last month arguing that the residency requirement violates the commerce clause of the U.S. Constitution which forbids restrictive and discriminatory commercial regulations between the states.

The decision will allow out-of-state investors into the state’s budding – but much delayed – recreational cannabis industry. Maine’s current law requires every officer, director, and manager of an adult-use cannabis business, and a majority of its ownership, to live and file taxes in Maine for at least four years. That mandate would have sunset in June 2021, but it would have given locals an advantage at the outset of the new market.

Wellness attorney Matt Warner told the Press Herald that access to capital is not just crucial for Wellness “but for the broader industry, too.” Wellness is 51 percent-owned by Maine residents. The company is also likely to ask the Portland City Council to strike its residency requirements, the report says.

“The residency requirement was the single biggest impediment to getting the industry off the ground quickly and efficiently.” – Warner to the Press Herald

OMP Director Erik Gundersen said the agency took the action on the advice of the Attorney General’s Office, which determined that the state was unlikely to beat the Wellness suit in court as it has struck down residency requirements in the past. Gunderson told the Press Herald that the office will introduce legislation to remove the preference and change its underlying rules.

Mark Barnett, founder of the Maine Craft Cannabis Association, said the decision leaves voters “with almost nothing” they voted for in 2016. He called Wellness an “out-of-state bully that sued the state when it didn’t get what it wanted.”

“Mainers did not want corporate marijuana, but that is exactly what we’ll be getting now,” Barnett said in the interview with the Press Herald. “It’s going to be a race to the bottom.”