Federal Judge Strikes Down Maine’s Residency Requirement for Medical Cannabis Companies

A federal judge on Wednesday said Maine cannot prohibit out-of-state companies from operating medical cannabis dispensaries in the state.

Full story after the jump.

A federal judge on Wednesday said that Maine cannot prohibit out-of-state companies from operating medical cannabis dispensaries in the state, the Portland Press Herald reports. The ruling by U.S. District Court Judge Nancy Torresen favored the state’s largest cannabis company, Wellness Connection of Maine, and its Delaware-based parent company High Street Capital Partners, who had filed the suit challenging rules that required medical cannabis companies to be owned by Mainers.

Last May, the state reached a legal agreement with Wellness Connection which prevented the Office of Marijuana Policy (OMP) from enforcing the four-year residency requirement for companies to own adult-use cannabusinesses in the state. Taken together with Torresen’s ruling, out-of-state firms can now open either medical or adult-use dispensaries in Maine.

The in-state licensing preference was included in both the state’s medical cannabis and adult-use laws. The company had argued that the rules violated the U.S. Constitution’s Dormant Commerce Clause which prohibits states from passing laws that discriminate against or burdens interstate commerce by favoring its residents over out-of-staters.

Officials had argued that because cannabis is federally illegal, the laws do not “burden interstate commerce more severely than Congress, since Congress has eliminated that market entirely.” Torrensen said that the argument was “not without logic” but since Maine does not bar qualified non-residents from purchasing medical cannabis, or non-residents who purchase cannabis in Maine to take out of state, “the notion that the medical industry in Maine is wholly intrastate does not square with reality.”

Susan Meehan, president of the United Cannabis Coalition which supports the residency clause, said the group is considering appealing the ruling which she told the Press Herald has “a strong likelihood of success.”

The OMP on Thursday announced it was opening applications for new medical cannabis licenses, the first time in 11 years that registration has been publicly available.

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