Portland, Maine Officials Uphold Cannabis License Residency Rules

Officials in Portland, Maine have decided to keep the city’s cannabis residency regulations in place for licensees despite the state having dropped similar rules under legal pressure.

Full story after the jump.

The Portland City Council has voted to keep the resident requirements for cannabis industry licenses intact for the city’s businesses, the Portland Press Herald reports. The decision comes a little more than a week after the state reached an agreement with Wellness Connection of Maine in their lawsuit challenging the residency rules that prevents regulators from enforcing the rules.

The council’s decision goes against the legal advice of municipal attorneys but supporters argue the city regulations will be easier to defend in court. Unlike the state’s all-or-nothing approach – a four-year Maine residency requirement – locals will get preferential treatment by the city only if it gets more than 20 applications and must break a tie among those with similar business experience, bank deposits, and employee wages, the report says.

Councilor Tae Chong warned that the decision could lead to a legal challenge against the city – which is struggling financially from the coronavirus impact – which could result in an injunction that prevents any cannabis industry licenses from being awarded.

After reaching an agreement with the state and dropping its lawsuit, Wellness Connection said it expected Portland to drop its residency requirements, too. Wellness Connection is 51 percent-owned by Mainers. Wellness Connection attorneys told the Press Herald that they could make the same argument against the city they did the state. The state Supreme Court has previously ruled against residency requirements for business licensing.

Anne Torregrossa, an attorney for the city, warned the city council that the decision to uphold the residency requirements is “a risk” but didn’t guarantee they would lose in court.

“Any time you are picking and choosing winners based on in-state versus out-of-state, or even in-city versus out-of-city, you run the risk of running up against the Constitution. This is a legal risk. The state scheme is slightly different but it chose not to take that risk.” – Torregrossa during her remarks at the city council meeting, via the Press Herald

Wellness Connection attorney Matt Warner told the council that there are “good policy reasons” not to have residency requirements but the “big reason” is that they are “unconstitutional.”

“The courts have repeatedly found dozens if not more times that laws like this which gives a preference to the citizens of one state over the citizens of another violates the Constitution,” he said during comments prior to the vote, according to the Press Herald.

With the ordinance adopted, Portland became the 40th Main municipality to approve adult-use cannabis operations. The reforms were approved by voters in 2016 but have been repeatedly delayed. First by former Gov. Paul LePage who vetoed regulation implementation bills, then by delays in the licensing process, then the coronavirus pandemic.

Regulators have not indicated when recreational cannabis sales in the state would commence.

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