A fight in Maine over residency requirements for cannabis licensing that potentially has national implications, moved to the Federal First Circuit Court of Appeals earlier this month.
The United Cannabis Patients and Caregivers of Maine are fighting to preserve the state’s residency requirement for medical marijuana establishment licenses following a Federal Court order in favor of The Northeast Patients Group (NPG), which does business at four Maine dispensaries as Wellness Connection.
The appeals case, known as NPG v. Maine Department of Administrative and Financial Services, will likely set a precedent for other residency requirement fights across the country. The Circuit Court decision has already been cited in other cases, such as when a federal judge in Missouri struck down that state’s residency requirement for cannabis licenses on Oct. 7, while a case in Detroit, Michigan awaits a 2022 trial. Missouri officials have indicated they will not appeal the ruling and will abide by the Circuit Court’s ruling.
NPG, sued the state of Maine in March, 2020, alleging that the residency requirement for licensing, reflecting an unfair violation of the dormant Commerce Clause of the U.S. Constitution because it discriminates against non-residents.
“Though Maine’s adult use marijuana industry is expected to create significant economic opportunities, a state statute reserves these opportunities in large part for four-year Maine residents, to the exclusion of non-residents,” said the 12-page complaint. “The purpose of the Residency Statute is to discriminate against nonresidents.”
Before the judge could rule on the complaint, the state reached a settlement where it agreed to not enforce its residency requirement for commercial businesses.
That still left medical marijuana companies bound by residency requirements and thus the basis of the appeal.
The resident fight returned to court in Dec. 2020 when NPG sued to block the residency requirement for medical marijuana companies.
“Plaintiffs seek to void long-established statutes and regulations governing Maine’s medical marijuana industry as unconstitutional,” said the 9-page motion to intervene. “Plaintiffs ask the Court to forcibly open Maine’s medical marijuana market to non-resident owned competitors to ‘make more money,’ by stripping the economic protections state law now provides to Maine resident-owned medical-use businesses, such as United Cannabis’ members.”
Although United Cannabis of Maine was allowed to intervene, U.S. District Court Judge Nancy Torresen ultimately ruled in favor of NPG and struck down the residency rule.
“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,” wrote Torresen. “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.”
The state and United Cannabis of Maine filed separate appeals on Oct. 3 and 4, respectively. Neither has filed a brief with the First Circuit, though both, along with NPG have until Nov. 12 to file their respective briefs.