The United Cannabis Patients and Caregivers of Maine and the state’s Office of Marijuana Policy both argued that a federal ruling striking down the state’s residency requirement for medical cannabis operators incorrectly cited the dormant commerce clause of the Constitution. The arguments come in a pair of briefs filed before the First Circuit Court of Appeals on Dec. 20 and 21.
“This case doesn’t involve lawful goods or common interstate markets,” said United Cannabis of Maine’s 31-page brief in Northeast Patients Group v. United Cannabis Patients And Caregivers of Maine. “This case centers on a purported right to buy, sell, invest and generally profit from marijuana, a substance that Congress has expressly prohibited from the national market of interstate commerce through its adoption of the Controlled Substances Act.”
[Read the Defendants Brief from State of Maine – United Patients]
Northeast Patients Group (NPG), which operates one medical and three recreational cannabis dispensaries in Maine as Wellness Connection, successfully sued the state to eliminate the in-state residency requirement for owners of medical cannabis businesses.
U.S. District Judge Nancy Torresen ruled in favor of NPG on August 11, 2021, saying that Maine’s residency rule violated the dormant commerce clause due to its discrimination against “nonresident economic actors.”
The dormant commerce clause prohibits any state law that would excessively burden interstate commerce. United Cannabis of Maine and the state both argued that the residency requirement does not hinder interstate commerce as long as the federal government’s ban on cannabis prevents the existence of an interstate cannabis industry.
“When Congress eliminates a market from interstate commerce in its entirety, there is no state regulation of that market—be it a residency requirement or otherwise—that could possibly hinder interstate commerce,” said the state’s 24-page brief.
The case marks the second time that NPG took the State of Maine to court to oppose its residency requirement.
Many of the arguments regarding the dominant commerce clause made by United Cannabis Patients and the State of Maine mirror arguments made by the City of Detroit in another pending federal case, Crystal Lowe v. The City of Detroit. That case goes to court to determine the legality of Detroit cannabis license residency requirements in September 2022.
Similar to the current litigation, NPG sued in March, 2020, alleging that the state’s residency requirement for licensing reflected an unfair violation of the dormant commerce clause of the U.S. Constitution because it discriminates against non-residents. 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 residency fight returned to court in Dec. 2020 when NPG sued to block the residency requirement for medical marijuana companies.
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.
Both briefs from United Cannabis of Maine and the state were flagged by the appellate court for improper formatting, which is not uncommon on the federal appellate level. The two parties have until Dec. 30 to submit corrected briefs. Once both of those have been filed, NPG will have 30 more days before it must submit its opposing brief.
