A federal judge threw out a Maine law that required all licensed cannabis company owners to be state residents, opening up both the medical and recreational markets to out-of-state business interests.
According to Law360, U.S. District Judge Nancy Torresen of the 1st Circuit Court of Appeals ruled that the law was a violation of the U.S. Constitution’s dormant commerce clause.
The law, she wrote, “explicitly discriminates against residents of other states and Maine cannot show a legitimate local purpose for the requirement.”
The ruling was the outcome of a 2020 lawsuit filed by Wellness Connection of Maine and High Street Capital Partners, which is connected to New York-based multistate operator Acreage Holdings.
The Maine residents that own Wellness Connection wanted to sell the company to High Street but were prevented from doing so by the residency requirement.
So they filed suit against the state.
The lawsuit followed a similar victory by Wellness Connection in 2020, in which it got a residency requirement for recreational marijuana companies thrown out by regulators.
The Maine residency requirement – a policy that was once common among U.S. cannabis markets – is the latest to fall as marijuana becomes a more nationwide industry with multistate operators and brands that cross state lines.