Second lawsuit targets OK residency requirement for cannabis businesses

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A marijuana company based in Washington state filed a federal lawsuit against Oklahoma in an attempt to overturn the state’s two-year residency requirement under which nonresidents can own only up to 25% of a medical cannabis business.

According to Law360, Original Investments, which does business as Dank’s Wonder Emporium, argued in its suit that the requirement “reserves the enormous economic opportunities available in Oklahoma’s medical marijuana market … for residents, to the exclusion and detriment of nonresidents.”

The residency requirement is also being targeted by a similar legal challenge by other Oklahoma dispensaries.

The mandate requires that owners holding more than a quarter of a stake in a business must have lived in Oklahoma for at least two years.

Original Investments, however, argued the requirement violates the U.S. Constitution’s commerce clause.

The company cited an opinion from the Oklahoma attorney general’s office. The opinion referenced a U.S. Supreme Court decision that found unconstitutional residency requirements in the liquor industry.

The residency requirement, enacted in 2019, was not part of the 2018 ballot measure that legalized medical marijuana in the state.