Maine Wants To Keep Out-Of-State Cannabis Businesses Out

Maine Wants To Keep Out-Of-State Cannabis Businesses Out

For Maine residents, anyone not from there is “from away.” The state’s nickname, “Vacationland,” speaks to the massive influx of tourists that roam through the gorgeous New England region essentially all year-’round thanks to its four uniquely beautiful seasons; while they’re welcome to come through (respectfully), Mainers don’t want outsiders setting up camp in their territory. Never has this been more pronounced than with Maine’s attitude toward out-of-state cannabis business owners. When first legalized, state officials required all recreational and medical cannabis businesses “to be owned by residents.”

Last year, that requirement was challenged by the state’s largest medical cannabis dispensary chain when Delaware-based Wellness Connection faced pushback after seeking a recreational dispensary license for a new store in Portland – the popular coastal city that feels more like a large friendly town and is commonly mistaken as the capital of Maine (the real capital is Augusta).

After Portland council members passed an ordinance capping the number of licenses for adult-use dispensaries and giving preferential treatment to local applications, Wellness filed a lawsuit against the city.

Wellness Connection attorney Matt Warner says the measure is unconstitutional and that cities and states can’t discriminate against other citizens based solely on residency. More than one-fourth of the points awarded through Portland’s licensing system are based on residency. Warner argues that Wellness is “automatically disqualified for those points, based purely on our owner being from Delaware.”

The state eventually rescinded the recreational cannabis business requirements and later on, a federal court overturned the in-state residency requirement for medical marijuana dispensaries.

In that decision, U.S. District Court Judge Nancy Torresen wrote, “the notion that the medical marijuana industry in Maine is wholly intrastate does not square with reality.”

An appeal has been filed in the 1st U.S. Circuit Court of Appeals by the Maine Cannabis Coalition, a nonprofit industry group, and the state of Maine. Both are in favor of the residency requirement to come back. Maine officials don’t believe the Commerce Clause applies to Maine’s intrastate medical marijuana market, which has had multiple months of record-breaking cannabis sales. and the residency requirements do not burden interstate commerce as Congress has already eliminated them.

Wellness Connection’s position is that the residency requirement limits their opportunities “to create a brand, build a reputation and establish customer loyalty in Portland.” And, to do this at the recreational cannabis market’s inception would cause irrevocable harm in ways that cannot be rectified with a monetary damages award.

None of the courts (including circuit courts) that have previously faced this specific issue have rendered final judgments. 

“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,” Judge Torreson wrote in her decision.

The ruling in this new case could have ramifications that extend to other states. The overriding question is whether Maine’s residency rule restricts interstate commerce and violates the United States Constitution. Regardless of who is and isn’t allowed to join the Pine Tree state’s cannabis marketplaces, Maine residents are certainly enjoying the ability to purchase both medical and recreational marijuana in varying amounts along with plenty of smoking tools.

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