Federal judge hears arguments in Maine medical cannabis residency case

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The state’s largest cannabis company continues efforts to remove Maine marijuana residency requirements for sellers, now with a federal lawsuit against the state’s medical program.

And although the state agrees not to enforce the requirement in the recreational cannabis program, it is pushing back.

U.S. District Judge Nancy Torresen heard oral arguments on the case in U..S. Maine District Court On Friday, given the “elephant in the room,” a case she said was unusual for marijuana sales to violate federal law.

Maine Wellness Connection and its parent company High Street Capital Partners of Delaware sued the state in December to repeal a requirement that all medical marijuana dispensaries be owned by Mainers, making the same constitutional argument it made earlier this year in opening the state leisure market for foreign investors.

The state’s medical marijuana market can be a lucrative one, according to the lawsuit, which grossed more than $ 100 million in 2019. Medical marijuana became the state’s most valuable source of income in 2020, at over $ 260 million.

Plaintiffs contend that not just the residency requirement of the state devalue Wellness Connection by limiting the universe of potential investors in the company, but it also hurts all pharmacies in Maine.

“The obvious purpose of residency is to discriminate against non-residents like Plaintiff High Street, a potential overseas investor, and to exclude them from the economic opportunities available to medical marijuana dispensaries in Maine,” they argued. which restricts the flow of investment into the state and stifles the ability of pharmacies to operate within the program.

In addition, the law violates the so-called “dormant trade clause” of the US Constitution, which prohibits states from enacting laws that discriminate or excessively burden interstate trade “by expressly and deliberately targeting Maine residents,” the plaintiffs said Preferred for non-residents ”.

But state officials argue that the clause is irrelevant. The “ultimate test of whether state laws violate the dormant trade clause asks whether a state has done anything to restrict interstate trade more than where Congress left the market,” the Maine Attorney General wrote in court documents.

The clause does not apply to Maine’s domestic medical marijuana market, nor do the laws “place a heavier burden on interstate trade than Congress because Congress has completely eliminated that market,” they said.

The state also argued that it should be protected under Amendment 11, which prohibits citizens from bringing a state or state agency to court in federal courts unless the state has consented to a lawsuit or Congress has state immunity canceled before such.

The United Cannabis Coalition, a nonprofit trade group and intervener in the case, also wants the residency requirement to remain in place.

Coalition members, primarily medical marijuana providers known in the market as caregivers, claim they have a legal and economic interest in the law because if the residency requirement is lifted they risk economic damage from the law “A shift in market forces across Maine’s medical marijuana industry caused by spikes in funding or competition outside of the state. “

Torresen didn’t make a decision on Friday and there is no set schedule for it.

This is the third lawsuit in just over a year to argue that Maine’s marijuana laws discriminate against residents of other states.

As written, Maine law requires that every officer, director, and manager of an adult cannabis company – and most of its owners – live and file taxes in Maine for at least four years.

In March 2020, Wellness Connection’s sister company, NPG LLC, sued the state over the residence requirement in adult marijuana law – for the first time a marijuana company had challenged such a requirement.

The requirement would have given locals a head start when the adult market was launched in October, but Wellness Connection argued that it was unconstitutional. The company is controlled by the multinational Acreage Holdings, whose investors are based outside of Maine.

Maine Attorney General Aaron Frey agreed to the challenge, stating that the requirement “is subject to significant constitutional challenges” and would likely not stand up in court.

Accordingly, state officials announced in May this year that they would be relinquishing the state residency requirement in order to resolve the lawsuit.

State officials were unavailable Friday for comment on why they didn’t make the same concession on the medical program and instead opted to continue the litigation.

Using the same unconstitutional argument, NPG LLC sued the city of Portland over their ordinance giving Maine residents preference in granting retail marijuana licenses. In response to that The city council has decided to license all qualified first-round applicantseven though voters decided in November to completely remove the retail license ceiling.

Plaintiffs in Friday’s case said pharmacy residency is “cut from the same cloth” as adult marijuana law residency and worse than Portland Ordinance, as it bans non-residents altogether.

Local licensing preferences have been at the heart of Maine’s marijuana laws since the medical pharmacy system was created in 2011 and Recreational Marijuana was electoral approved in 2016 by Job Generator.

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