Federal Appeals Court: Maine’s Cannabis Licensee Residency Requirement is Unconstitutional

On August 17, the First Circuit Court of Appeals affirmed the the holding of the US District Court for the District of Maine that the residency requirements of Maine’s Medical Use Marijuana Act violate the Dormant Commerce Clause (“DCC”). The First Circuit has added itself to the list of jurisdictions that have invalidated similar state cannabis laws on DCC grounds, including in the Sixth and Eighth circuits.

Northeast Patients Group (“Northeast”) and High Street Capital Partners (“High Street”) sued the Maine Department of Administrative and Financial Services in 2020. The complaint challenged Maine’s requirement that all owners of medical marijuana dispensaries must be residents of the state. The First Circuit’s decision effectively eliminates all residency requirements for becoming a cannabis licensee in the state.

The history here was interesting. In 2020, the state issued policy guidance  stating it would not enforce the residency requirement for cannabis licensees in the recreational marketplace. There, the state was advised by the Attorney General that the residency requirements for adult use cannabis licenses would not withstand DCC scrutiny. Northeast put that theory to the test.

Northeast owns and operates 3 medical marijuana dispensaries in Maine and is wholly owned by three Maine residents. High

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