A split First Circuit panel affirmed yesterday that the US Constitution’s dormant commerce clause applies to the federally illegal medical marijuana industry and that a Maine law mandating local ownership of cannabis businesses was struck down.
What does this mean?
Since Colorado became the first state to regulate medical cannabis, there has always been a desire from local advocates and state regulators to limit individuals permitted to own a marijuana license to those that are residents of such state. These atypical rules have caused numerous litigations contesting the validity of such rules, created a quagmire of work arounds by non-residents in an attempt to own businesses in such states (resulting in regulatory actions and litigation), and have hampered industry participants from participating in normal capital markets.
While most states have either gotten rid of or have stopped enforcing such rules (Missouri is an example), this ruling is still a solid legal win for the marijuana industry in affirming that such laws are unconstitutional.